future focus london calling seminar

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Neopost Confidential Information

FUTURE FOCUSUK PRINT – TODAY & TOMORROW


AGENDA

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INTRODUCTION

“Why?”

FINDINGS

“What?”

DISCUSSION

“How?”

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Why?

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SPEED OF CHANGE...

0 10 20 30 40 50 60 70 806


75 Years

38 Years

13 Years

3.5 Years

35 Days

Time to reach 50m users

WHAT HAS BROUGHT US HERE?

The most contemporary study into UK print

A changing communications landscape

Evolving customer needs Challenge of alternative media Print’s future direction Understanding the challenges Ideas Looking to the way forward

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UK PRINTING

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UK PRINTING BY NUMBERS

£14.1 Bn. Turnover

130,000 Employees

10,000 Companies#5 in World Printing

A SIGNIFICANT INDUSTRY

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Source: PIRA International data estimates

INDUSTRY TRENDS

The industry has faced many challenges over an extended period

The number of companies has fallen

13% since 2009 Turnover has also fallen

but less so at 10% Demand is there but

consolidating Preferences are changing

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Source: Future Focus Report

SHAPE OF THE INDUSTRY Print sector revenues can

be diverse The sector illustrates a

widening services portfolio

Ink on paper represents

56% of revenues Traditional sheet-fed litho

now stands at 51% of print revenues

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% PRINT SHARE OF ECONOMY

20052006

20072008

20092010

20112012

20132014

20152016

20172018

2019

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

0.45

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Source: IBIS World

ASSESSMENT

Printing is a highly competitive environment Supply exceeds demand Competition from other media is increasing Core ink on paper is challenging Print’s share of economy is declining

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We just need to think differently...

THE FUTURE OF PRINT

Not a standalone medium Part of the overall communications mix Compliments other channels A trusted medium Services vs. manufacturing Helping reach customers Matching customer preferences

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What?

FUTURE FOCUS...

Commissioned by Neopost Conducted by the BPIF Survey carried out March 2014 Findings initially released at

IPEX Copies available today Challenges & direction Thoughts of the industry

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PRINTING OUTLOOK UK print remains a

significant industry Print and related sectors is

the 5th largest UK industry A significant employer Net contributor to UK

economy Declining numbers

55% Respondents had a positive outlook

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CHALLENGES

Mixed opinions on growth Clear picture on key industry

challenges− Overcapacity− Other media− Technology

Additional clear messages on challenges for winning new customers

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CHALLENGES

A number of key challenges identified

Alongside the 3 leaders we have:

− Competition− Material & energy costs− Pre-packs− UK economy

No environmental negatives

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CUSTOMER RETENTION & ACQUISITION

Printers clearly have insight into customer challenges

Significant commonality in challenges for retention and acquisition

Key challenges:− Competition− Alternative media− Pricing− Creating value

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AREAS FOR GROWTH

An overall prediction of growth

Technology and customer demands instigate change

Industry views a significant migration to digital printing

Some clear areas of growth:− Multi-channel− Inkjet printing systems

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MULTICHANNEL COMMUNICATIONS

Print is clearly seeing a change in demand

Digital media is changing the landscape

Customer needs are changing

Print run lengths reducing

Personalisation and variable data are key drivers

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EFFECTS OF MULTI-CHANNEL A number of key effects

of growth in multichannel

5 key areas:− Changing demand− Reduced print runs− Declining print budgets− Revenue loss− Falling retention

BUT 58% see falling run lengths as a positive

New opportunities

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INVESTMENT

Investment decisions are a key component of technological change

73% Plan to maintain or increase levels of investment

4 Key areas for investment:− Variable data presses− Web2Print− Mailing & Fulfilment− Database management

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INVESTMENT PROFILE

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Source: Future Focus Report/BPIF Investment Surveys

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How?

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DIVERSIFICATION

DIVERSIFICATION

Change is inevitable UK business as a whole faces new challenges Print is no exception Customer demands are changing Providers need to change accordingly Diversification decisions face all businesses Diversification can create increased value

propositions and associated opportunities

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DIVERSIFICATION

Print is aware of the diversification agenda

Customers are instigating change

66% are looking for new services

72% Companies are investigating diversification

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WHAT DOES DIVERSIFICATION LOOK LIKE?

Nearly 70% are actively engaged in moving to diversified opportunities

Diversification takes many forms

Key areas identified:− Multichannel− Multi-format production− Mailing & fulfilment− Creative design− Data services

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MAILING & FULFILMENT

Mailing & fulfilment is one of the key areas of change

15bn mail items sent each year

DM is seeing a return

50% Respondents feel they need more knowledge

51% Not involved in mailing or fulfilment

15% Actively investigating

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THE OUTCOME...

The industry’s future is yet to be defined

Traditional print is likely to continue its decline

Customers have changing needs

In meeting these needs printers can flourish

Diversification is key

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SUMMARY The industry has some clear ideas on it’s future Business landscapes are changing Organisations will always need to communicate They will need partners to help them Print cannot survive as a standalone medium Printers have great opportunities in new services Not all printers will change Your customers may have fixed perceptions Changing that perception is key

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FUTURE FOCUS

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www.neopost.co.uk/futurefocus

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future focus london calling seminar

Business

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asignificant industry

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faces new challenges

acquisition key challenges

print share of economy0

key areas