Big Picture - June/July 2020 - 24

THE ECONOMICS OF WIDE FORMAT
AND HOW THEY ARE CHANGING
The wide-format market has been undergoing significant change
in recent years, and now, with the impact of the COVID-19 pandemic, it's changing again. Many of the trends we noticed before
lockdown are still going strong, but at the same time, there are
new market behaviors emerging. For a printer to survive and
thrive in these trying times, they need to adapt.
But before they can adapt their understanding of the economics of wide format, they need a basis from which to grow.

BIG PICTURE

June/July 2020

by Dan Johansen

THE BASICS
In most of the print world - and many other industries - pricing
is traditionally calculated "cost up." A business adds up all the
costs involved, from ink and media to labor and supplies, to calculate the fully burdened cost. This metric gives a clear picture
of the actual investment that goes into producing an application.
Typically, a printer takes this number and adds a reasonable
markup, and that's their price.
For example, a direct-to-substrate UV printer printing to
quarter-inch acrylic would require about $2.80 per square
foot for ink and media. That goes up to $4.98 fully burdened,
depending on your unique circumstances. From there, a 50
percent markup would set the going rate at $7.47 per square
foot. Nothing to sneeze at - but also not nearly what the piece is
worth. That kind of application can sell at $16 per square foot in
a typical market. But why $16?

Because that's what the market will bear. Pricing wide format
in a way that's fair to both your customers and your bottom line
requires paying attention to competitors' pricing on similar applications, in your region and nationally. Consider collaborating with
a third-party consultant who has a broader view of pricing across
the industry and can help you target the best applications - and
pricing - for your circumstances.
WHAT'S CHANGED?
A lot! But more narrowly, the economic impacts of COVID-19 are
hitting marketing budgets hard, which means brands are looking
to get stronger ROI on any marketing spend. That's an opportunity tailor-made for attention-grabbing wide format. On top of that,
the demand for signage and wide format has skyrocketed since
public safety lockdowns began, and they are likely to stay high for
the foreseeable future as organizations look to keep people safe.
There is a significant, long-term need for low-contact sharing
of new and crucial information. This includes instructive P-O-P displays for self-checkout and wayfinding graphics for reconfigured
environments designed to lessen crowd density, among other necessities for our new normal. The way we travel is likely to change,
with a need for signage showing passengers how to safely get to
their gate or platform, how to queue up, what to do with their bags,
and so on. College campuses may stagger student schedules, and
print can provide helpful reminders of the policy. Many stores have
implemented one-way aisles to maintain spacing, with temporary
measures like duct-tape arrows that will need to be replaced with
longer-term solutions, such as floor graphics.
For example, consider a two-by-two-foot-round social
distancing floor graphic. You see these selling for $57, or
$14.25 per square foot. At most, that graphic costs the average
wide-format printer $2.50 per square foot to make. But people
are paying a premium, because the demand is there. Consider
what applications are integral to the new normal that your shop
is best suited to produce, and start pivoting!
Wondering where best to focus your efforts? Consider
consulting with Ricoh's experts, who closely monitor emerging
trends and have experience assessing print providers' strengths
and providing game-changing insights.

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Big Picture - June/July 2020

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