After watching his film-based photofinishing business decline for two years, Jim Schwarzbach decided he needed to regain control again. So after some 20 years in photo retailing, Schwarzbach decided to set aside most of his old assumptions and rebuild his business using a new model.
As a result, Jim's Photo Lab in El Paso, TX, has transformed itself in multiple ways in the past five years. Where it once was almost exclusively a one-hour lab, now the store offers commercial services, a portrait studio and a wide range of merchandise to complement photofinishing. "We needed to find a way to do more than just develop and print a roll of film; we needed to create not just a destination, but a distinction," Schwarzbach says. Joining the Kodak Image Center Solutions (KICS) program helped him do that by creating a consumer-friendly retail environment. "We needed to remodel," he says. "The Kodak program refreshed the store, helped me market our products better, and gave us a cleaner look."
As part of joining the KICS program, the store added a selection of frames, albums, photo gift items and other merchandise: "Sales went through the roof for retail items. When we first became a KICS-participating store, I was seeing 200 and 300 percent gains." He says the program also provides built-in promotions with collateral support. "Last year we had a battery promotion that was phenomenal. We moved boatloads of batteries."
Digital Photofinishing as a New Centerpiece
Schwarzbach had built his business on photofinishing, however, and watching that business shrink drastically by the growth of digital cameras hurt. "You've got the big-name printer manufacturers telling people how easy it is to print their own pictures at home," he says. "And a lot of people took their advice." Now, he argues, the independent photo retailer has to fight back with his own message.
"It's embarrassing to admit, but I had to take my own sister around the corner from her home in Dallas and show her that she could buy true photographic prints from her digital camera files," he explains. "My own sister! We talk all the time, but it never occurred to her to come to me for advice about printing her digital images."
He's doing what he can to educate consumers about in-store digital photofinishing, but he's not going to depend entirely on them. So Jim's Photo Lab is pursuing a multi-tiered photofinishing strategy that includes not just consumers, but increased emphasis on the portrait studio and an entirely new market: digital sports photographers.Customers talk with owners Jim and Gretchen Schwarzbach, and other employees, at Jim's Photo Lab in El Paso, TX. Merchandising islands on the sales floor promote sales of frames; wall displays contain film, photo gift items and other merchandise in customer-accessible racks.
"We're doing more than 8,000 units of package printing monthly for just a few sports photographers," he says. It's high-volume, low-margin work. But it evens out the peaks and valleys of his consumer business. And it's growing at a phenomenal rate—more than 500 percent this year—as the store adds new sports photographers to its customer list.
As a result, Jim's is one of the first retail labs in the country to handle more digital than film-based photofinishing. About 70 percent of his photofinishing business is digital. (Without the sports photography, only 40 percent would be.) Jim's Photo Lab operates two Noritsu QSS-2711DLS digital labs. Having two identical labs gives the store the flexibility to balance workload and provide backup.
It also gives him new ways to sell. Two Kodak Picture Preview Centers with Preview & Select in the store, are used to promote reprints and enlargement sales. Digital customers who use the workstations as self-service kiosks and input their orders directly into the digital workflow, get a discount off normal pricing of up to 33% (the equivalent of second-set pricing). Employees call the workstations "Newman," because when customers started using them to submit orders, some said, "It's like having a new man at the counter."
As Photographic Processing talked to Schwarzbach, two customers walked in with photofinishing orders. One went straight to the Preview & Select workstation to submit her order. The other, a film customer who swears she'll never move to a digital camera, took her roll order to the front counter.
"Those are both real good customers, and we needed to find a way to give them both what they needed," Schwarzbach says.
Portrait Lab Brings in New Customers
Jim's has offered in-house portraiture for years, but it really began promoting it seriously just a year ago. Schwarzbach markets the service primarily to two kinds of customers: local businesses and families with children.
Business customers like the studio because they can get in and out in 15 minutes, leaving with a CD of their new portrait in hand. The CD contains the image in several different resolutions, which are clearly labeled for e-mail use, newspaper use, magazine use, etc., so local businesses can just e-mail out a file as needed for different purposes.
As for children, Schwarzbach learned years ago that mothers love pictures of their kids and will buy plenty: "Besides, kids are a lot of fun and nobody else around here seems to go after that market."