The print industry is shifting and changing, as digital media continues to disrupt the space. Many shops have decided to meet this challenge by expanding their service offering… but that can be a difficult prospect if you don’t have the expertise on your team to grow into new services.
The answer for some shops has been to bite the bullet and hire in new talent. For others (and for bigger groups like associations), mergers and acquisitions have been the answer. Let’s explore a few of the issues surrounding the increasing consolidation of the print industry.
While dire announcements about the death of the print industry have proven to be greatly exaggerated, the fact remains that increased demand for digital media has had a profound effect on the industry. Printing and mailing services have had to become more – whether they call themselves marketing service providers or something else.
These shops have had to shore up their revenue streams by adding digital and/or marketing services to their mix – and for many, that has meant merging with or acquiring competitors that had those capabilities in their toolboxes.
Established Customer Relationships
According to 2015 data by WhatTheyThink?, 17% of the largest companies in the industry had bought a book of business, and 6% had merged with another company.
One big reason mergers look so attractive to these companies is that they can get access to a larger base of customers – and, using those already established relationships, they can more quickly move customers to higher levels of the sales cycle. This creates a more efficient sales process, since they’re not starting those buyer journeys from the very beginning.
Adding New Capabilities
These acquisitions can also mean pulling in a smaller shop that happens to have skills in a new part of the market – such as marketing or a specialized niche. These partnerships are attractive, since they cut down on extra staffing requirements and training needed to enter a new vertical.
These added services can mean more than just printing and marketing. The rise of cloud services has opened a new opportunity for companies that want to become a one-stop shop for integrated service mixes. For example, some shops have moved into the SaaS space – or, they acquire a cloud and data security firm to go along with print services.
Whatever their reasoning, more companies are looking at mergers and acquisitions to gain new service offerings and market areas to increase revenue and mitigate rising costs. As the face of the industry continues to transform, the consolidation trend doesn’t look to slow down any time soon.