December 15, 2010: Gold Coast-based online photo equipment retailer CamerasDirect will open a bricks and mortar outlet early in January.
The 600 square metre property, previously a Clive Anthony outlet, comprises a warehouse, office space and a retail store. The store is located in Harbour Town, a discount bulky goods shopping precinct in the Gold Coast.
CamerasDirect is an interesting hybrid: established in 2003, it brings in some brands such as Nikon, Sony and Canon from Asia as a parallel importer, while sourcing other brands such as Apple (an authorised Mac reseller), Sanyo, Ricoh and GE through local suppliers. While it’s regarded with hostility by some competing retailers, it serves as a supplier to others.
The imported cameras and lenses, particularly Nikon and Canon, are where CamerasDirect has a clear price advantage over retailers sourcing product from the authorised supplier, even though it carries added overheads such as provision of its own warranty infrastructure.
While this appears to support the case that camera prices from some suppliers in Australia are too high, CamerasDirect chief information officer, David Richardson, says the business works on slim margins.
‘We have smaller margins than traditional retailers are accustomed to,’ he said – while acknowledging higher margins are necessary in most physical stores, when there’s limited potential to expand the volume of sales.
He bristled at the ‘myth’ that CamerasDirect had lower overheads than competitors, pointing to its warranty structure, warehousing, employing expert staff, building a sophisticated online retailing system and marketing as significant costs.
And now it moves takes on the added overhead of a physical retail outlet.
‘The trend to multi-channel seems to be the natural evolution of pure play retailing,’ explained Richardson.
He said this was what was now happening in the US and Europe. In Australia, online competitor Digital Camera Warehouse (which does not parallel import) also has retail outlets – in Melbourne, Sydney and Brisbane.
‘You gain a larger slice of sales if you have some doors open, and you can help more people with their picture-taking,’ said Richardson.
He said that prices in the store will be the same as those offered online.
Richardson explained that the new store will ‘not have a traditional retail shop feel’ but rather be like ‘stepping into an online retail store.’ Customers will be able to browse the range on a bank of PCs in store. Products in the store are largely for demonstration, with a door direct into the warehouse where orders will be picked and packed in five minutes.
‘It’s not so much grab and go off the shelf,’ said Richardson. ‘To stay true to our roots.’
There’s a studio attached to the showroom for customer tutorials.
Richardson said that in sales terms, CamerasDirect was down a bit in 2010 but had done very well, given that spending in 2009 had been boosted by the economic stimulus package.
‘We now look back on our figures and realise how much we benefitted from the economic stimulus in 2009,’ he said.
The retailer has recently launched a new website (and logo), and Richardson said online traffic has skyrocketed.
He attributed the increased traffic to user reviews and an ‘ask & answer’ feature where potential customers can ask questions about the product, with responses coming from CamerasDirect staff and other customers.
He said that in one week alone around 400 reviews were posted by customers.
‘Products with reviews convert better than those without,’ he noted.