Magazine Article


What Digital Products Should Minilabs Stock?

What Digital Products Should Minilabs Stock?

What should minilabs/camera stores stock as far as digital media cards, accessories, cards and readers? What products are most popular? How do you sell them? These are the questions many of our readers are asking themselves as they look at new digital accessories to stock when replacing film on their peg boards. In order to get a better handle on this market, we went straight to digital accessory manufacturers and asked them for some advice for our readers on what to stock to possibly provide them with a checklist of products they should consider when ordering products from their vendors.

Wide Variety is the Key

"Staying ahead of market trends and offering a wide variety of flash memory cards and accessories is the most effective way for photo retailers to capitalize on current and upcoming selling seasons," says Jim Gustke, general manager, marketing at Lexar. "The enormous and rapid growth in the consumer digital photography category has resulted in a very real need for retailers to service photo-finishing customers, but also offers digital imaging accessories such as flash memory cards and card readers."

Gustke feels that retailers need to maintain alignment with current digital camera trends and should consider carrying a wide variety of flash memory cards, including all popular format capacities such as CompactFlash, Secure Digital (SD) and MemoryStick.

"In addition, the retailer should stock cards that address both consumer and professional photography categories. According to analysts at IDC, the most rapidly growing segment of the digital photography market is mid to high-level digital SLRs. Users of those cards look for higher-end memory cards, which suggests that both consumer and professional cards will be popular at retail in the months ahead," he reports.

Gustke adds, "Beyond photography, however, compact-sized flash memory cards are more popular than ever as removable storage media for cell phones, PDAs and hand-held gaming devices. As a result, retailers should plan to offer cards in a variety of mobile device formats such as miniSD (a smaller version of Secure Digital Card) and multimedia card (MMC), another popular format. Memory cards are not the only desired accessory at retail, in particular, with the consumer audience."

"Popular accessories include card readers, for easily transferring captured images and stored information from the user's flash memory card to their destination computer, and JumpDrive USB flash drives, simple-to-use, thumb-sized storage devices for carrying images and information wherever the user may go," he concludes.

Stock Products to Match Your Customers' Needs

"In the selling channel, labs are experiencing increasing demand to carry digital media at point of sale. There is also discussion of many labs needing merchandising support to help customers with the selection and purchase of digital media products to appropriately match their needs," points out Wendy Lecot, project marketing manager, Kingston Digital Media.

Lecot says the current shelf mix of CompactFlash cards to Secure Digital cards is running 50-50, with a combination of standard and higher performing lines for both. The call for CF cards remains steady, she reports, since it is an important component to older point-and-shoot digital cameras and mid-to high-end SLR digital cameras.

"Interestingly, a transition to SD cards has been evidenced for some of the newer point-and-shoot digital cameras and SLR models (including the Nikon D50 and Canon EOS 1Ds Mark II cameras). Demand for larger capacity (1-GB and greater) cards is strong, while the 512-MB cards continue to be popular with many mainstream customers. The channel's buying criteria for cards is a combination of quality, speed rating and price."

Effective POS Materials

"The consumer electronics industry continues to be a bright spot in the economy with sales expected to reach $125.7 billion in 2005, an 11% jump over the $113.5 billion dollars sold in 2004," says Greg Rhine, senior vice president of Retail Sales SanDisk Corporation. "Demand for removable storage cards such as CompactFlash, Memory Stick, SD and xD Picture Cards continues to expand as demand for digital cameras, camera phones and other digital devices including MP3 players, USB flash drives and even portable game players continues to increase," he points out.

"How can minilabs and camera retailers take advantage of this trend? Since consumers are often confused and intimidated by the wide range of card formats currently available, retailers who make it easy for consumers to purchase the right card can increase memory card sales and keep customers coming back. Effective Point of Sale (POS) merchandising that is jointly developed with the memory card supplier can be particularly effective. For example, a consumer electronics retailer may choose a particular POS display that highlights key product categories such as digital cameras, mobile phones and MP3 players," Rhine reports.

"The same approach could replace the merchandising system in other areas of the store for continuity. A well-organized POS display is the result of a clear and well-executed category management plan that makes it easy for consumers to find what they need to purchase. Retailers should keep in mind the importance of incremental sales since many customers have a variety of electronic devices that require memory cards, and seeing a well-stocked display can easily lead to additional sales. For the most effective POS merchandising, it is crucial to choose a memory card supplier with a wide range of products in the most popular electronics categories such as digital cameras, USB flash drives, MP3 players, games and cell phones," he concludes.

Technology Driving Digital Products

"With the emergence of higher performance digital cameras and other multi-functional devices, the digital media market continues to rapidly evolve. For camera store and minilab retailers, deciding what digital media devices and accessories to stock is a challenge. It is pivotal that they consistently evaluate this ever-changing market for consumer demands, new product development and price fluctuations in the semiconductor industry," says Anthony Gomez, vice president of sales and marketing for PNY Technologies.

"The development of cell phones equipped with unique features such as digital cameras, video capture, MP3 players, video games, text messaging and e-mail is driving the need for smaller form factors. It is anticipated that miniSD, RS-MMC and Transflash will gain popularity when expandable, mobile phones flourish. This will happen after the mega pixel requirement for camera phones increases and cost declines. The industry was hoping the memory card demand for the cell phone business would hit in 2005; it now looks more like 2006 and a forward opportunity. Moreover, no universal card standard has been adopted by the industry, so the format of choice for cell phone manufacturers will most likely come down to cost."

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