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Digital Allows Retailers to Focus More on Customers

Digital technology has changed the face of all forms of media, including photography. Music, movies, and photography businesses have all been impacted by new, inexpensive distribution models and products.At a recent luncheon meeting of the PhotoImaging Manufacturers and Distributors Association (PMDA) in New York, N.Y., a four-person panelexplored the changing nature of the retail printing business in light of this.

Greg Kearnan, HP Co., Palo Alto, Calif., opened with a look at theanalog film business, noting past predictions of a long, slow decline in film never made sense to him. As soon as customers went digital,they never went back to film. "Why aren't they printing more?" he asked. "They don't want to.

"Back in the day of retail photofinishing, people would bring filmin; and the retailer's role was to convert it to negatives, and thenconvert it to prints. They would shoot 24, they printed 48, but onlywanted 10," Kearnan explained. "Today, if they want it, they print it."

Kearnan, who is director of Sales, Retail Photo Solutions at HP, drew an analogy to the traditional music industry, which is under assault from digital music. CD sales have dropped precipitously in the past few years because, in many cases, consumers prefer a few choice cuts from an album rather than purchasing the entire CD. He cited a Times Online article describing the problems.

"Why is it a problem for consumers to buy only what they want?" heasked. "Where it gets emotional is the people who make CDs won't be involved."

The key for the photo industry going forward, he said, is to create a new market by providing innovative products. "Go back to what consumers want and what they experience," said Kearnan, challenging the crowd to go from a manufacturing mindset to one driven by the customer's experience. "If we want them to print more, we have to give them more exciting products to make."

The retailer's perspective on the panel was provided by Mike Woodland, CEO and co-owner of Dan's Camera City, Allentown, Pa. Woodland noted, at the peek of film processing, Dan's Camera was printing and processing 5,000 rolls per week; now, the specialty retailer is down to 15 percent of that. More disturbing, however, to Woodland was the decrease in film traffic also decreased the amount of contact salespeople had with consumers. "This reduced our opportunity to interact with the consumer's images," he explained, depriving the retailer of up-selling opportunities.

Woodland noted, to compete in today's multiple-product environment, the retailer has a wider variety of equipment needs, including silver-halide, toner-based, wide-format inkjet, and high-speed instant printers. In Dan's case, the store has three wet labs, five inkjet printers, two toner-based printers, and a new instant printer.

The response by Dan's Camera City to these industry challenges wasto listen to consumers and to expand the selection of imaging products. Dan's Camera also emphasizes the experience within the store, as well as communicating with new parents. The successes in this new erafor Dan's Camera include gallery wrap canvas, collage posters, instant prints, plain paper proof books, plain paper postcards, plain paper business products, and digitizing existing photos.

Bing Liem, senior vice president, Sales, Fujifilm U.S.A. Inc., Valhalla, N.Y., noted retail solutions will be most appealing to consumers: "At the end of the day, the soccer mom will make her way back to the retail store."

A major difference between the digital and the analog ages, according to Liem, is the consumer has gained control of the image, and sheis

driven by time and by convenience. The seemingly limitless applications are creating confusion. "Our traditional business has been in freefall," said Liem.

To compete, retailers are being far more selective in their equipment choices, due to the uncertain return on investment of digital products and services, along with the need for the retailer to manage a complex array of input and output devices. Liem advised retailers to unify their customer interface, not only for the sake of consumers, but to minimize lab and associate training. He recommended choosing vendors with open systems, so the addition of new output devices is simple.

Brad Kruchten, general manager, Retail Printing, Eastman Kodak Co., Rochester, N.Y., recommended advertising the tangible benefits of prints; in tests run by Kodak, he reported print rates increased 20 percent in markets where printing benefits, not price, were emphasized.

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