“It’s a Kodak world,” stated Brad Kruchten, general manager, Kodak Retail Printing, at the company’s February 1 PMA press briefing. He was jokingly referring to a recent episode of Celebrity Apprentice in which Kiss lead singer Gene Simmons coined the phrase while attempting to sell Kodak printers to the public. However, judging from the company’s new solutions to help retailers take over the photo world, I mean, to improve their businesses, I’m guessing Kodak would like the tag line to stick.
According to Kruchten, the company wants to return to a time (started by George Eastman) when consumers pushed a button and retailers did the rest. Kodak wants to make photography easy and fun while at the same time, allowing consumers to tell their stories their way. “Consumers have too many choices, which causes too much confusion,” explained Kruchten. “But if they enjoy it, they’re going to do more of it. It’s as simple as that. And right now,” he lamented, “it’s still too difficult because of all the choices.”
Making the process simpler will require retailers to move away from what Kruchten calls “a transaction approach.” “In the past,” he noted, “the film processing activity was very transaction driven—consumers walked into the store, dropped [film] off, and came back and picked it up. It wasn’t an experience; it was a transaction. This is also not a price game. People will always be interested in price,” admitted Kruchten.
“Open any circular and 9 times out of ten the circular advertises a price verses the value [of the product]. We have to help retailers understand that it’s not just about price. Price may shift the consumer from one store to another, but it doesn’t make them print more. They aren’t going to print ten more images of their baby because it’s a lower price. And,” he adds, “I have never had someone show me a picture and say ‘Guess what? I only paid 9 cents.’ They don’t see it that way, so why are we selling it that way?”
Where to Invest Next
Kodak will continue to drive the story element of photography verses the static picture, says Kruchten, which the company believes everyone will embrace and drive forward. “The biggest challenge from the consumer perspective is content,” he reiterates. “They have too many choices and too many images (they struggle to manage 500 pics on a single memory card). Plus, there are tons of things consumers can do with their images, and so [the choices] become overwhelming. Because there is too much content and too many choices, their natural reaction is not to do anything. So we have to propel them past that, and making it easy is an important step.”
On the retail side, retailers know they’ve lost profit from traditional film/print volume. But what do they replace it with and how do they make it grow? “Prior to 2007,” stated Kruchten, “ninety-five percent of all the revenue came from 4”x6” and that’s what retailers built their businesses around. Question is, what’s the next big thing after 4”x6” prints? Cards, photo books, collages, DVDs? Right now, I don’t think there’s any one clear winner. They’re all great things but none of them has come close to replacing the 4”x6” print.”
Consumers can create images at home, online, and at retail. They can get those images in 2 minutes, 2 hours or 2 days. They can either do it themselves or have someone do it for them. The choices are nearly endless. That said, where should retailers invest their time and money so they don’t put themselves in a hole? Kruchten admitted retailers can’t invest in all [solutions] because they have limited resources and limited capital.
“The complexity we’ve entered into truly is something that retailers are now struggling with,” noted Kruchten. “How do they offer the consumer choices—and there’s no question they want choices—and at the same time become profitable? To me,” continues Kruchten, “that’s the holy grail for this business—combining the ability to offer choices and allowing the retailer to make money.”
Model Business
Kodak also has a new business model to help retailers decide which equipment to purchase for the best return on their investment. “The model helps them understand what their business is and how to increase their profits. Retailers provide us with their requirements—footprints, products they want to produce, volume they expect, and what they want to establish,” explains Kruchten.
“The model shows [the retailer] what they should purchase and/or how to integrate equipment they already have. We sit down with them and give them recommendations as to what’s the right step for them whether it’s for a single location or group of stores.
“We’re about adaptability and that’s the theme you’ll see around the booth,” stated Kruchten. For example, retailers with Kodak’s G3 and G4 kiosks (of which there are 90,000 installed worldwide) receive free upgrade releases. “Every time we have a new software release, we upgrade everybody for free,” he concluded. “Make an investment with us and every time new product comes out, we’ll give it to you, so you can drive more business. And we’ll keep adding more capabilities to that equipment and help you grow.”
