So here was Snapfish serving online; District fulfilling Snapfish and Kodak requirements as a wholesaler; District still toying with its own on-site. Seems as though all bases were covered in this business plan.
Imagine my surprise when I received a publicity release in August saying that Snapfish was opening a retail one-hour store in Alexandria, VA. What was that all about? An online service expanding into brick and mortar? I thought these segments were competitors.
Couldn't let that pass.
I connected with Raj Kapoor who put the pieces together for me. The new Snapfish store was formerly one of District's Snap Shops that changed its name and re-fitted itself to incorporate Snapfish online services at retail. All in the family.
Was this the beginning of a new District-Snapfish master plan? A chain of retail Snapfish stores?
The emphatic answer from Raj: "No." The purpose is to use the location as an experimental lab for Snapfish so that it can better understand the relationship between the customer, the retailer and the use of online services.
Why the effort? The plan, according to Raj, is to better educate itself so that it can develop programs to present to mass retailers who are interested in having their own online service to offer their digi-shooters. Snapfish wants to be, not only an online service under its own name, but to offer its expertise and infrastructure, via District, to other retailers to use under their own brand names.
"We want to be the online provider and offer a complete retail solution," Raj said. "Our target is the chain retailer where it's all about volume." He indicated discussions were ongoing with some accounts but would not identify any at this point.
Are there any plans to develop programs for an independent lab to become part of the District-Snapfish program? While Raj and Al Steinman give lip service to this possibility, I don't foresee it anytime soon.
Al said the online activity has become very significant for District whose prime business is still mail order. He looks at online as simply a replacement for the mail order envelope.
"There may be some tens of thousands of kiosks placed at retail," Al said, but for online "there is a kiosk in every home." "People don't have to stand in line. At home, they can relax."Snapfish signage has been used to brand what used to be a District Photo store.
Al said that the number of prints per online order are building up steadily and now exceed the 24-prints that we used to see in a typical roll of film. He expects that upward trend to continue.
What about pricing online? I check the Big Three onliners and find pricing as low as 15-cents a print on special promotion, though it seems that a price of about 20-22 cents, give or take, is where it's at. At retail the price leader seems to be Wal-Mart at about 24-cents. Costco may be down to 22-cents. How low can it go, Al? "The bottom line is, no one knows. If we can take out cost and produce a print for less, the consumer will benefit."
I was somewhat intrigued by the thought of a retail lab that
combined online services with on-site services. I made a trip to
Alexandria and met with Sharon Skinner, retail operations for Snap
Shops, a 25-year veteran with District, and Kim Morgan, the store
manager, to take a look.
The store is located in a busy, rather large outdoor mall on a major highway. District opened here 35 years ago as a traditional camera store and it has morphed along the way to emphasize on-site processing and allied products like albums, frames, film, etc. Now it's an online store, as well. It's a skinny 2,100 sq. ft. location with a 16-ft front. The new outdoor sign reads: Snapfish. A large Rite-Aid is just next door. "No competition for us," Sharon said.