Magazine Article


Single-Lens Reflex Rush
The DSLR market keeps gaining ground--a perfect opportunity for photo specialty


Spurred on by increasing consumer interest and attractive price points, DSLR cameras continue to make a splash on the photographic landscape. And even though overall digital camera sales have started to decelerate in the United States, the market continues to grow, especially within the DSLR segment--good news during a time when the looming economic crisis is putting a halt to (or at least slowing down) many discretionary purchases.

According to the NPD Group, total digital camera sales for the first half of 2008 increased 6 percent in units and declined 1 percent in dollars. But while point-and-shoot camera sales rose 5 percent in units and dropped 8 percent in revenue, DSLR unit sales gained ground: In the first half of 2008, DSLR dollars comprised 30 percent of total digital camera dollar sales and 8 percent of units. DSLR units on their own rose 23 percent, and dollars increased 20 percent. 

A big reason for the DSLR dominance is appealing prices. Thanks to lower average selling prices, DSLRs less than $600 accounted for 23 percent of all sell-through in 2007, up from 9 percent in 2006, according to NPD.   

"DSLRs are increasingly becoming a more important piece of the total digital camera revenue picture," says Liz Cutting, senior imaging analyst for NPD, in NPD's most recent correspondence on this matter. "Add to that the fact that there is a greater attach rate of accessories, and a more active printing consumer, and retailers and manufacturers have the perfect opportunity to capture loyalty among a growing lucrative consumer base."

Retail Strategy

Just because the big-box competition is starting to more prominently display its DSLR inventory doesn't mean that photo specialty is going the way of the daguerreotype. In fact, according to NPD, the photo specialty channel is outpacing total market growth in total digital camera sales, with dollar volumes for the channel increasing 7 percent, and units increasing almost 9 percent from January to May of this year.

The reason for the independent photo retailer's continued success: customer satisfaction. Photo dealers have traditionally been able to offer a better buying experience to their customers, with the customers, in turn, offering higher satisfaction ratings to photo specialty. For the 12 months ending in May 2008, according to NPD, 86 percent of digital camera consumers said they were satisfied or very satisfied with their overall experience at a photo specialty store. So how can said retailers continue to dominate in the DSLR market?

First, know thy customer, and cater to them. According to NPD's consumer tracking service, knowledgeable and respectful salespeople were cited by 83 percent of consumers as a key component of their superior buying experience at photo specialty. Consumers want the one-on-one attention that only the indie retailer can consistently provide (another interesting finding shows that 82 percent of photo specialty customers thought they got a good price, versus 72 percent of the market as a whole, showing that the perception of photo specialty as being more expensive may be starting to wane).

Next, know your products. Hasselblad, for example, just introduced the new 50MP H3DII-50, as well as the development of a Tilt/Shift adaptor that's optimized to work with the new 50MP sensor. "Retailers can show, for instance, examples of the distinct differences in quality of the professional medium-format DSLR," explains Mark Duhaime, marketing manager for Hasselblad. "In addition, they can show the flexibility of the system by demonstrating the ability to address Tilt/Shift photography by using the Tilt and Shift option with their existing Hasselblad DSLR system."

Exploring and explaining signature features, along with the accompanying benefits, to customers is key to making the sale, says John Knaur, senior marketing manager for DSLRs at Olympus Imaging America. "Photo specialty dealers often use key benefits, along with unique features to sell DSLRs," he says. "For example, the Olympus E-3 features a splashproof and dustproof design to make it easier to take pictures in all environments. The E-420 and E-520 feature Autofocus Live View with Face Detection. The E-3 and E-520 feature built-in image stabilization, so all the lenses are stabilized with these cameras and not just a few." Retailers can talk up all these features, and more, says Knaur.  

While the Leica M8.2 is not an SLR, its interchangeable-lens system ensures that it maintains the advantages of an SLR format in a more compact design, says Christian Erhardt, director of marketing, photographic division, for Leica. "Leica's M-System cameras, lenses, and accessories [then] provide unique selling features that can't be found in mass-market brands," he explains. "Therefore, Leica's unique selling features, such as German craftsmanship and world-renowned optical design, guarantee a long-lasting value and stable price." All benefits that would behoove a consumer to make the leap of faith and reach into his or her wallet.

What sets a DSLR apart from other types of digital cameras is also important to tap into. "The unique proposition of the DSLR and interchangeable-lens cameras is key to sales and would not appeal to the ultra-zoom customer," adds Knaur. "DSLR customers value the ability to change lenses and the variety of focal-length designs, from ultra wide to ultra telephoto."

Accessorize and Educate!

Besides knowing the product you sell inside and out (an invaluable factor to your customers), knowing what add-ons your customers need is critical as well. After all, you're not just hawking a simple P&S: a DSLR system is decidedly more complex, with a list of possible accessories: lenses, camera bags, filters, memory cards, tripods, digital photo printers and photo paper, lighting systems, and so forth.

In fact, camera accessories saw the best growth in 2007, with a 37 percent jump in revenue, up from 26 percent in 2006. According to NPD's November 2007 "Digital Camera Market Basket Study," 63 percent of DSLR buyers indicated that they would like accessories bundled in with their camera purchases, opening the door for retailers to uphold the value of digital camera sales.

Digital picture frames is one category in particular that has grown perhaps partly because of the emerging DSLR market. In 2007, digital picture frame unit sales rose 361 percent and revenue increased 314 percent. While frames are largely gifted items, the NPD study revealed that DSLR owners were more likely to use digital picture frames, with 14 percent using them to view their photos versus 9 percent of point-and-shoot camera owners. 

Retailers may still be missing the boat when it comes to advocating for add-ons. According to NPD's "What's in the Digital Shopping Basket" study, which took a look last year at the Canadian digital camera market, more than 50 percent of DSLR buyers left the photo retailer without purchasing anything beyond what was included in the initial purchase price of their new camera. Twenty-seven percent of those DSLR buyers returned later to the same store for aftermarket accessories--yet 50 percent of the DSLR buyers said they made a camera accessory purchase in the months after their initial camera purchase, meaning they didn't return to the original retailer from which they purchased the DSLR.

Holding workshops and seminars is one great way to teach your customers how to use their camera and to subtly introduce accessories that may go along with their new DSLRs--creating an instant repeat-customer base. "Retailers can become partners in selling high-end digital equipment and have the opportunity to provide first-class service for consumers, all the while test-driving equipment and customizing workshops worthy of the Leica brand," says Erhardt.

Olympus offers its Live Drive program, and many of the company's dealers also offer a rental program, according to Knaur. "Live Drive allows customers to use E-System DSLRs for a period of time (dealer designated), so that they know what the cameras are like before purchase," he explains.

In the end, retailers just need to get these high-end camera systems into the hands of consumers. "Educational seminars and hands-on open houses are a great way to allow consumers to get hands-on [experience with] these systems," says Duhaime. "Hasselblad works with their resellers to conduct these types of events on a regular basis. The best way for someone selling a high-end DSLR is to put the system in a customer's hands. When a photographer has the opportunity to handle the camera, he or she truly appreciates the engineering and image quality associated with the...brand."