Here in the US, I have seen the same bad pattern of photo stores liquidating rather than being sold to new owners when the owner is through with the daily battle of running an operation, writes Larry Steiner, Spectrum Photo & Digital, Ohio…So, I think the problems in Australia and the US are quite similar. With the closing of Blacks in Canada, there is probably another salient example, even though it probably has other factors in play based on the size and scope of that operation.
We all know the root causes for old style camera shops and retail photo lab declines. We can no longer unlock the door in the morning and wait for the customer to saunter in with a roll of film in hand or our newspaper ad with the latest deal from Canon or Nikon. I will sidestep addressing the camera store issue because my shop is all about services, not hard goods. Suffice to say, I don’t see why camera shops tolerate the abuse they get from most camera manufacturers. If they had a strong services offering, there might be a way out of the chute that leads to the slaughterhouse. But I digress…
In most markets there is somewhat less printing going on compared to 10 years ago, especially if the retailer never made the effort to show consumers how easy and satisfying printing from digital can be. Bad websites, poor online systems and old staff who thought ‘this digital thing is terrible’. We all know examples, and sadly some still exist. In any event, there is less traditional business in those base products than there was before. So this will cause shrinkage in the base of stores.
We have seen a slow erosion in the infamous 4×6 print. Still, photo printing is a core competence in our shop and we have benefited from other stores leaving that space. What we have been able to do is dramatically expand our product offerings. Large format, press printing and specialty products have more than made up for the problems with traditional photo printing volume. Even our traditional 8×10 and 5×7 business has help up because of our integration of those formats into specialised products. We are looking all the time for new and unique offerings to keep growing, not necessarily in how to boost sales of the old-style products. Promoting old-style products involves us in more of a commodity type marketplace and a race to the bottom in pricing.
So one problem is that adding all of this stuff is not simple. Some operators think it is too hard, but I think there is no choice if you want to survive or indeed thrive. Additionally, communicating all the new goodies to the customer base in not simple, but with good foot traffic – and perhaps a reasonable social media strategy – it is well within the budget of the smallest operator. At the end of the day, finding the time to make these additions and a willingness to take some calculated risks over and over again are the main constraint. And, doing all of this on your own can be incredibly challenging, but there are groups available to small and mid-sized operators that can really help with implementing this strategy.
Indeed, smaller operators can have a big advantage because they can be more nimble and are closer to their customers. So, local retail can really thrive in this environment. We depend on the IPI Member Network to source suppliers, technical support and marketing resources. We could not do all of this on our own creating products, technical sourcing and marketing so grouping together is really important. We can compete like a national retailer and often beat them.
You asked where the big suppliers like Fuji and Kodak fit in. It seems like these vendors can behave very differently in various international markets. If they are smart they will continue to support the retailers that innovate and keep photo merchandise in the front of the retail customer. The old school concept of doing deals to get into the big box stores is a dead end for the entire industry. Those big retailers will drop photo the instant there is a dip in sales or some other parameter indicates that the photo department needs to be a toothpaste shop.
Photo specialty retailers have imaging as part of their identity and will stand by the trade even during transitions or temporary dips in sales. Moreover, the small nimble operators create products and services that revitalise the trade. We are lucky in the US that our partner, Fujifilm, has recognised this and has provided support to the IPI group. If you listen to Fujifilm and read their comments you can see that they think that keeping specialty photo retail alive is very important and they have worked at doing that. Killing specialty stores by giving a national retailer a big cost advantage could destroy the entire trade over time. We only want a level playing field.
Finally, store operators need to have an exit plan. Developing staff to buy and takeover operations or making their operation attractive to new entrepreneurs are a couple of ways of accomplishing that. Having a system to market and integrate new products and services is part of making the store attractive to any buyer. Increasing sales over time makes an operation valuable when it comes time to sell. This is something that needs to be planned for well in advance.
…Thanks for tolerating my soapbox speech.
– Larry Steiner, Spectrum Photo and Digital Services, Ohio.
No – thank you, Larry. Just goes to show you can be both positive AND realistic! KS
NOTE: (While Larry Steiner is vice-chairman of IPI, the thoughts and opinions above are his own, and and in no way reflect IPI policy or positions.)
Larry,
All good points. Thank you. It echoes my conversation in London with Seen Kodak Express Digital Solutions, which I decribed in an opinion piece published here yesterday.
I ran the Nikon importer, Maxwell Optical Industries for 25 years until 2006 here in Australia. One of the ways we built business as a private company, was the industry’s first major consumer loyalty scheme, Nikon Club Australia. At its peak we had 15,000 paying members, we ran national and regional classes, teamed up with a leading Photo Tour Operator, owned by Darren Leal, published a quarterly How to member magazine. Yes, people paid to belong. It was self funding, almost, but gave us a huge insight to consumer needs for their photography. As a manufacturer’s representative we recognised the importance of hearing directly from consumers, but most importantly it was intended to motivate and educate so people genuinely got more from their Nikon photography.
Now I am in semi-retirement I am working towards digitising over 12,000 negatives and perhaps 6,000 transparencies. As a consumer I will never get the time to do that myself, despite the fact I have a first class Nikon large format slide/neg scanner. I know I need to leave it to a professional.
I am working with two potential service providers who wil put value back into my archive and enable me to quickly gain access to work dating back four decades. Over 750,000 currently working Australians will be added to the growing number of retirees in the next decade. It’s fifteen times that number in North America. By creating value for my family’s pictures, those service providers will be creating a bankable value for their business. Your point about planning for the time when it is time to sell, is vital. Because if they become a solid service provider, they will be the go-to community partner who understands how precious those currently inaccessible slides and negs are to me now. Time is what we have a limited amount of. Value creation through services gives me the time and the pleasure of revisiting those events in life that increasingly are the moments we most cherish. For them it generates revenue and margin on a very limited capital investment level. Few other businesses bring both pleasure and value to both parties. Photography does!