Reinventing the Deal

Reinventing the Deal

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On Saturday morning, a day before the fatal winds and rains of Hurricane Katrina were designated a Category 5, David Guidry was holding his regular weekly meeting with the staff at Lakeside Camera and Imaging, his photo specialty business in Jefferson Parish, a suburb of New Orleans. He told his salespeople he planned to ride this storm out. It seemed a plausible idea at the time. After all, the store had roll-down steel shutters installed long before to protect the place from the rowdy patrons of a nightclub just around the corner, and the place had withstood many seasons of hurricane threats and storms that had blown through the bayous before.

24 hours later, however, Guidry and his staff were packing up their families, a few possessions, and their hopes of business ever being the same. “We evacuated on Sunday and the hurricane hit Monday morning,” remembers Guidry. “I made it to a Holiday Inn in Houston with my wife, baby, grandmother, mother, brother and his wife. We were all squeezed in there, not knowing if anything would be left when we returned. It was tough…it was a bad deal.”

Worst Case Scenario

The horrifically bad implications of Katrina’s floodwaters did, in fact, include the devastation of the Lakeside store as well as the destruction of thousands of customers’ homes. It forced Guidry, like all residents of greater New Orleans, to think hard about whether or not there was a way to make a life, much less make a living, in the storm’s wake. But Katrina’s damage also gave Guidry an opportunity retailers seldom encounter: a chance to reimagine and rebuild his business from scratch, with insurance money as venture capital. Guidry’s conceptual decisions and store designs for the new operation, renamed Lakeside Camera Photoworks, are a first look at what some industry watchers believe will be the future of digital imaging retail, an invent-your-own-products-and-market-them-too business model.

Guidry’s first steps in the reinvention of his company were actually not steps at all, but miles of pedaling. “I ride road bikes,” he says. “I’d just purchased a new bike the Saturday before Katrina and I didn’t want to leave it, so I put it on the back of our car. Those two weeks we were away, I did a lot of riding. I thought to myself, ‘I don’t know what the implications of the insurance are or the nature of the damage in terms of money, employees, and customer base…but if I go back, I’ll no longer grip the steering wheel so tight, I’ll no longer tolerate unacceptable performance from anybody, and I’ll no longer take any stuff from customers who were trying to take advantage of us.’ So far, I’ve held to those decisions.”

Guidry’s decision to reopen at all was very pragmatic in the end. His insurance was such that he’d only get replacement money if he bought new equipment and rebuilt in Metairie, the Jefferson Parish location. (Guidry also owns a store across in nearby Mandeville, LA, a neighborhood which endured much less damage from Katrina). Otherwise, he’d be paid cash value for the equipment he’d lost in the flood, a significantly smaller sum. As federal aid finally made its way to the New Orleans area, Guidry realized there were tax advantages to rebuilding as well. “We’re in the ‘Gulf Opportunity Zone’ now,” he says, “which lets us double the depreciation on a piece of new equipment in the first year. The Feds have earmarked 7-10 billion dollars to help this area recover. We need it, but we’ve never seen an influx of money like that. When it happens, there will be a boom, and when it does, I will sell the boomers their cameras.”

Beyond the 4×6

Still, Guidry is planning on camera sales to be only a portion of overall profits in his new operation, especially now that margins on hardware are decreasing nationwide. Instead, he’s invested about $750,000, he says, on an enormous new printer by HP that will allow him to produce much more than just 4×6 prints. “We bought an Indigo 5000 digital printing press that allows us to do photobooks, folded cards, calendars, and more. This gives us something new. We can now offer products that no one else can offer.”

“David had a real original concept,” says HP’s Jeff Rich, a strategic account manager who sold Guidry the Indigo. “Normally, we sell the Indigo to much larger accounts. We do Snapfish and Shutterfly. But he’s ahead of the curve. He can now do what larger labs are doing: printing books, playing cards, calendars, all sorts of products that have more margin than traditional prints.”

Guidry says he realized that when re-hiring a staff (he had 56 employees before the flood, but employees around 40 now, most of those new hires) that he needed to invest in “digital artists,” people who could create original, customized imaging products. The new team went into action when the rebuilt store opened the first week of April, 2006. One of the first products they came up with using the Indigo was a professional-looking greeting card featuring the fleur-de-lis, the New Orleans symbol that adorns the football helmets of the Saints, and the phrase, “We’re So Glad to be Home for the Holidays.” The cards, an emotional expression of community loyalty, hit home with the people of Metairie, many of whom were displaced the first holiday season after Katrina.

“We knew coming back that we could not be competitive with cheap prints,” says Ginger Gauthe, Guidry’s long-time store manager who, after her own harrowing evacuation journey, returned to New Orleans. “Our quality and services are better than competitors, but can you really get enough print business to survive? The answer is no. We needed an edge, a niche, something to bring people here.”

Embracing Change

Gauthe says that Guidry recently issued his staff a challenge: take 45 days and come up with 30 new products for the Indigo that will draw in customers. The staff researched, brainstormed, and delivered. Among their ideas: two different versions of address labels, 2-inch round stickers with people’s pictures on them, trading cards for local high school athletes, window clings, peel-and-stick gift cards, headshot/resume cards for local artists, press kits, fake magazine covers, all manner of business cards, and mousepads.

“Thinking like this isn’t easy,” says Gauthe. “It was so much easier when you just took in a roll of film, printed it, and gave it back. But at the same time, it’s exciting. It keeps us growing and alive. I hate to see film go, but I wonder if I’d still be so interested in this business if things weren’t changing.”

Changes have included not only the new Indigo-enabled imaging products, but a new store design that has a coffee-bar feel and stations for other future-thinking services like video production/editing. Michael St. Germain, a New Hampshire camera shop owner who flew down to New Orleans to help Guidry out with merchandising in the new store, says he thinks Guidry is showing the country what the future of imaging retail will look like. “David’s an inventive guy. He went out on a limb with the Indigo printer and it’s been wildly successful for him. I think he’s proof that out of chaos comes grand opportunity.”

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