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The State of the Imaging Industry 2004



The bottom line is a lack of profitability for retailers and most camera manufacturers. The suppliers are pushing for market share to the detriment of their own corporate profits. The process challenges the very survival of the retail channel.

One only has to look at the computer business today. Count on one finger (Dell) the total number of name brand computer vendors that are making money selling home computers. Oh yes, there are successful component and subcontract manufacturers. But the retail channel for computer units is dysfunctional.

The second challenge facing the photo industry has been well discussed. Customers are excited about acquiring digital cameras. Yet they have been slow to print hard copy images of their digital pictures. Retailers who have profited for over 20 years from minilab gross margins are suffering. Sales volumes of digital printing have not replaced the erosion in the film processing business. The good news is that many aggressive retail marketers are reporting success stories as they convert their customers to digital printing.

The frustration and challenge is that hard goods vendors are squeezing margins at a time when retailers most urgently need profit dollars. Retailers are expending enormous energy to grow printing at retail. But the drop in photofinishing profits combined with vendor margin shrink on digital cameras creates a very challenging environment for specialty and mass retailers alike. In addition, the combination of world events, political, military and economic all hurt retail.

Retailers need to be realistic in evaluating their operations. They need to be competitive and market aggressively because traffic is the lifeblood of retail success. They need to control costs by like never before. Only the smart and aggressive retailer will be around to have terrific profits when the environment turns more positive. Suppliers must recognize that their success depends on having multiple channels of product distribution. When any vendor comes to rely on a hand full of customers to dominate retail sales, the supplier loses profit and pricing influence. Retailers and suppliers must work more closely than ever if both sides are to remain successful.


IPI
Photo Imagers Are Not Quitters
by Brent Bowyer
President and CEO, Independent Photo Imagers Many reporting in on this topic have far greater resources then does IPI to really measure the state of the industry in units moved through the various channels of wholesale and retail distribution, in dollars and cents expended and earned on the daily growing number of industry SKUs and in margins being earned and required to maintain operations as going concerns. Many more can also report on the newest technologies and advancements that will provide presently unknown opportunities, new revenue streams and bottom line profitability for future investment.

I can report on the state of the industry resulting from the utilization of my time visiting with IPI members at their front counters, reading and responding to their emails and talking to them on the telephone. Most would refer to this as grass roots communication and here is my report.

I have found that disruptive technology is playing havoc with some members. Also, I have learned that IPI member's customers are in many cases still unaware and uneducated as to the necessity to print and how to print. And finally I have gained knowledge that members are looking for an exit to stop and fill their gas tanks for the remainder of the trip.

Those findings and the knowledge of the state of our members is important. But just as important is the knowledge and findings that our members are not quitters and our most valuable resource, member networking, idea exchanging, member programs and offerings, and manufacturer/vendor assistance is in full swing and providing the resources necessary for members to grow and prosper.

IPI members have the resources to top off their gas tanks with programs like the Certified Digital Photo Processing industry wide initiative and its consumer component, Pictures Matter. They can spread the word at a grass roots level with our digital camera usage power point presentation available to all members for community and social club and educational venue presentations. They can participate in the very best programs available from industry manufacturers and vendors that are very vital and rich in "resources." And finally they can assist one another and ensure no one is left behind.

So from my perspective and with my limited resources as compared to most in the industry, the state of the industry indicates that IPI members are doing just what IPI members have always done to meet new challenges and provide opportunities for one another and to one another with the assistance of industry manufacturers and vendors for which they are very grateful.


PMAI
A Challenging State For the Industry

by Gary Pageau
Group Executive, Content Development and Strategic Initiatives, Photo Marketing Association International As interest in digital photography continues to grow, the photo/imaging industry is poised to benefit during the upcoming holiday selling season. In particular, as more and more everyday families embrace digital photography, there are many opportunities to provide them with products and services. Whether snapping pictures with digital or silver-halide cameras, and printing at home, online or in stores, consumers have many choices. And, most recently, those gift choices have expanded into custom framing and scrapbooking.

As an industry, we must continue to remind consumers the logical outcome of a digital camera image is a print. Recent PMA Marketing Research shows, as film prints decline and digital prints increase, there is great potential in the number of pictures taken, but not printed. In 2004, PMA estimates, out of the 29 billion prints to be made in the United States, there will be an additional 8.8 billion images taken, but not printed.

PMA and other industry groups will be working together this holiday season to remind consumers that pictures aren't memories until they are printed. PMA has launched the consumer photography site, "Prints are Memories" (www.printsarememories.com), to encourage snapshooters to print. The site even has a directory—now with more than 21,000 locations worldwide—where consumers can find a retailer who makes digital prints. Also, the successful PMA Admaker program will be updated with new and compelling content to reach this growing segment.


   







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