Photographic processing – remember that expression? Wikipedia defines this as the processes by which photographic film or paper is treated after photographic exposure in order to produce the desired negative or positive image. Photographic processing transforms the latent image into a visible image, makes the visible image permanent, and it renders the finished visible image insensitive to light.
What they don’t add to that definition is that this process essentially carried the retail photo business for years. And when the concept of the one-hour minilab hit the scene in the 1980s, the lid came off. Soon after this the term “cash cow” became a familiar one for those in this business – and that it most certainly had become.
Fast forward to the mid to late 1990s and the first consumer-level digital cameras began surfacing, and suddenly consumers could actually see the images they had just captured on the back of the camera via an LCD display. Not long after that, the home printing market began offering those same folks the ability to make their prints at home and that market exploded.
Once we all woke up in the new millennium, entirely new printing, sharing and archiving habits had formed when it came to consumer memory keeping.
What had happened may be summed up by what consumer Carrie Dooley had to say recently.
“A certain amount of mystery was gone from the equation when I could see the image right after I captured it,” began Dooley, a Birmingham, AL, mother of two. “Then when I started uploading and looking at the images on my computer and setting up online accounts for people to come view them, that became the new paradigm. The printed image just kept getting pushed further down the priority line.”
As a Gen X mother, Dooley perfectly represents “Jennifer” – the demographic PMA targeted a few years ago as the one at the top of the imaging retail pecking order.
While Dooley’s story doesn’t exactly paint a rosy picture of the future of the retail print market, many analysts feel it’s an important one to continue to follow.
“The key here is she still wants to take and share her pictures with family and friends,” explained retail analyst Lauren Sosik. “This fact alone is great news and it simply represents a customer that is moving in new directions. Imaging retail shouldn’t look at her as a customer they are losing. They should be looking at her as a customer that is changing and has new needs.”
Lyra’s Steve Hoffenberg agrees and added, “While these imaging habits that younger demographics are forming appear to be about moving away from 4×6-inch prints, they don’t have a history with 4×6 prints. We feel this crowd is ripe for larger size prints and will be more interested in photo books and other photo gift items that retailers can do much more easily today. The 4×6 print is so foreign to this younger crowd, their reaction to it has been, ‘What would I do with this?’”
Shifting Emphasis
Hoffenberg added that the industry has reached a point where the emphasis should be shifted away from 4×6 prints altogether and placed on all the other products that are available on the retail output side of the equation. “It’s time to punt on the 4×6,” Hoffenberg quipped. “The industry has been weak in the area of communicating all these great new products that are available today. Retail needs a stronger message to consumers that there are many exciting new ways to share memories and tell life’s stories with their images.”
That feeling hasn’t escaped every imaging retailer, as David Guidry of Lakeside Camera Photoworks in Louisiana latched on to this premise when restarting his business after Hurricane Katrina.
“What I have seen since we have had to basically start over the business is that we have a communication problem in this industry, not a product problem,” he explained. “The reaction from consumers to these lifestyle products is that they are way more excited than they ever were over a 4×6-inch print but we aren’t communicating exactly what these products are and how easy they are to do.”
Guidry added that he feels the industry, as well as he himself, have been guilty of “over-complicating” some of the newer products and services and likened his new approach to more of a “restaurant menu” marketing scheme. “The customer simply needs to see all they can do in a simple, easy to understand form and then help them pick the product that is perfect for them,” he said.
Expanding on Guidry’s notion and taking it a step further, perhaps no industry has done a better job diversifying their product offerings than the fast food industry.
Sosik opined, “While no one is suggesting imaging retailers have the budget a McDonald’s has, they could still learn a lesson from how this company has expanded and marketed its product line. Everything they make is offered in a variety of ways to appeal to a variety of demographics and they just keep adding to the menu. The imaging industry, of course on a smaller scale, has to start doing the same thing. Make sure you offer all these new offerings in an easy yet exciting way that everyone is made aware of as soon as they enter the store – a la the McDonald’s Dollar Menu or an approach to that effect.”
Lucidiom’s president, Steve Giordano, Jr., would like to see the industry focus more on what he calls “creative” print orders. “In 2008, ninety percent of orders were non-creative and 10 percent were creative. And the average non-creative sale was $17 while the average creative order was $37? Clearly, creative is how we will get back to prosperity. In 2009, the industry should strive to move creative orders from 10 percent to 15 percent,” he explained.
“Creative is not only more profitable, it’s what consumers want. With the digital revolution, consumers have gained greater control over their personal content, including pictures. The photo book has gained traction, but consumers are quick learners and soon they’ll be looking beyond the photo book for new creative products to use to express themselves and share their memories. If you’re not already on board the creative train, it’s time to get an express ticket.”
What the Numbers Are Saying
While the “photo gifting” market is still taking shape and adding dimensions, the retail “picture” printing market is expected to peek by 2010 according to some analysts.
According to recent data from InfoTrends, the photo print market is expected to peak in 2010 before beginning what they term, “a period of slow decline.”
The research firm’s David Haueter, Associate Director, Photo Printing Trends told us, “The market is not expected to experience a sharp decline once the decline starts, but instead we expect it to be a gradual decline as other viewing and printing methods such as digital picture frames and photo books enter the market on a broader scale. Even so, digital prints are competing against other viewing and printing methods today that the film market never had to worry about.”
NPD’s numbers in a recent study took a look at where the printing is taking place and the photo specialty numbers could certainly be a bit more robust.
“The mass merchant channel continued to have the most retail traction, where 20 percent of recent digital camera buyers stated they were printing their snapshots,” explained NPD’s Liz Cutting. “And six percent of recent digital camera buyers stated they were printing their snapshots at photo specialty stores.
Cutting added that the recent trend worth noting is the fact online upload for retail pickup saw a significant gain over the period (November 2007 to November 2008) going from 10 to 15 percent. Cutting sees this as opportunity for the specialty locations.
“Considering the pickup of consumers ordering online and picking up at the retailer, and the desire of consumers for a convenient location to encourage them to print their photos at a specialty retail outlet, an easy to use online presence is an avenue of opportunity for the specialty dealer,” she explained.
Perhaps of equal importance, Dooley agreed, adding convenience isn’t the only factor when picking a location for pick-up.
“We’re ordering online a lot lately and when it comes to my prints and even more so with a specialty item like a photo book or blanket, I feel like a photo store is simply going to produce better results so I’m far more likely to go that route when I upload and order.”
