Digital Imaging Reporter’s 2022 Dealer of the Year: Colonial Photo & Hobby

Three generations have successfully maintained an exemplary ambiance and shopping experience for more than 68 years.

Orlando, Florida, is known for make-believe tourist attractions. However, “authentic” is the one word that describes the town’s only surviving full-service camera store: Colonial Photo & Hobby. When Don Rausch opened it in July 1954, there were six other camera stores.

Digital Imaging Reporter is proud to salute the second and third generations of Colonial Photo & Hobby for their success in maintaining an exemplary ambiance and shopping experience for more than 68 years.

Today, grandson Jacob Rausch, son of Steve Rausch, is assuming more operational details as his dad and his uncle, Mike Rausch, step back.

Readers who expect to see a new shiny store with the latest in technologies won’t find it at Colonial. However, technology is running the store’s back end. Colonial took over a 10,000-square-foot Publix supermarket in 1973. Twice expanded, today the store spreads over 15,000 square feet.

Family Affair at Colonial Photo & Hobby

None of Don Rausch’s five children thought they would go into the family business. Steve majored in chemistry. When he was young, he worked at Publix, where his income was twice what he earned at Colonial. Steve paid attention to the Publix managers.

They had daily team meetings discussing things of importance, like the price of eggs at every other store in town. Steve watched successful managers feeling every refrigerated case as they walked by, monitoring even basic details.

Steve, who enjoyed the hobby industry, eventually found his way back to Colonial. He has also served on the board of the National Retail Hobby Store Association.

His brother Mike was a microbiology major. Mike loved the camera side of the business. He brought Colonial into the PRO buying group. He eventually served on PRO’s board of directors and as an avid ambassador for the organization. Mike will tell everyone the store couldn’t survive if it weren’t for PRO. He and his wife, Teresa, were constant fixtures at PRO conventions and other industry events.

About six years ago, Mike gave one of his kidneys to Teresa. He expected to phase out of daily involvement with Colonial and travel with her. Teresa passed earlier this year. Now Mike is very active in the business, spending more time on the floor, engaging with customers, other retailers and vendors.

Jacob Rausch is now taking more responsibility for ordering and hiring. It’s assumed he will eventually own and operate Colonial. Jacob is currently doing a skills assessment, determining the areas in which he might need more training or education.

Pragmatic and Profitable

Moreover, the Rausch family’s unofficial motto is “Pragmatic and Profitable.” When the hobby side of the store has out-of-date train picture calendars, they’re disassembled and packed in a poly sleeve with a cardboard backing. Sometimes, they’re sold, used as giveaways or added to sweeten a big sale.

At the last PRO show, Jacob saw store pins by Pitman Photo Supply in Miami. Colonial now has lapel pins of their iconic neon sign and clock for employees and occasionally customers. He’s also investigating the potential for selling other pins, possibly cooperating with other retailers to reduce production costs.

Further, there’s an overriding atmosphere of “no high pressure” among the sales team. They only give customers the information they need to make decisions.

However, sometimes a little good-natured nudging helps. Steve tells about a customer looking at a telephoto lens. Steve said, “You probably deserve that lens.” The customer responded, “You’re right. Today’s my birthday. I’ll take it.”

What’s more, Colonial doesn’t let vendors pay direct employee spiffs, due to conflicts with Florida tax rules. Instead, they work with astute vendors to use the funding in more productive areas to grow the vendor’s market.

Customers First

Orlando is part of Orange County, where one-half of all sales tax revenue comes from out-of-towners. Colonial receives a fair number of tourists. The common comment is: “I didn’t know camera stores like this still existed.”

When Mike hears that, he goes to the PRO retailer directory and tells them about camera stores close to where they live. This is just one example of how Colonial goes beyond the “immediate transaction” with tourists.

In another example, a customer was wandering in the darkroom aisle. A salesperson asked if he knew how to determine if his fixer was still good. The man said he didn’t. He had developed film in school and was ready to resume his hobby.

The salesperson said, “Cut off the start of the 35mm film, where there are no images. Hold one end in your fingers and swish it in the fixer in daylight. The swishing mimics agitation. Watch until it becomes totally clear. If the fixer is fresh, it’ll take 45–60 seconds. Fix your film for twice the time it takes that strip to be clear. If it starts taking 4–5 minutes, you’d better get fresh fixer.”

