The Path to Survival

It was late 2011, and the United States Postal Service (USPS) was in trouble. Operating costs were rising almost as rapidly as mail volume was declining, and the organization was hemorrhaging money. So, in a bid to stay relevant and stave off impending bankruptcy, the USPS ran a TV commercial:

A refrigerator has never been hacked. An online virus has never attacked a corkboard. Give your customers the added feeling of security a printed statement or receipt provides—with mail. […]

The USPS had survived 236 years of snow, rain and gloom of night—but in technology it had met its match.

It's the same struggle faced by the continuous and multipart forms industry. "This market continues to be contracted by technology both on the single and multipart side," said Tim Urness, vice president of Royal Business Forms & Printing, Brooklyn Park, Minn. "The orders that are left are oftentimes repeated with less parts than the previous run, which also erodes the overall market."

That kind of erosion—the market has shrunk 10 percent each year on average since the peak in 1997, said Urness—has taken its toll on the forms business. And while much of it is directly related to the rise of the laser printer and the shift to digital alternatives, technology has only been part of the problem.

According to Jeff Russell, president of Major Business Systems, Inc., Hillsborough, N.C., the technological revolution and the recessed economy have contributed to overcapacity in the forms market. "The resulting net effect is depressed pricing versus rising cost, creating extreme demands on manufacturers to create cost efficiencies internally," he explained.

Even in the markets where forms have remained strong, recent developments have threatened to hinder sales. Russell pointed to government legislation and funding aimed at accelerating the conversion to electronic forms, noting its impact on the healthcare and manufacturing markets in particular. "Traditionally, manufacturing industries have been significant users of multipart products," he said. "[But] unless there is a change in the government's position toward business, this market faces continual decline as well."

Nevertheless, some markets remain viable for forms sales. Rita Fry, marketing and sales coordinator for Phoenix Data, Inc., Montgomery, Pa., listed trucking companies, auto parts stores, banks and food service companies, among others. Russell, meanwhile, mentioned a somewhat surprising source of sales. "Oddly enough, where government seems to be putting severe pressure on the consumption of multipart products in the commercial arena, they continue to be a large consumer of [multipart forms], many of which are some of the most archaic form," he explained.

"We also seem to have experienced a stabilization of the decline in the unit set market," he added. "It appears that in the areas of distribution, service and enforcement, technological impact has reached its potential."

That might seem like a Pyrrhic victory for the forms industry, but it's a step in the right direction. And while forms will never regain the market share they've lost to technological alternatives, they've averted extinction—for now. At the very least, forms still fill a valuable niche, mainly because they can do some things their technological competitors cannot. "Simply put, technology has not found too many ways to replace adhesive," Russell said.

Russell is referring to form/label combinations, a market that, by his account, is still going strong. "By having a fully integrated facility producing the label product as well as the forms under one roof, we have been able to provide very cost-effective products which create numerous internal efficiencies for users in the healthcare, distribution and manufacturing markets," he explained. "Having the ability to variable image and barcode also creates a niche that is still viable in this market."

Fry mentioned integrated labels, variable imaging and barcoding, as well, but she also listed other value-add options such as QR codes, four-color process printing and, perhaps most importantly, security. "When businesses use continuous or multipart forms over digital or electronic, they have a hard copy of the form with no chance of changes in distribution to other departments," she stated.

And then there's the issue of cost. Urness acknowledged that, while "limited new software and hardware options" are available for forms, in many cases, existing machines can provide increased efficiency and reduced cost compared to laser printers or digital alternatives. "The materials are as reliable as ever and many of the plants still producing these products have found ways to drive cost out of the manufacturing process," he said.

Still, Urness stressed the need for forms providers to diversify. "Even though the continuous and multipart market continues to decline, we have found ways to replace this type of work with other products and services," he commented. "Forms remain the core of our business, but diversification and adaptation have provided growth for us."

Russell offered similar advice. "By providing layered products that create value for internal users, multipart manufacturers can still find opportunity. However, it is more of a system sale than an order sale," he said.

"Finding the most resourceful channels of distribution is the key. There is plenty of cost evidence that multipart products still offer an effective method of business transactions. The key is to sell that evidence and overcome the enhanced marketing strategies of the technology resellers," Russell continued. "In today's marketplace, everyone is open to hear how you can reduce their cost."