Magazine Article


Online Uploads to Retail A Growing Category: Ritz Switches to Kodak Gallery for One-Hour Pick-up
Retail Photofinishing Scene

In the days of yore, when the lab owner heard the buzzer or ding-dong, it meant the front door of his business was just opened and, hopefully, a customer was either bringing in a roll of film for processing or coming to pick-up a finished order. (No advertising salespeople, please.) Either way, the sound was more satisfying than Beethoven's Fifth, as it meant money in the cash register.

In the digital world there is a new sound: the ping from the computer that another order has been sent to the store by a consumer from a home computer. Another online upload to be put into the printing queue because the customer might come in within the hour.

The photo-printing business model has changed, hasn't it? Now orders not only come in through the door but, maybe, from online uploads, the kiosk that you placed in the gas station on the other side of town, or downloads from some other online program that picked you for print fulfillment since you had the nearest zip code.

The online upload is the most intriguing in that it somehow preserves the old model of the customer delivering images, now on memory flash cards or CDs instead of negative film, to the store to eventually get prints. A marriage of the old analog world and the new digital world. A lot more efficient for the customer, with the major difference being that we see the customer only once instead of twice. Some plusses and minuses there.

All studies seem to show the online upload is catching on as more consumers get the technique down pat and more labs become equipped to accept such orders. Matthew Troy, Imaging and Visual Media analyst for Citigroup Investment Research, reports that online uploads were up 59% in October, the largest increase of any category—though there was no detail in Matt's report as to what percentage went to a retailer for fulfillment as opposed to the myriad of online mail services, another growing segment.

Alan Bullock, associate director at InfoTrends, says that two-thirds of those ordering online indicate a preference for delivery by mail vs. retail pickup, and that customers who order for retail pick-up tend to place smaller but more frequent orders.

PMA's marketing research director, Dimitrios Delis, reports that in 2006 online uploads for retail delivery accounted for 8% of retail printing. This was double the previous year and substantially higher than 2004 (not so long ago), when it was only 1%. Obviously, a growing segment, maybe at the expense of home printing, which dropped from 60% in 2004 to 42% in 2006, according to Dimitrios.

Lisa Woodworth, Kodak's director of marketing for wholesale and online services, said, "Online upload is one of the two fastest-growing consumer pathways for ordering products and services from digital and will continue to grow for Qualex…" Print from the in-store kiosk is the first, she said. Lisa indicated that sales through online uploads has increased about 60%, year-over-year.

Kodak's sales of enlargements run 10x more for orders placed through online than for orders from negatives. How come, Lisa? "It's the value proposition of digital. Consumers are doing exactly what they want with the pictures they like and placing orders for [enlargements] at the same time instead of film orders first and...enlargements later."

With the online upload gaining in importance, management is paying a lot more attention to the sector, as there are a variety of software choices to be made and shifts within the industry.

Rush for 1-Hour Pick-up Dollars

Ritz Camera has made a pair of significant moves in its challenge for the online-upload-one-hour-pick-up business that appears to be a growing battleground.

For one, they have partnered with Kodak EasyShare Gallery as Kodak's first retailer to offer one-hour pick-up with orders being printed in a Ritz store rather than the popular model of Gallery fulfillment at one of Kodak's eight North American labs for overnight delivery to a retailer.

Additionally, Ritz switched its software relationship for its in-house, online-upload, store pick-up called RitzPix, from the Fuji Get The Picture program to one supplied by LifePics.

The Ritz Camera/Kodak Gallery partnership to deliver a customer's uploaded order for pick-up at a Ritz location in one hour puts them in direct competition with such retailers as Walgreens and Wal-Mart, plus others. The number of independent photo specialists offering online one-hour service is also growing.

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