Watching and Waiting

As this issue goes to press, we are crunching the numbers from our Fall 2020 Business Outlook Survey for our Printing Outlook 2021 report, which should be available in our eStore by the time you read this. Some of the business conditions data is depressing, but then we were expecting it. Instead, it’s the lack of proactive thinking and the sense of hunkering down elsewhere in the survey that are a little dispiriting. 

There is no doubt that last year saw unprecedented carnage—71% of 279 print businesses surveyed said that 2020 revenues had decreased compared to 2019. No surprises there. But 28% said that revenues had decreased more than 25%, and another 27% said revenues had decreased between 10% and 25%. (For the past 15 years—or 25 years if you count the original TrendWatch surveys that WhatTheyThink’s questionnaires were based on—“decreased by more than 10%” was the most dire survey option, and even during the Great Recession it was never selected by as much as one-fourth of respondents.) Eleven percent of respondents said business stayed about the same, while only 19% said that revenues had increased over 2019. 

Of more importance, though, is how the industry feels about 2021. Gotta hand it to print businesses, they are an optimistic bunch: 78% are expecting revenues to increase compared to 2020, which shouldn’t be hard, given the hole everyone fell into—unless of course those external conditions everyone is expecting to improve don’t. Eleven percent expect revenues to increase by more than 25%, and 40% expect revenues to increase by more than 10%. 

The top three business challenges reflect the most pressing concerns: “regaining business lost due to COVID” (64%), “keeping my employees safe from COVID” (46%), and “national economic conditions” (38%). Top business opportunities are “passive” opportunities—they depend on waiting for external conditions to change and not taking proactive steps: “improving economic conditions” (60%), “national recovery from COVID-19” (57%), and “customers outsourcing more work to us” (37%). It’s disheartening to see things like “producing post-COVID print materials (such as PPE, distancing signage, divisional graphics)” only selected by 13%, since these items were what kept a lot of print businesses afloat during the worst of 2020. 

Planned investments are a case of same-old same-old: “we have no planned investments” (28%), “finishing/bindery equipment for digital production” (23%), and “workflow automation software” (14%). One-half of our respondents have hiring plans for 2021, most of them for outside sales reps (43%) and postpress/bindery employees (34%). 

We get the sense from this survey that a lot of print businesses are hunkering down, waiting for the virus to go away or a vaccine to become widely available (which hopefully is happening by the time you read this; here in the past, it’s still taking quite a while to roll it out), and for their traditional markets (travel, hospitality, events, etc.) to return. But throughout 2020, we found that the print businesses that prospered—the 19% that said that revenues had increased over 2019—were proactive in seeking out new opportunities and teaching themselves how to produce the products that were in demand throughout the early days of the pandemic, whether that be PPE, safety signage, masks or other materials. As we enter 2021, the in-demand product mix is going to continue to evolve, and businesses will need to stay on top of it. 

In some sense, what we’ve been seeing is reminiscent of the sequence in the 1960 movie "The Time Machine," where George, the protagonist, is in his time machine hurtling into the future and outside he sees the fashions in the window of the department store across the street change from year to year, decade to decade, in a matter of seconds. Likewise, we have been seeing a hyper-accelerated version of what always happens in markets in general: vertical markets change, some older products decline in demand and newer products increase in demand. Evolving technologies or a changing culture are what usually drive these changes, not a pandemic, and they tend to take place over several years at least and not, you know, in a week. But that is changing, at least for now. In this and the past few issues, Preston Herrin has been writing about “agility,” and while agility was something print businesses always needed, it’s needed even more now. “Sheltering in place” is a good policy when it comes to public health and the pandemic, but not when it comes to evolving one’s business or keeping it afloat during a pandemic—or keeping from being eaten by the Morlocks.