18 - 01 - 17

Identity’s 2017 Signage Industry Predictions

The cost of raw materials is back on the increase after Brexit and the falling pound. In fact, we are on track for a 10% increase in pricing from last year for sheet materials and some vinyl! So how will the signage industry survive? Quite simply the signage industry will pull through, although there is an expectation that the industry will continue to consolidate. Therefore, we may see the closure of some businesses that have weak processes or businesses that do not adjust its product and service offerings to meet market demands.

The industry has experienced far more turbulent times in the past. On this occasion, survival will not come from increasing your prices but by reducing costs and offering eco-friendly, cutting-edge and digital alternatives. The signage industry will continue to innovate and focus on emerging technologies, many of which will be explored in this article.

In this article, we will we review our 2016 predictions and explore seven more industry predictions for 2017, identifying the factors we think are most likely to have an impact on the signage industry.

3D Printing

Last year's prediction that 2016 would be the year of development for 3D printing was correct! A lot happened in this space in 2016, including the introduction of the first commercial 3D printer from HP.

HP, Nike and BMW teamed up to develop and bring to market the first commercial 3D printer. The printer is based on an open platform which means the materials and software are readily available. HP’s aim is simple - to reduce barriers to adoption and introduce new ways of working to the prototyping and manufacturing industry.

This was a major step forward for 3D printing and has meant that within a matter of months we have already started to see this machine on our high street with the emergence of 3D printing facilities. Not only is the technology now readily available (for a starting price of £80k) but this machine delivers superior quality, physical parts up to 10 times faster and at half the cost of current 3D print systems.

For the signage industry, 3D printers of all different shapes and sizes are starting to appear and form part of the signmaker's service offering. Printers are being used for a range of applications from 3D letters to door signs and are well-established in the marketplace. However, the cost of a 3D printer to produce larger signage products is still financially prohibitive. We predict that this will change in 2017 thanks to encouragement from companies like HP to innovate and use open platform technology to reduce costs.

Indoor vs Outdoor

The retail point of the sale market totalled 12.8bn square metres of print at a total cost of £40bn in 2014 and is growing by 0.8% year on year. In 2017, the battle will continue to unfold between outdoor and indoor signage. Indoor signage is growing at a yearly rate of 1.2%, whilst outdoor signage is decreasing by 0.4%.

This year, the demand for high-turnover graphics in retail environments will continue to encourage the industry to innovate and develop new technologies, whereas the outdoor technologies will see less investment in 2017.

We’ve identified that the reason for the shift of focus from outdoor to indoor is due to social media marketing. Shoppers are using social media to influence a shopping trip – the shops the consumer will visit are planned before setting foot in the shopping centre. This means that once a customer is in-store, all the retailer needs to do is encourage the consumer to purchase - increasing the importance of point of sale graphics. As a result, the general consensus in the retail industry is that outdoor signage no longer delivers the same return on investment.

In 2016, Identity saw demand increase for the following products – nothing new in this list from previous years, just plenty more!

  • Posters

  • Backlit displays

  • Temporary PoP displays—such as pop-up displays and shelf talkers

  • Semi-permanent PoP displays—such as pallet displays and corrugated floor units

  • Permanent PoP displays—such as durable permanent floor or counter displays

  • Corporate graphics, exhibition, and trade show materials

The indoor signage sector accounts for 72% of the markets spend compared to 28% for outdoor signage. The retail industry continues to require large quantities of printed signage, much of which have a very short lifespan. Therefore, the signage industry continues to be directly impacted by retail trends, with drivers including in-store displays, new product launches, new store openings, store closures, sale/price promotions and seasonal promotions. The driver which is missing in this list is e-commerce. E-commerce continues to compete with the high-street forcing retailers to put more resources into high-impact printed graphics.

2017 will see demand continue to increase in the indoor signage arena, but unfortunately a decrease in outdoor.

Digital Signage Branches Out – Advertising vs Information

Goodbye traditional billboard advertising, make way for digital signage! You will have noticed over the last 12 months that digital signage continues to be one of the fastest-growing industries. The focus in 2016 was on bus stop, billboard and washroom digital advertising which moved away from traditional posters and PVC printer graphics. In 2017, demand will continue to grow with an estimated total spend of £15bn. As predicted in 2016, retail and branding will continue to dominate the digital signage industry with advertising and internal communications closely behind.

Last year, Clear Channel’s ‘Storm Digital’ brand launched four new digital advertising billboard sites in London alone -boasting screen sizes of 4.8m x 7.2m. With increased demand and major brands continuing to seek new ways to be quick to market, expect to see many more of these sites appearing in 2017.

Image courtesy of stormdigital.com

In addition to digital signage for advertising, many sectors are now harnessing the same technology to develop the interaction with customer and clients. This means that there are now two forms of digital signage:

  • Advertising — primarily used in the retail and hospitality sectors

  • Information — primarily used in financial services, transportation, education and corporate settings

We are working with a variety of organisations to harness digital technology to facilitate brand interaction. This means that by understanding the user experience and the interactions we have with brands every day, digital signage offers yet another touch point to interact with consumers and build relationships. Digital signage is rapidly bridging the gap between physical and digital marketing, offering companies a cost-effective way to advertise. Digital signage captures 400% more views than traditional billboard advertising and so it is no surprise this industry is booming.

So, what developments are we likely to see in 2017 in digital signage? Bigger screens and more interaction.

With digital platforms being one of the most powerful options for display and advertising, firms are now looking at ways to display the biggest and brightest ads. Outdoor screen firm Amscreen amongst others is working to develop large-format digital signage.

