When I opened my eight labs in New Jersey beginning in 1981, seven were equipped with Noritsu QSS-II systems designed to output only 3-inch prints. The eighth store, purchased from a previous owner, had a Copal 104, a unit that only delivered 4-inch prints. The 4x6 was somewhat of an oddity in those days, and if a customer in any of the other seven stores wanted a 4x6 order, we shipped it in our van that made daily rounds. The customer had to wait a day.
The thought of having a minilab machine capable of taking multiple paper magazines and the flexibility of outputting different sizes up to 12x18 was unheard of. You picked your one paper-width size and were stuck with it as long as you owned the machine.
By the early 1990’s, the 4-inch print was it. For the next decade it was the fuel that drove photofinishing. If a photo specialist was selling a .24-print roll for $10, his revenue was .41-cents a print, including developing. Gross margin (and it wasn’t so gross) was in the 75%–80% range if the cost for paper and chemicals averaged about .8-cents.
Today the industry is faced with some not-so-fun conditions: roll d&p is in a precipitous fall; costs for paper and chemicals are going up (in June, Fuji announced increases: paper, 6%–8%, chemicals, 10%–22%); retail prices for 4x6 prints are dropping to .11-cents at Sam’s Club, .15- to .19-cents at Wal-Mart and CVS, and .17-cents at Costco. Except for the more aggressive photo specialists, the usual price is about .29-cents at most of these locations.
Though the 4x6 is still the dominant format, margins, dollar profits, and volume have long since faded into the past—along with thousands of photo specialists that continued to see the 4x6 print business as the holy grail. It once was. Not anymore.
The saga of the 4x6 print is part of a strong PowerPoint presentation designed by Steve Giordano, Sr., chairman and CEO of Lucidiom, Inc., Vienna, VA, who paints the picture that focusing on 4x6 output is not the future for a photo specialist and that the salvation of the dealer is to steer to higher margin services (specifically, products from a Lucidiom kiosk). He shows that in 2003 there were 14 “beyond 4x6 products offered by Lucidiom’s APM” (Automated Photo Machine) compared to 97 products in 2006.
We know the products: templates, borders, greetings cards, package prints, and on and on. Steve doesn’t see the 4x6 print going away. He just makes the case that the profits for them aren’t there anymore.
Lucidiom’s Now in The Major Leagues
Lucidiom has become a major player in the photo kiosk segment, claiming about 25,000 kiosk systems in the U.S. (40,000 worldwide) using its software. Some of these are Lucidiom model kiosks while others involve Lucidiom software installed in kiosks branded by others, such as Fuji, Noritsu, etc. Only Kodak, with about 35,000 kiosks in the U.S., would beat that number of installs.
Steve has been a force in the kiosk movement, supplying hardware and software to many of the industry’s major players. Its biggest coup to date, according to Steve, is capturing the Walgreens account, a deal that was inked at PMA earlier this year. Walgreens’ plan is to have Lucidiom photo kiosk software in every location, with some stores having multiple sites. Having one kiosk software package offering similar output products chain-wide, Walgreens will be able to promote its services nationally.
Last fall, Lucidiom signed up the Ritz chain and also supplies software to Rite Aid and Brooks-Eckerd, among others. According to Photofinishing News, Lucidiom developed the software for the HP Studio, a system that is just being deployed, though Steve would only give a “no comment” to that.
With its software program well-established and growing, Steve and his crew decided to put the Lucidiom toe into new waters: photo scrapbooking. Here, they felt, was an opportunity to break new ground with a concept that is as old as hot dogs and apple pie, and has its devotees spending billions of dollars in papers, tools, embellishments, glues, trimmings, and the like.
The photo industry for the last five years has been invaded by the electronics industry with considerable success. Here was an opportunity for photo to turn the tables with an invasion of its own into the established scrapbooking trade, long dominated by such arts-and-crafts chains as Michaels (800 stores), Aaron Bros. (158 stores and owned by Michaels), and A.C. Moore (100 stores), plus numerous independents. PMA saw this potential by incorporating into its association the Professional Scrapbook Retailers Organization (PSRO), which is now operating as a section of PMA, not unlike DIMA.
What is Lucidiom bringing to the business of photo scrapbooking? Every digital minilab offers to print pages with a wide selection of decorative borders and layouts. However, only the lab’s operator knows of the templates, and there is no practical way to share the border experience with a customer on the other side of the counter. Some kiosks also have border templates, but these kiosks are designed basically to upload images to make prints—not album pages. Only the most ingenious customer can be creative with the standard kiosk software.
Lucidiom chose to start from scratch with scrapbooking software rather than incorporating it within its APM kiosk software. To begin with, Steve Giordano recognized that the best way to understand the needs of the scrapbooker was to hire a scrapbooker. In October, Kesley Anderson was hired as vice president, scrapbook and craft business development. Kesley is a professional scrapbooker, having run her own retail business in Virginia, and serves as a member of the aforementioned PSRO at PMA.