A sea change is underway for independent photo retailers as digital cameras become ever more popular. More and more, retail camera and photo processing businesses are focusing on consumers—especially affluent ones—as the surest route to strong revenue growth and high profit margins. Few photo retailers today are achieving success by primarily serving a customer base of established and aspiring professional photographers.
How are photo businesses making the transition to reach the vast market of amateur and casual photographers? A key element in their strategy—and one practically dictated by the need to meet the competitive challenge of ‘big box’ consumer retailers—is to increase the ‘comfort level’ that customers experience throughout their stay on the retailer’s premises. The goal is to make it inviting, easy and enjoyable for customers to browse and buy, use digital front ends to process and personalize their digital photos, and interact with employees in positive ways that associate the retailer with a satisfying picture-taking experience.
“We’re not your father’s camera store anymore, that’s for sure,” says Michael St. Germain, owner of The Concord Camera Store in Concord, NH. “Twenty years ago, when we were mostly selling 35mm SLR cameras and other professional-league gear, we could get away with having a store that was austere and cluttered. No more. To gain the increases in traffic and revenues we wanted, we had to make big changes in our décor and presentation as part of our ‘re-merchandising’ to attract the broader public.”
David Guidry, owner of Lakeside Camera in Metairie, LA, agrees but notes that the transition to a consumer-oriented business brings challenges—and opportunities—of its own. “Just as Starbucks has risen above the QuikStops and other mass market businesses serving coffee, we have created an upscale consumer-friendly environment where we can sell 4 x 6 prints for 49 cents apiece, not 19 cents like Sam’s Club. Our branding and positioning includes an array of new value-added photo and imaging services and a top-to-bottom makeover of our retail environment. The result: we are attracting the prized base of specialty store consumers with a household income of $75,000 and up who want premium services and are willing to pay for them.”
Women Driving The Business
St. Germain and Guidry both identify the force driving this change in the retail photo industry as a demographic one: the number of women consumers with significant disposable income has grown dramatically in the last two decades. “Reports from our point-of-sale systems tell the tale, and it’s one common to all segments of the retail industry,” says St. Germain, who can claim some authority on the matter as the immediate past president of DIMA. “Discretionary spending by female consumers is huge. Today in our business, 63% of our customers are women; 35% are men, and the rest comes from individuals representing businesses, civic groups and municipal agencies. In terms of dollars, 53% comes from women; 43% from men, with the rest from organizations.”
This demographic shift has coincided with the advent of point and shoot cameras in the 80s, a trend that continued into the 90s with the arrival of digital cameras. “We were able to capture much of this new customer base by offering high-quality consumer-friendly products and services, even as we scaled back our less-profitable business of providing professional equipment mostly to male photographers,” St. Germain says.
“But,” he adds, “we saw that just putting the right point and shoot ‘solution’ into the hands of consumers wasn’t enough to enable us to take full advantage of this exploding market opportunity, or to keep us competitive against discount retailers. We needed a way to create a sense of loyalty in our customers by giving them an experience of comfort and satisfaction that would keep them coming back again and again.”
To that end, St. Germain decided that a complete store redesign was necessary. After expanding into an adjacent space, he created a plan that incorporates design concepts implemented by some of the world’s most successful retailers, including Williams-Sonoma, Pottery Barn and Restoration Hardware. “I’m not a retail space designer but I know how to copy the best ideas out there and tweak them to best advantage for our business. After making several reconnaissance visits, I could see what these retailers were doing to attract the greatest number of customers possible. Especially women. These stores —none of which are ‘low price leaders’—really know how to merchandise to women.”
Guidry also remodeled his entire store to accommodate his new kiosk center, even employing an architect to design the project and ensure that he achieved his goal of creating an inviting area for his customers. Both Guidry and St. Germain have plans to expand their kiosk areas even more, as adjacent store space becomes available.
Self-Service Kiosks Offer New Revenue Opportunities
An important element in the store environment of any independent photo retailer is the optimal placement of digital kiosks. Both Concord Camera and Lakeside Camera have opted for standalone workstations in a café-like environment—each with its own matched table and chair with hand bag hook, separated from other kiosks for privacy. Both offer bottled water and gourmet coffee, free of charge, and have an impressive collection of toys to keep children occupied while their mothers use the input stations. “Our two most popular image boxes are in the most secluded area, where customers appreciate the quiet and have a greater sense of privacy,” St. Germain says.
The kiosks, AgfaPhoto image box stations are linked to the vendor’s digital minilab – enabling customers to flexibly modify the images from their digital cameras, incorporate them into any of a wide variety of output formats, and place orders directly to the minilab for printing or CD burning. After transferring their image data to the kiosk, users have a number of options for processing their orders. They can direct the order to the kiosk’s AgfaPhoto image print.300 for instant printing. Or, they can route the order to an AgfaPhoto d-lab digital minilab for prints on classic photographic paper.
The AgfaPhoto image print.300 instant printer uses the thermosublimation process to produce high-quality prints on AgfaPhoto Belanto paper which are long-lasting, glossy and even water-resistant. Customers can choose between the formats 4 x 6- and 6 x 9-inches. Both formats can be output from one printer without changing the paper.
Says Guidry, “Our digital minilabs and front-ends are important to our strategy of differentiating our business from that of mass retailers. For example, we have developed a series of custom borders that our customers can select for their photos at the kiosk before sending the order to the minilab. Within just 15 minutes, during which time they can relax with a cup of coffee or bottle of water, their photos are ready.”
St. Germain agrees. “Our customers know they can make pictures from their digital camera more easily, inexpensively and enjoyably in the comfortable environment we have created, than at home. We know that message is getting through, and that it’s a viral one, because so many customers come back with friends in tow to show them how fun and easy it is.”