November 16, 2010: Ted’s Cameras has responded to the low print pricing of its large national chain competitors – and in particular Harvey Norman’s current 9 cents/9days promotion – by offering 6×4-inch prints at 8 cents for 10 days, commencing yesterday, Monday November 15.
This marks a fundamental change in marketing strategy for Ted’s Cameras. News of the Harvey’s promotion (reported exclusively in Photo Counter last week) coincided with a Ted’s board meeting at which the issue of cheap prints and their consequences was being discussed. A decision was made to respond directly and immediately.
‘We are sick of seeing our customers stolen away. For two years we’ve been seeing foot traffic decline, volumes decline, margins decline and our customers go to Harveys, so yes, we think this is an appropriate response,’ said Jason Robertson, sales and marketing manager, Photofinishing and Online, Ted’s Cameras.
He said the timing of the Harvey promotion, close up to the critical pre-Christmas season, was a particular concern as it could see customers making camera and accessory purchases at the box mover while taking advantage of cheap prints.
Robertson said Ted’s effectively had little more than 24 hours to organise marketing and logistics for the promotion, and acknowledged Ted’s store staff and management and supplier HP for their willingness to respond so quickly.
He explained that staff have been coming in at 6am to facilitate an already-scheduled upgrade of HP kiosk software.
Anticipating criticisms that Ted’s is further devaluing one of photo retailing’s staple products, Robertson said the damage to the 6×4 print category ‘happened two years ago’ and it was now a matter of minimising the damage to the business as a whole.
He said there had been reports from Ted’s staff today of some Harvey Norman stores near Ted’s outlets dropping to seven or eight cents, and unconfirmed reports Harvey’s radio advertising was now quoting an 8 cent price.
‘We seem to have ruffled some feathers,’ he observed.
Robertson conceded that there was no margin in 8 cent prints and that Ted’s would be lucky to break even directly on 6x4s, but hoped to see a measurable lift in sales of other hardware and services over the 10 days.
He pointed to an analysis by Stuart Holmes from IPS (see Readers Comments here) of the real cost of producing a 6×4 print, saying he felt it was ‘very accurate’. (Holmes puts the break-even cost at closer to 20 cents than nine or 10 cents.)
The Ted’s promotion will be supported by radio and press advertising, with ads booked for an existing Nikon promotion enlarged to incorporate the 8 cent print message. The large Ted’s customer database were notified via email last night.