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Kodak Seeks Digital Answers in 500-Store Test

Big Yellow Hopes One of Four Systems Will Be
"The Answer"

In one area we have the traditional photo specialist or on-site lab seeing his roll film volume shrinking. He keeps hearing about the opportunities that are on the horizon in the digital world and that he'd better open his wallet and get his digital equipment in place now;
On another, we have the wholesale finisher, primarily Qualex, seeing it's overnight roll film volume diminishing on two fronts: it's own OSP customers are skimming off the rolls in increasing numbers as the on-site sector continues to grab a larger piece of the processing pie; and, as digital images replace negative images;
Yet another, are the electronics manufacturers who are offering more sophisticated home photo printers at decreasing price levels to build a market for their high margin inks and papers (like Epson's new printer, Stylus Photo 2200, with seven color cartridges);
Finally, the myriad of kiosk manufacturers popping into the game from all corners—photo industry, electronic industry and others—with a wide variety of product configurations hoping that they have The Answer.
In dead center of the conflagration is the digital camera shooter torn by: the tradition of taking film in to a store or lab for prints from negatives but unable now to find one of the few retail sites for prints from memory media; a multitude of online processors offering prints from digital images; the lure of printing at home while, though fun and creative, is costly and time consuming.
All are seeking the Holy Grail of the new digital world. But, only one, Kodak, is putting up millions of dollars to really find it.
On October 1, Kodak will kick off a market research program seeking to understand the right combination of product and location to convince the digital camera shooter that it makes more sense to stay the traditional course of obtaining prints from digital images through a retail source than a do-it-yourself route. They will do this by installing four different system concepts in a total of 500 retail locations in a 13-county Atlanta metro area. The test will run to April 1, 2003.
The ambitious program was discussed with Kodak's Paul Tucker, marketing manager, photo finishing services, new products, at a time last month when the plans were still being formulated and not all of the details were tied down. Yet, enough was revealed to suggest that this is the largest market test I've ever seen in our industry and an indication that Kodak is seriously concerned about which fork in the road the digital shooter is likely to take and what can be done to influence the course. Fortunes are at stake.
According to Paul, most digital picture takers also shoot with film. He calls them hybrid shooters: a person who averages 240 film exposures and 144 digital exposures a year. All of the film exposures end up as prints, but of the digital exposures, only 100 are 'saved' and only 17 ever get printed. Ninety-six percent of those printed are done at home. A curse to the processing industry.
Focus group studies revealed to Kodak that: 1. Digital shooters didn't know they can get prints made from their media at retail stores; 2. They didn't realize that "I could get this level of quality."
Kodak felt it was necessary to find a way to better educate the digital folks as to what was available at retail and which of the variety of digital solutions would best suit their needs. They decided to blanket one entire area with a big marketing campaign to see what they could learn.
Why Atlanta? Paul said they selected Atlanta for its 'digital demographics' including such elements as PC usage, digital camera ownership and indications of intended purchases of digital cameras. Also, the large variety of 'cross channel' retailers both in and out of the traditional photo trade. My guess is that having Kodak's marketing headquarters in Atlanta may have played more than a small part.
According to Paul, the 500 systems will be placed as follows: about 50% in traditional outlets (photo specialty, food, drug, mass merchants); 25% in consumer electronics outlets; 25% in "new channels", e.g., book stores, coffee shops, office supply, hotels, etc. At this writing not all agreements were signed so Paul was reluctant to reveal the specifics. However, one can generally guess who they will be. Criteria: loyalty to the Kodak brand.