PMA Trends for Dummies
So Much Mail. So Little Time.
By Jerry Lansky
The drill is always the same. The mailperson drops
off the mail and the sorting begins: envelopes with checks opened
immediately; invoices go on top of the next-week pile, unopened;
junk mail to the round file, still sealed; and 'other' mail. That
other mail could be PTN magazine, a tech notice from Noritsu, a
promotion from Kodak, or an envelope from PMA. These get added to
the growing I'll-get-to-these-when-I-can pile.
Unfortunately, the last pile keeps growing till it's about to obscure the vision of the person behind the desk at which point it probably gets reduced to a manageable height by entering it into the nation's recycling stream - often unread.
Or maybe, as in the case of such publications as PMA's Industry Trends Report, it gets put on the bookshelf with all similar productions for "future" reference, also unread. In fact, my own collection of Trends reports go back to 1987 when there were sections for electronic imaging (mainly VCR and camcorder matters) and international markets.
A few gems from that 1987 issue
- Disc film represented 15.9% of film sales; 110/126, another 15%. (All, a processor's nightmare.)
- Disc camera sales dropped to 1.8 million in '87, compared to three million in '85. (In the 1992-93 Trends, 110 still accounted for 15.9% of camera sales and disc was not even being counted any more. A fond farewell. 110, however, still hangs in there.)
- "Minilab operators have now surpassed drugstores as the largest channel for photo processing services..." (The good old days.)
- "In February 1987, Fuji and Kodak both introduced disposable cameras to the U.S." (If my memory hasn't quit me entirely, I seem to recall Fuji being there first.)
For those who put the latest Trends report on the bookshelf without a glance, I felt I might be able to provide a service by spending some time with it and pulling out specific data that I felt would be of interest to the on-site readers of this column. In the hopes that you'll stay with it, I'll try not to be too statistic-y. Understand, that the figures in Trends relate to activities through 1999, though there is one section that updates some of the information through September, 2000.
First, a few plain numbers about what went on in the industry's basic categories during 1999:
- Overall amateur market grew 4.7%, (p.16)
- Camera sales grew 9.4% to 17.7 million, (p.17)
- Film sales increased 7.4%, (p.22)
- One time use cameras were up 25.5% to 138 million, (p.23)
- Photofinishing revenue grew 4.1%, (p.24)
1999 was a rather healthy year for the industry, I would
As for retail photofinishing, let me report that the on-site processing business is very alive and well with 39.3% of all amateur rolls processed being handled by minilab equipment at all types of retail locations, (p.44). This is the highest its ever been and represents almost 50% of the dollars spent for all amateur processing.
Back in 1986, the minilab number was 23.7% and except for a dip in 1992-94, when independents were dropping like flies as they couldn't meet equipment lease payments, the progress has been steady.
But, I'm reminded of the old saw that describes one person standing with one leg in a pail of hot water and the other in a pail of cold as being, on average, comfortable. This seems to be the case of the on-site business as we look at the state of the industry and see what's going on with the various types of retail processors:
- The stand-alone minilab and camera store with lab in 1988 accounted for 31.5% of all on-site processing but by 1999 that number dropped dramatically to 13.8%, (p.44).
- On the other hand, the discount store category represented 17.7% of all minilab rolls processed on-site in 1988 and by 1999 that figure grew even more dramatically to 38.8%, (p.44). I'm not certain whether the photo specialist is standing in the hot water or the cold - but he's certainly not comfortable. Interestingly, the drug store and supermarket categories haven't moved that much over the 11 year span, growing from 22.6% to 25%, and 12.4% to 14.1%, respectively, (p.44).
The shift of rolls away from the photo specialist to the mass retail locations has been going on for years. Just the sheer number of outlets in each of the categories suggests the inevitability of this swing. According to a mathematical model developed by Trends, the number of photo specialist minilabs in operation in 1999 was about 8,500 while there were almost 18,000 mass retailers with on-site equipment, (p.26). (Not reported in Trends, Qualex has about 13,000 OSP installations making up a big chunk of the mass retailer sites.)
By comparison, I referred to the Trends 1991-2 report and found that there were minilabs in 10,200 camera stores and free-standing locations and "about 2,700 mini-labs flourished in mass-retail sites, a significant increase from 2,000 in 1990 and 1,400 in 1989." (Trends, 1991-92, p.19). Talk about dramatic shifts.
No doubt the competitive elements that have been brought to bear on the photo specialist by the onslaught of the mass merchant will continue and will probably diminish their numbers even more. The large discount chains are only getting larger as Wal-Mart, Target, Costco, etc. continue to expand. Drug chains like CVS and Walgreen's, each with over 3,000 locations already, reach for bigger numbers. Kmart, a bit player in on-site processing until recently, is committed to the on-site category in its entire 2,000 stores.