Major brands will look to find more ways to interact with the consumer and engage, below is a recent example from a Renault campaign which used vehicle recognition technology to help Renault interact directly with drivers. The UK-based campaign identifies the make, model and colour of passing vehicles based on the license plate, and delivers relevant real-time messages on nearby digital signage. Anticipate many more of these in 2017…

Image courtesy of screenmediadaily.com

Digital Signage Branches Out - 4K is the New HD

4K has entered the market in a big way and if you haven’t seen it first-hand, it’s impressive. HD is now “old” technology whether we choose to accept it or not!

For major brands in industries such as fashion, luxury goods, jewellery, auto and sportswear the presentation of their products is key. The better the quality of the presentation, the more likely brands are to adopt the technology to sell its products. 4K has unleashed advantages for these industries encouraging brands to increase spend in its brand communications.

That said, there is a significant price gap between HD and 4K. Therefore there are only some instances where the customer will truly benefit from the 4K experience. This is usually guided by the distance the user is from the screen and the size of the screen.

Back in 201, HD was expected to and became the norm. We predict that 4K will go the same way – once 4K starts to reduce in cost and is more widely used in the home, consumer’s expectations will only increase. It will probably be nearer to 2018 when 4K is mainstream but look for this technology more in 2017.

More Lighting Technologies – OLEDs

As explained in our 2016 predictions, the signage industry has benefitted from light sheet technology – this second generation of LED technology increased the brightness of signs with zero impact to energy consumption, and in some cases with fewer LEDs. The light sheet now dominates the industry and is slowly but surely replacing traditional LED tracks.

So what next in this field? Flexible screens. OLED (organic light emitting diode) displays are as thin as 1mm thick and designed to be flexible. In 2016, LG launched a double-sided OLED screen which is set to replace the retail poster as we know it. OLEDs enable brands to benefit from dynamic signage placement in the high street.

Again, OLEDs come with a price tag so we don’t expect this technology to be widely adopted in 2017 but you can certainly expect to see it appearing when the budget allow.

Image courtesy of LG.

Here is the technology in action: https://youtu.be/l3eK1yZeABg

Dye-sublimation Continues to Grow

The dye-sublimation print market is set to double in the next five years according to the latest exclusive market data from Smithers Pira. This printing method continues to dominate the signage and printing markets, having the biggest impact in signage and garment printing for a generation. Dye-sublimation printing is a large format printing method used to print display graphics onto textiles and fabrics, usually polyester, which is used in tension fabric frames and fabric face light boxes.

To provide some context, this is different to traditional printing processes – the process sublimates the dye at temperature into a gas that penetrates and permanently bonds inside the fibres of the textile. The result is a vivid, high impact, permanent finish.

Dye-sublimation or “dye-sub” is a cost-effective method for producing large seamless graphics for event and retail environments. The method provides a high quality, lightweight print which can be folded and reused without any cracking or creasing. This enables retail store staff and stand builders to install a graphic that would have previously been installed by sign-fitters. And what’s more the print looks incredible when back-lit.

In the year ahead, we expect to see more and more dye-sublimation printing of fabrics in the events industry and further R&D to consider adapting the technology to be used for a wider selection of materials.

Time for Green

The UK and 194 other nations have reached a deal in an attempt to cut greenhouse emissions to a level that will stop the average global temperature rising. This historic United Nations agreement will undoubtedly have an impact on the signage industry. Major brands are already starting to voice concerns about the impact that some signage solutions are having on the world and so it is our job to present our clients with greener alternatives. This is a challenge in the signage industry and in terms of progress we have a long way to go.

The two main contributors to greenhouse gases are PVC materials and solvent based printing. The PVC lifecycle in terms of raw materials, colouring agents and other treatment is very difficult to manage and reducing the impact on our environment is a challenge. Adding to this, we print using solvent based printers to produce our finished graphic which puts chemicals straight into the air.

Although slow, there has been some development in the last few years which can be split into three areas;

  • We are manufacturing signs that are sustainable – they are built to last longer than ever before. Advanced printing technologies enable signage manufacturers to offer longer guarantees and protection against UV.

  • Investment continues to increase in LEDs with manufacturers seeking new ways to increase brightness and reduce energy consumption.

  • Latex printing led by HP has become more mainstream reducing the reliance on older solvent-based printing.

Latex printing is water based, and so is far less reliance on harmful chemicals. Again, the research and development in this area are driven by HP who are continuing to introduce cost-effective latex based printing systems at an affordable cost. HP offers a recycling scheme for everything involved in its print process from the waste ink through to the components of the printer itself!

Finally, the sign industry is starting to develop a rich variety of environmentally-friendly vinyl films providing sign-makers with the ability to offer client’s a greener alternative.

The next step and a big focus for 2017 will be to embrace the green alternatives as a standard product offering. We hope to see far more signage manufacturers using eco-friendly products and waving goodbye to traditional PVC based products which have dominated the industry for decades. As more and more products come to market, the price will be driven down and equal that of PVC.

Summary

In summary, the signage industry is an exciting place to be. Research and development spend are at its peak and the technologies that are starting to become mainstream are set to transform the industry. Trends that we see in our everyday lives – green alternatives, sustainability, digital, retail competition, social and increased audience interaction – continue to dominate the marketplace. Some of the predictions above will not come to fruition until 2019/20, however, there will be some big advances in 2017.

Identity would like to take this opportunity to wish everyone a happy new year and a successful start for 2017. Watch this space for future posts, exploring the topics mentioned above in greater detail and tracking the industry’s progress.