Focus on margins, says HP exec

June 23, 2010: Australia is a strategically critical market for HP in the worldwide roll-out of its Retail Publishing business, according to worldwide marketing manager, HP Retail Publishing Solutions, Alex Liff.

Liff  was in Australia for the Digital Life Expo in Melbourne. Among its new offerings on display at the Expo, HP showcased the HP Retail Photo Concept Store and demonstrated the ‘fastest dry minilab printer on the market today’, the HP Photosmart ML1000D ; announced new partnerships with a range of popular sports and entertainment brands, expanded HP’s print-on-demand merchandise; and launched the HP Photo Centre 5 Premier software and new HP Instant Print Solutions.

‘Overall it [Australia] has been a tremendous market for us,’ Liff told Photo Counter. ‘Photos play a big part in family life.

‘It’s a key market worldwide. We want to build a successful story [in Australia] and leverage it to rest of the world.’

He said as a result HP would continue to invest in Australia.

He noted that there was ‘a lot of distrust in the market’, and low 4×6 print pricing in the country had produced ‘duress and struggle’.

‘The consumer is focused on 4×6. We need to move the customer from that mindset.’

He said the key is to attract the market to new offerings, and noted that printing photos in photo book form represented a saving on even very cheap postcard prints.

The environmental benefits of inkjet printing were another issue needing further promotion.

However, those waiting for HP to invest in a mass market communications campaign to help promote the new category of photo products comprising photo books and calendars, greeting cards, etc, will have an indeterminate wait.

Liff said that HP had no plans to significantly expand its advertising spend on the category.

‘I don’t see anything dramatic in that area,’ he said.

‘We will be investing, but trying to work with our partners,’ he said, adding that HP was ‘not going to write a blank cheque’ but rather consider proposals developed by HP-affiliated retailers and contribute to those proposals by matching the investment of the retailer.

Other options included seeding money and sponsorships.

Retailers needed to ‘show us what need to be done,’ he said.

He conceded that the cooperative style of advertising support HP was offering customers had more appeal to larger operations, but that ‘when you grow the pie, everyone wins’.

On the product development front, Liff noted that the new Photo Centre 5 software was easier to use and will include the capability to order online and collect in store, as Ted’s is now offering with its Lifepics service. Consumers will be able to access the new software via a website or in-store.

He said that the other new front HP was developing was in licensed product, and the company was focussed on tailoring licensed content to the Australian marketplace which was ‘local, relevant and seasonal’, rather than simply importing material from the US market.

Looking to ongoing costs associated with HP retail printing, Liff said that there was still a little room for inkjet consumables to drop a little more as the installed base grows, but he did not anticipate any dramatic reductions in the price of ink and paper, noting that inkjet printing was already competitive with silver halide printing.

Equipment service costs were also competitive ‘with similar equipment’ (silver halide) with the same throughput and speed.

Compared to other dry inkjet systems such as the Noritsu range of dry labs and the Kodak Apex system he commented, ‘Other dry lab service costs are lower but nothing matches our machine capacity and throughput.’

He added that retailers should focus on margins rather than costs.

‘You can’t grow your way to success focussing on costs – look at revenue,’ he advised.

He said there were significant improvements in the service operation at HP over the past three months or so, conceding there were some ‘growing pains’ as the service structure was built up. In addition, staff in the stores were becoming more familiar with the HP equipment.


Leave a Reply

Your email address will not be published. Required fields are marked *

Recent Related Posts