Magazine Article


2005 Digital Minilab Supplier Roundtable

“With leasing, you can customize a program to address your needs and requirements regarding cash flow, budget, transaction structure and cyclical fluctuations,” says AgfaPhoto’s Maurer.
“There are still some major retailers who are planning to deploy digital labs, either as replacements of analog systems or through expansion in the next year,” says Fujifilm’s Curley.
“The key is to make digital printing both easy to use and accessible for consumers,” says Kodak’s Silva.

Maurer: AgfaPhoto is committed to more than just providing state-of-the art technology. AgfaPhoto is also an important business resource, and plays an instrumental role in furnishing its customers with business building tools to assist them in communicating their value propositions and establishing their identity a “digital destination”. Resources AgfaPhoto provides include advertising and public relations templates, community involvement suggestions, and business planning calendars for the scheduling of a variety of on-going promotions. AgfaPhoto also provides point-of-purchase signage and an array of suggested in-store merchandising and seasonal promotion ideas, all geared to help the retail partner succeed.

Curley: Fujifilm is helping support retailers by connecting them right to consumers at home or work via our distributed fulfillment solution – Get the Picture Online Service. This Internet based photofinishing network enables consumers to order low cost, high quality archival prints from their home or work PC. Orders input via a web page or browser application are routed through a central network and printed at the retailers location based on zip code proximity or other criteria.

Sliva: We are providing tools and financial models to help retailers look at the output business several years into the future. This way our partners can invest in the right solutions for their consumers and their economic model.

Kazuta: The Noritsu America Corporation website has been completely redesigned to provide streamlined access to information about Noritsu products and services. A special area of the website has been created for photo specialty customers in order to provide a variety of useful business-building resources. Features include: a marketing tips library, a customer bulletin board, technical support knowledge base, digital POP materials and free photo templates from PhotoTidings and Playhouse Publishing. The new website will allow Noritsu to better respond to the needs of our photo specialty customers by providing resources and materials to help them succeed in today’s photofinishing market.

Is leasing playing a role?

Tereshkow: Leasing is an important issue for retailers looking to establish themselves in the kiosk business. Konica Minolta has a separate leasing arm that is there to assist our customers with their financing needs. We can construct just about any program as long as it makes economic sense. For example, if a retailer needs a payment stream to fit the seasonality of the business we can do that.

Maurer: Imaging retailers choose to lease equipment for a variety of reasons. Flexibility and convenience are two of the benefits most frequently cited about leasing. As a business grows and needs change, leasing allows you to add or upgrade equipment. After all, you rely on equipment and technology every day to operate and grow your business, but the value of those products comes from using them, not owning them. By leasing, the uncertainties and risks of equipment ownership are transferred to the leasing company, which allows the retailer to concentrate on using that equipment as a productive part of their business.

Curley: Lab owners are asking for financing choices that include leases at low percentage rates or even zero percent. We continue to listen to our customer needs and do provide excellent competitive leasing arrangements .

Sliva: Leasing is one of a number of financial options that retailers have and will continue to leverage allowing them to implement their own equipment and service strategies. However, the most important point is to develop a financially viable equation to match the right capacity and capital investment with the projected demand and profit pool for each store.

What is the biggest challenge for this product category in 2006?

Tereshkow: The biggest challenge for the product category in 2006 is education. The consumer still does not relate printing services at retail to digital cameras. Granted, this is changing but we need to do a better job. As many consumers are starting to upgrade their digital cameras we will have another opportunity to drive this point home.

Maurer: The “digital challenge” is also a “digital opportunity.” Although retail digital photofinishing has gained in popularity over the past few years, the battle for which digital printing solution will win the most market share is still being fought. Whether it’s print at retail, at home or through an online provider is yet to be determined. As such, retailers have the opportunity and challenge of shaping consumer attitudes and behavior. By giving consumers a good reason to take their digital images to retail stores--for printing, manipulating, and more--the retail industry can retain much of this high-margin category responsible for more than two billion store visits per year. With the new-generation digital technology platforms, retailers are now well-positioned to generate a strong revenue stream, keep overhead low and margins healthy, and grow their market share in the fast-changing photofinishing marketplace.

Curley: Although the imaging industry continues to grow, the changing market dynamics make it more challenging to stay in front. Technology moves at a faster pace each year, so innovation becomes more important. For major suppliers, it’s about finding new markets to offer photofinishing services. Fujifilm understands the pressure retailers face, particularly as lower retail print prices are forcing them to lower their costs as much as possible. We are 100% dedicated to offering our retail partners the most flexible solutions that provide them with a low TCO and high ROI.

Sliva: The industry faces the implications of massive overcapacity as volumes decline.

Kazuta: In spite of the many advances in the industry, technology alone is not the sole factor for success. Photofinishers must focus on their core strengths and develop the differentiating factors that separate them from their competition. Ultimately, sustainable profitability in today’s imaging industry means leveraging technology to build deep and ongoing relationships with customers.