Qualex’s New Tack—Tune In, Turn On, Drop Off (Your Media Card)
Qualex is faced with the same problems as everyone else in the finishing industry: film is going out, digital is coming in. The only thing that separates the Qualex problems from other finishers is its size, which adds to the difficulty of dealing with the shift.
Brad Kruchten, president of Qualex, is in command of turning this huge battleship hard to port as it sets its new course. In an interview at PMA, Brad talked about some of the changes he is making to swing his wholesale operation into digital gear.
Brad said that in 2005 it is expected that 15% of all orders coming into Qualex will be from digital media, a 300% increase from 2004. Some of this incoming digital work now comes through its Kodak EasyShare Gallery (formerly Ofoto) online program or digital uploads via such retail partners as CVS or Wegmans. Ofoto orders are returned by mail; retail uploads are returned to the retail location for customer pickup.
The rest is expected to be generated by a new program scheduled to begin in June or July that will provide for customers to deposit their digital media cards or CDs into Kodak drop-boxes of which there are about 30,000 in the U.S. These orders will be sent to the closest Qualex lab where they will be printed and returned to the drop store the next day—unlike film which is a two-day return.
Brad said that all Qualex labs are digitally enabled to handle all orders.
He indicated that a new mini-envelope will be provided for insertion in the standard order bag, designed to include the consumer’s CD or media card. They will be returned with the print order.
What happens if the customer’s order and 1-gig media card get lost? A replacement roll of film won’t work here. Brad said that provision would be made to offer a replacement media card—with some cap as to its size. Hopefully, the customer has backed up the images on the home computer and can recapture lost images. A plus over the lost film problem.
This summer Qualex will also test a new program offering such custom products as photo books with images printed on two sides of each page, bordered prints, 4x6 albums and a variety of templates. Brad said the program would be tested in select markets, not identified, as a prelude to a national rollout.
On the film side of processing, Qualex is faced with the same reduction in roll counts that everyone sees. Some locations were doing about 15-20 rolls a day but are now sending in about 5-10 a day, according to Brad.
With so few rolls being picked up by its route drivers, Qualex has had to face the reality that its huge infrastructure of wholesale labs could not be maintained. At the height of the Qualex program to acquire regional wholesale operations around the country, Qualex had over 100 locations. As recently as 4-5 years ago it had over 50. Last year I reported there were 23 remaining. The close-downs extended to such old timers as its huge facility in Fairlawn, NJ, which had just celebrated its 50th year in operation.
Qualex has continued to close labs and last month shut down two more, Orlando and Phoenix, to bring its total to 11. The remaining labs are in: Allentown, PA, Atlanta, Chicago, Dallas, Denver, Fountain Valley, CA, Hartford, Honolulu, Novi, MI, Portland, OR, and Sacramento.
“I sincerely hope our digital program grows fast enough so that more labs will not have to be closed,” Brad said.
Despite the closing Brad said that 90% of the U.S. population is being served by the second-day turnaround program which was introduced last year as a cost saver.
Also, Brad said that courier service expenses were mounting as rolls fell and that courier pickup is now free only to those accounts that bill over $20,000 annually.
San Marco Imaging (né Gretag) Back With Three Minilabs
It has taken about two years, but San Marco Imaging, Italy, has finally put the pieces in order, presenting a line of three digital minilabs at PMA and setting up a distribution structure in North America. San Marco acquired the assets of the bankrupt Gretag in May, 2003.