The customer had set aside multiple brown plastic gallon bottles to buy. The salesperson asked if he had smaller whiskey bottles with tight necks. “Store the developer in these smaller bottles in a dark cabinet; it’ll keep the developer fresher than a half-full brown bottle.” Amazed the salesperson had offered a cheaper idea, the customer returned some of the gallon bottles to the shelf. This happens daily at Colonial.

Working at Becoming a Destination Store

Jacob believes Colonial should be a destination store. “We must have good service, solid product availability and do what big boxes or online stores can’t or won’t do. Our customer loyalty is telling us we are doing that.”

To keep the staff up to standards, the Rausch family stays in contact with former employees. “We let them know when we’re looking for employees. They may not be ready to come back, but they may know someone who is.”

There’s a benefit to getting referrals from existing and past employees. They know the reality of the work. So, they will prescreen applicants as well as ensure the applicant has realistic expectations.

Pragmatism rules supreme at Colonial. When GoPro was hot, Jacob realized employees of a certain big-box store were calling for accessories. Consequently, he doubled down on stocking GoPro accessories and offered a discount to the big-box employees.

Not only did they shop with Colonial, but they also sent over tourists and others looking for GoPro accessories.

However, when GoPro changed their distribution model, eliminating camera stores, Colonial didn’t fight it. They moved on to the next new thing.

The Retail Culture

At Colonial, the management team has strong feelings about how the store’s culture should augment the customer experience.

Mike Rausch is adamant that the phones are answered promptly and by a real human. Customers can dial a department directly. If the call isn’t answered in three rings, it then rings in every department. And that includes Mike’s office, accounting, etc. Moreover, each of the 24 employees is charged with answering the phone whenever it rings.

Steve also believes retailing experts who say customers are more likely to deeply consider and eventually buy a product in their hands. He’s starting a new policy that pricing cannot be on the front of pegboard items. Price tags stuck on the front of packaging reduces the product’s visual impact. A price on the back encourages customers to pick up the product, increasing the purchase likelihood.

In addition, Mike instructs salespeople not to ask yes/no questions. His favorite is: “What do you want to play with today?” It fits both camera and hobby departments. It also causes the customer to pause and reflect on the “play” aspect of the question before providing a focused answer to the salesperson.

The Hobby Side

The initial reason for selling both photo and hobby was the ability to shift product categories as situations change. The Rausch family isn’t worried about their future—only the uncertainty of what products the next 68 years will bring.

In the hobby section, Gundam models are new and heavily demanded by collectors. Colonial stocks huge quantities of this line’s various models.

The department manager works with a Discord group, Central Florida Gunpla Builders. When a shipment arrives, a post alerts the community with a picture of the pile of the unloaded merchandise.

This pile remains for two days until members of the group can pick through new items. What’s left is put into regular stock. The independent group feels special and spreads the word about Colonial’s inventory. A recent post brought in three different customers within 60 minutes. Each left with products from the shipment.

What’s more, drones seemed like a natural product for Colonial. They have sold remote control “toys” with wheels and/or wings for decades. Drones weren’t the same; they required more customer training. As the category matured, manufacturer support dwindled, as did margins. With lower margins, it’s difficult to sell drones and provide superior customer service. Today, Colonial stocks drones but doesn’t aggressively promote them.

Additionally, when Steve took over the hobby business, he noticed every model SKU had at least two units in stock, regardless of sales history. The logic was that a store of Colonial’s stature shouldn’t be out of any models. While this has validity, Steve cut back many slower moving SKUs to “sell one, buy the next one” category. This reduced display space requirements and freed up cash. Moreover, the same concept is used with photographic accessories.

Retail Ups and Downs

Last year, Colonial was hit with ransomware. They are philosophically opposed to paying ransom. Insurance reimbursed part of their recovery costs. Fortunately, they had recently updated their computers and had the old hard drives. They used them to rebuild their system. Their cost for IT help and new equipment was slightly less than paying the ransom. Paying ransom may not resolve the threat.

Their lesson: Ensure everyone in your company understands basic Internet security and phishing perils. Colonial was closed for nearly four days while the system was rebuilt. As before, there are no connections or access points between the operating systems. Backups are by hard drives and cables, not the Internet.

Furthermore, employee cell phones are a challenge. Colonial suggests employees not give out their cell numbers. Some customers don’t recognize times when it’s not appropriate to call. With calls going through the store, it restricts customers to the time an employee is on the clock. Additionally, if customers call when the employee is out, questions won’t get answered with the speed and accuracy they deserve.

Also, today product scarcity is an ongoing situation for retailers. Consumers don’t believe manufacturers have product to ship from their own websites directly but won’t supply retailers.

