Supermarket Chain Tests Shoebox Market
Wegmans is a 71-store, privately-owner supermarket chain in the Northeast doing an estimated $3 billion+ in sales. I recall the early 1980’s when they decided that minilabs could work in a supermarket environment and were the first of its genre to create an in-store processing department with Noritsu QSS-II machines. No doubt the foresight of Robert Wegman, who died in April at the age of 85.
Since Wegmans is headquartered in Rochester it should have come as no surprise to me when Ben Rand, the intrepid business writer for the Rochester Democrat and Chronicle who covers all-things Kodak, reported that Wegmans was testing the Kodak i660, high-speed scanner at two of its stores.
Jeff Holdsworth, photo category merchant for Wegmans, said that Kodak i660’s were installed last November in two area stores: Lata Road and Pennfield.
How are things going so far in the test, Jeff? “In general the test has been a tremendous success. It takes time for our customers to understand what the service is all about. But, the awareness is starting to take hold.”
Wegmans is a huge user of newspaper and direct mail advertising. However, it’s difficult for a chain to highlight a service that is only available in two of its locations. Jeff has had to rely on email, direct mail, word of mouth and in-store demonstrations to get the shoebox story to the customer.
The Kodak scanner is placed in the front of the Wegmans’ photo department where it can be seen by all the folks walking by. If there are no new orders to be done, Jeff said the staff will keep scanning old prints to attract consumer interest. He said customers can watch the scanning take place and since it goes so fast at 150 scans per minute he is not concerned with privacy of the images.
(Minilab old-timers will recall that the earliest minilab installations were often placed right in the front window of the lab, where the prints coming from the dryer could be seen by amazed passers-by. It must have been a technique taken from the early days of television when appliance stores would leave TV sets on all night in their window displays to attract customers to the wonders of television—and their store. Unfortunately, the prints coming from the dryer were too often ‘R’ rated—and of neighbors, no less.)
Jeff has set up what he refers to as ‘bundled’ pricing: $19.99 for up to 40 print scans with the customer getting the scanned images on a CD and a 4x6 index print with up to 40 thumbnails; $49.99 for up to 500 prints on a CD with 13 index prints bound in a leather binder; $99.99, for up to 1,500 prints, CDs, index and binder; $199.99, for up to 4,000 images.
The largest single order so far: 11,000 prints. While Jeff would not reveal the actual number of shoebox orders being processed, he did acknowledge that each location has been doing multiple orders.
Jeff said that he has found that there are two classes of shoebox customers. The first is the true archiver whose goal is to transfer a large number of family prints onto CD to not only preserve them for the future but to make prints available to geographically expanding families that want to have keepsakes of their own. The other category is the customer looking to create photo scrapbooks for special anniversary or party events.
“We have to develop ways to market to both classes of customer,” according to Jeff.
At present, there is no schedule to end the test. “Time will tell.”
Jeff said that the litmus test of consumer interest has been passed. It would next be a matter of testing the financial viability of a shoebox program before expanding the idea. “There is no decision yet,” he said.
More Than One Option To Choose From
Kodak is not the only shoebox game in town.
Last month I wrote about the fact that Walgreens was test marketing a shoebox plan in five different marketplaces. I reported on the Detroit market then, but have since learned that the San Antonio area is another of the test sites. Walgreens is using the Pixel Magic Nextlab 120, a scanning/CD output system that was essentially brought into the chain in older, optically equipped stores to give those stores some digital capability. I understand Walgreens has over 1,000 of the Nextlabs though only in their test markets is the shoebox plan being promoted.
The 120 doesn’t have the speed of the Kodak i660, scanning 24 prints in a little over 2 min compared to Kodak’s 150/min. Then again, it doesn’t carry the large $60,000 price tag, either, selling for between $2,300 - $4,300, depending on configuration.