Magazine Article


PTN's 2008 State of the Industry
Industry leaders offer their perspective on how the photo industry is doing, and where it's going.

"Consumers are becoming more comfortable with creating, manipulating, and handling digital images but have yet to realize the possibilities from the advances in output technology," says Bing Liem, VP, sales, Imaging Division, Fujifilm U.S.A., Inc. "We have only just begun to realize growth opportunities from custom photo products--yet technologies developed for graphics and commercial printing are now converging with the traditional photofinishing experience. An environment is emerging for imaging labs to establish themselves as the broader output destination--a 'community print center.'"

Local businesses, schools, and associations throughout your communities have imaging and printing needs outside of photographs. Diversification into wide-format and graphics offer new opportunities for growth. "It's an opportunity for a photo lab that has earned community trust by creating tangible printed memories from a digital image to open new doors in the community beyond the photobook, greeting card, or calendar to provide other digitally printed products," suggests Liem.

"Manufacturers will continue favoring larger retailers despite the long-term damage to manufacturers' bottom lines," explains Bill McCurry, principal, McCurry Associates. "Virtually all credit-worthy surviving specialty stores will join IPI (for labs/printers) and/or PRO (for camera/hardware sales) to narrow the cost-pricing spread between big boxes and independent retailers (regardless of size). The outstanding information exchange these organizations offer members will be secondary to efficiencies and resulting reduced costs.

"Retailers will have to shift their brands based on changing profit opportunities," continues McCurry. "Vendors' constantly varying margin opportunities will see surviving retailers continually shifting manufacturer allegiances. Manufacturers' lack of profit loyalty is eroding retailers' brand loyalty. It's gross margin that pays the bills, and retailers must make margin where they can. Successful retailers must take control of their own margins, remain relevant to their customers, and stay flexible to seize the myriad opportunities digital offers to us."

The Greening of the Planet

"Going green may well be the biggest challenge facing our industry, and indeed the entire world, today, so I find it particularly inspiring that 'Going Green/Sustainability' is an integral part of this year's State of the Industry Report," says Mark Roth, president, Argraph. "All of us in the photo/imaging industry are de facto environmentalists. The industry-wide evolution from traditional to digital imaging has resulted in substantial environmental benefits. Just think of all that paper and all those chemicals that are no longer being used and discarded. The benefits of environmentally conscious changes are both immediate and long-term, helping both the world and the bottom line."

"The recent green movement has greatly affected the retail photo market, as retailers, like many businesses today, are looking for new ways to implement sustainable processes to deliver environmentally responsible products and services," says Kalle Marsal, director of marketing and product management, retail photo solutions, Imaging and Printing Group, HP.

Marsal adds, "Today, retailers have the ability to replace traditional silver-halide photo labs with digital, dry solutions, allowing them to consume less energy, reduce the chemical and water waste associated with traditional photo processing, and use supplies that can be easily recycled through programs like HP Planet Partners."

Consumers don't mind paying a little more when they feel they're helping the environment. Leica's director of marketing, Christian Erhardt, explains, "Although price point rises, it is essential that all parties involved do their part to help the environment in their own way."

Ted Fox, executive director of PMA, says, "The current 'green' sentiment sweeping the culture can be favorable to our businesses. Consumers [no longer] have to pay for unwanted prints, which keeps [them] out of landfills. Also, while not completely free of environmental concerns, today's 'dry labs' offer a good solution for those labs concerned about water usage and environmental discharges. Even online ordering--including convenient in-store pick-up of prints and photobooks--can reduce needless car trips."

Gifting Opportunities

Noritsu's Tuccillo explains, "Retailers have a unique opportunity to connect with their customers on-site and through their websites. In-store merchandising should also remind customers about available photo products such as greeting cards and calendars on an ongoing basis. Seasonal holidays and events...represent excellent opportunities to position photos as either gifts or greeting cards. The objective is to promote the category throughout the year."

"Digital photography remains the best vehicle for unleashing the creative face of consumers," says Julie Swink, executive VP, sales, Liberty Photo Products. "Their unstoppable appetite for new, fast, and easy ways to share their images and express themselves is demanding suppliers and distributors stay on the cutting edge. With consumers actively pursuing imaginative solutions to personalize the world around them, distributors will increase customer loyalty and experience higher margin potential by offering a variety of unique products and innovative real-time solutions.

"Moving beyond simply pushing products to focusing on empowering your customers to quickly initiate solutions for sharing their valuable images will leave your customers feeling ahead of the curve," Swink adds. "It's the 'wow factor' that keeps consumers coming back hungry for more creative ways to easily express their lifestyle through images on finished products."

"Photo retailers are stabilizing and getting the hang of what capabilities are possible using existing equipment and/or adding equipment that requires a small investment," adds Korosh Delnawaz, president and CTO, Whitech USA. "The great news is that at the same time, the wholesale side of the industry has been gearing up to meet retailer's needs for a broader range of products and increased volumes. This strengthens the industry as a whole. Now retailers can comfortably offer a wider range of products without having to make major equipment investments to produce them in-store--excellent news for retailers in difficult economic times who are looking to have a great holiday season."

Showing Your Strength

"Dealers should keep in mind that consumers are not driven by price alone," says SanDisk's Liebmann. "The majority are seeking the expertise that only a photo retailer can offer. As cameras become increasingly technical, photo dealers need to take on a role as a consultant. Professional photographers base purchases on brand trust. Know your vendors well and recognize the ones that have a track record for sustained dependability."

"Digital technology has increased the efficiency in which consumers and business communicate," adds PMA's Fox. "Consumers have more options than ever to quickly and easily share their precious moments and to preserve them for future generations. It's up to the photo specialty retailer match the right choice with the right consumer. Now, more than ever, knowing the customer is vital."

"Photo dealers can retain customers and grow their business by fully understanding and sharing their knowledge of the products," says Mark Leathem, director of corporate marketing and business development, Kingston Technology. "Good photo dealers should familiarize themselves with the 'consumer's infrastructure,' i.e., the capture device (be it a P&S, DSLR, or video camcorder), card reader, computer system, and how the consumer intends to use the card. A dealer should listen and then sell the card that fits the customer's needs, not upsell them to get a larger purchase.