Mike believes “direct competition by vendors not only gives salespeople a disincentive but also strains credibility with consumers. Manufacturers decide where they want to ship and what channels they want to stay alive. It’s ironic to hear one manufacturer lost $500,000 on a phony web scam and then reduces shipments and credit limits to U.S. retailers.

“Local retailers have a vested interest in keeping photography a vibrant, growing industry. Diverting product for manufacturers to squeeze a few percentage points of profit shows their short-term focus.”

Used Equipment Paradigm

At Colonial, used equipment sales are growing. Saturday morning was once a slower time. Now, each Saturday features “Cash for Cameras” buying. Equipment purchased for cash must be held for 30 days, reported to police services and also requires additional record-keeping. This generates extra costs for Colonial. Customers are told the cash price is 20% less than the trade-in price, which doesn’t have regulatory issues. Many customers choose to trade.

Used inventory that hasn’t moved in a while is wholesaled to companies like Calagaz Photo or UsedPhotoPro when their teams come through the area. Further, Colonial doesn’t sell used accessories. They’ve learned camera bags that survived hurricanes/floods can never be cleaned and the resultant mildew smell impacts any gear stored in them.

Colonial uses dakis.com for their website. They find they’re best served by not selling used equipment online. Their used equipment customers boost traffic coming into the store. In addition, the retailer finds the extra work to photograph and catalog used items reduces margins without generating enough increased or more rapid sales to justify the expense.

Moreover, they like to have their used gear for their local customers. When customers search for new products on cphfun.com, the store’s site also shows used equipment and aftermarket equipment. With widespread product shortages, this has allowed customers to find a different solution to their product needs.

Additional Photo Services

In addition, Colonial uses PhotoFinale.com for their photofinishing app and website. Colonial Photo also processes film for other labs and retailers.

They will send back the actual developed rolls so the originating store can scan them. Or they’ll send just digital files, whatever the sending store requests.

Furthermore, many camera stores used to do picture framing. Colonial still does. In fact, it continues to invest in new technologies and machinery to do bigger prints and custom framing.

Additional services include rentals; metal prints and photo gifts; photo books; photo restorations; scanning and reprints; passport ID photos; as well as video and DVD transfer services.

What’s more, Colonial offers equipment repairs and cleaning. Before he had to relocate, they had a repair person, with his own repair company, housed in their warehouse. A qualified technician on-site ensures only functioning used cameras are bought or traded in. In addition, the technician repairs it quicker and cheaper than sending it out.

Customers get faster and more economical services compared to most manufacturer repair stations. Now, Colonial Photo & Hobby is looking for someone to have space in their building, to do repairs for Colonial and others.

Giving Back

Steve, Mike and Jacob Rausch give a lot back to their community. They don’t brag about it. In some cases their benevolence isn’t even public knowledge. For example, IDignity (idignity.org) is a nonprofit that helps homeless and others get proper legal IDs. Photo IDs enable them to get employed, receive benefits and become productive members of society.

Everyone served by IDignity who needs a photo ID gets it free through Colonial Photo & Hobby. Colonial doesn’t ask for any recognition from IDignity. They’re happy knowing they’re helping others.

Benevolence is also evident in their relationships with store employees. One employee said, “Until Mike told me I could do the job, I never knew I could overcome my dyslexia.” A second said, “When I needed help, they gave me a loan. It was so huge I didn’t think I could ask them. They understood my need and offered it to me.”

Looking Forward

Colonial Photo & Hobby will continue to sell product to their customers far into the future. However, what they’ll be selling is uncertain. The Rausch family hopes the photo industry learned during Covid that scarcity allows for adequate margins and creates demand.

Today it’s common for customers to say, “Put my name on your list. Call me when it’s available and I’ll come pick it up.” If product becomes widely available, customers won’t feel the urgency to buy. The Rausch family fears we’ll go back to aggressive promotions. This would hurt profits for both retailers and manufacturers, without significantly growing the overall industry.

In addition, they hope hardware manufacturers see big-box stores aren’t growing the business like stores that educate, entertain and train future photographic consumers. If margins are available to allow photo stores to continue growing the business, specialty camera stores have a bright future.

For their part, Colonial will continue as a big supporter and influencer of photographic products. Notably, for more than 68 years, three generations at Colonial Photo & Hobby have maintained an exemplary ambiance and shopping experience for their customers. For this, they deserve the title of Digital Imaging Reporter’s 2022 Dealer of the Year.