The development of the sector in recent years has been spectacular in terms of the number of companies. However, the sales volume has suffered a certain stagnation in recent years. Small occasional increases were followed by maintenance periods and even declines. However, it should be noted that “the situation in Spain is much better than in other European countries”, explains Luis Martínez, Executive Director of the Spanish Association of Neon Signs and Related Companies –ASERLUZ– (www.aserluz.org) . Regarding the type of services these companies offer, it would be necessary to analyze the evolution of the sector in each of the Spanish provinces.
THE INDUSTRY AT THE MOMENT
Depending on the concentration of companies in the individual areas, there was a tendency towards a Specialization in specific stages of the label manufacturing process, the more pronounced the larger the number of companies in this province. According to Luis Martínez, “But above all, we must highlight the improvement in the quality of production processes, especially in the companies represented in the association.” A large part of these companies have participated in various subsidies channeled through ASERLUZ to achieve ISO 9000 quality.
An example of this is that even the association itself has managed to do it.” The market is gradually consolidating. First, because the customer has a greater knowledge of the service he really wants, although in 80% of cases he takes advice from professionals. Secondly, because both public administrations and large companies are increasingly checking that the contracted signage companies meet certain quality and service conditions.
Here are some of the characteristics currently defining the sector:
importunity. “A large number of companies have grown, perhaps due to the few barriers to entry – any DIY enthusiast with the basic DIY tools can make a limited label – although many also fall and continue to change names,” explains Luis Martín, director of SPV Delegate (www.spvsa .com). The lack of barriers to entry, explains Martín, is one of the biggest threats a company faces in the industry. And it is that “any amateur gets to work and, given that today there is a great access to new design software, is able to create presentations that can amaze many customers, although what has been done later does not always correspond to what was previously designed”.
price war. As in all industries with a large number of companies, the price war is brutal. But that usually doesn’t come from reputable companies that have been established in the industry for years and work with undeniable quality, but from the others who engage in unfair competition by not complying with the minimum conditions for the execution of the work. According to Martín, “many companies start their activity by entering the price variation market. But that’s not the solution, because if you don’t consolidate in the medium term, you may lose more the higher your turnover.”
FUTURE OF THE INDUSTRY
“The signmaking sector is moving toward specialization. In the future, each company will be specialized in a production process and will have employees that will allow it to quickly offer its customers a good quality product. On the other hand, we have to be open to new opportunities from developing countries,” explains Martínez. According to Martín, “We have to try to find out which products and which customers we have good profitability with and specialize in this segment. It’s convenient to flee from the prototype of a company that makes everything at the price the market is asking.”