The Photizo Report
Retail: Print Output Fills the Cart
- By Rob Sethre
- Aug 01, 2012
One of the great opportunities for print vendors is identifying and addressing vertical markets. A back-office printer that produces standard reports and correspondence is, in most cases, viewed as a necessary evil to be targeted for reduction or elimination. The same printer tightly integrated into a client’s business, however, is an asset. This is especially true if the business relies on visual elements to attract customers, encourage incremental purchases and steer traffic to high-margin items.
The retail sector is an excellent example of an environment in which a printer can be integrated into a business and can actually enhance profitability when deployed actively and creatively. Whether grocery stores or other chains, the task of these businesses is to manage their product supply chain, recognize and take advantage of short-term opportunities, and optimize pricing to deliver positive margins in a highly competitive market. Promotions are significant, since retail products are mostly commoditized and are available in many stores. Also, retail customers are mobile and often fickle, following promotions and special offers with their cash.
Classic retail structures offer a number of opportunities to improve business results if resources are properly leveraged. Typically, logistics centers deliver thousands of products to dozens or even hundreds of stores. In the historical (and more static) scenario of retail price and product management, the central office determines prices and promotions for all branches for a given period, and the appropriate printed materials are prepared and delivered together with the actual items. This approach may be cost-efficient in the sense of production and delivery, but the inability for a local branch to be proactive and creative is severely limiting.
In the opposite, or “activist,” scenario, local branches are empowered to create their own special offers, enjoying a level of freedom to manage the business across a broad line of products by allowing for the adjustment of pricing and promotional activities. In addition, it may be necessary to react to specific local events; the special offer that just appeared in Ohio will not be known to the headquarters on the East Coast. Also, locally preferred products can be offered at a discount (or a premium) in order to ensure that they are sold off in a timely and profitable fashion.
If suppliers understand data structures and data flows, they understand your business. This is especially true for retail business structures with very specific product and logistics requirements. The entire product line, which may include thousands or even tens of thousands of items, is loaded into a central article database, and that article information is also tagged with cost/price calculations, bar code references, product images, and even packaging sizes and weights. All of this information will be applied to create stocking diagrams, delivery configurations, placement proposals and pricing decisions. This is the benefit of retail business management; these thousands of moving parts — including product selection, pricing, shelf placement and promotions — can be manipulated in order to eke out a small margin consistently. With the exception of online shopping, this is the nature of all retail business. The experience is local and in person, and the opportunity to influence these purchasing decisions comes down to information and promotions delivered directly to the customer in the form of hard-copy print output.
The final visual expression of these planning processes is a variety of specific printed items: planning diagrams, shelf-edge labels, item tags, hanging and freestanding signage, coupons, promotions, flyers and loyalty cards. While there are some trends toward electronic signage, most of the information is still provided in printed form. The hard-copy output is not a necessary evil; it is actually a tool for driving business and increasing profitability.
Media and consumables
The retail environment requires a variety of media types for the wide range of products and display possibilities that it offers. The products themselves vary widely and include everything from freezer items to nursery items, fresh produce and more — each with its own tagging and labeling requirements. Historically, one of the advantages of centralized production has been the ability to deliver all these special materials, such as precut tags, heavy posters, vinyl and plastic labels, and more.
The robust capabilities of today’s printers, combined with growing partnerships with media providers, provide an opportunity to deliver the same materials through local production. The materials need to be matched carefully, as a melted label or excessive adhesive leaking into a mechanism will ruin a printer beyond repair. But coordinated development and testing permit long-term device use while supporting a wide range of materials. This allows media providers to get creative. Preprinted, precut, prescored and preperforated materials can all be leveraged widely across the entire network of outlets. The central office is no longer providing finished products, pricing decisions and the accompanying promotional materials; it is enabling local branch managers to improve business flexibly and creativity.
Now that the speed and capabilities of color printers have improved, color will play an increasingly important role in the retail signage and promotions market. The statistics showing the increased attractiveness of, attention to and retention of color print materials are well known in the retail community, and the capabilities for local production of color materials will continue to grow as well. Of course, those devices, consumables and media also need to be optimized carefully, since the same range of materials will need to be supported with excellent and consistent color print quality.
While it is definitely a niche segment, one further opportunity is the utilization of color toner in monochrome printers. The idea is to replace the black toner cartridge with a cartridge that contains a different color of toner — blue, green, red or whatever color suits the client’s needs. The advantage is that the retailer can use a modestly priced monochrome printer to produce attractive and attention-grabbing promotional material, possibly even matching a corporate logo color. Even white toner has its place. Printing white on heavy black paper creates an effect similar to chalk on a blackboard, which simulates a “marketplace” feel for produce and special displays.
The future of printing as well as related consumables and services businesses depends on the active and intelligent application of technology in specific client situations. Some segments, such as retail, are still dependent on hard-copy output and are highly receptive to the use of local printing equipment and specialized media/consumables. Their business structures and workflows require quick action in the form of price adjustments and promotions that communicate clearly and attractively in a tangible format. In contrast to viewing a printer as a “necessary evil,” this retail environment can profit directly from the activation of the opportunities offered in modern printer products.
This article originally appeared in the August 2012 issue of Recharger.
Rob Sethre, senior consultant at Photizo Group, is a veteran of the printing and imaging industry with more than 20 years of experience with leading companies in the sector, such as Konica Minolta, Lexmark, Kyocera Mita and Lanier. He has held key executive positions within these companies, and his experience includes a broad range of geographies, product groups and functional responsibilities. Before joining Photizo as a senior consultant, Sethre was director of printer marketing at Konica Minolta.