Kodak Launches Digital Camera Kiosk Test In Atlanta Area

Atlanta— Will digital camera owners both current and prospective seek out consumer electronics, photo specialty, food and drug stores or even hotels to make prints from their digital images on stand-alone kiosks? Will CE retailers, who do the bulk of digital camera sales, muscle in on food and drug's share of today's fulfillment dollar, or will the consumer retreat to the comfort of established habits once they know they can get digital prints from retail?

These questions and more Kodak hopes to answer definitively in an ambitious and sweeping nine-month cross-channel digital camera kiosk test in the Atlanta-metro area.

The test will blanket area retailers across food and drug, photo specialty, CE, warehouse clubs and "experimental channels" (principally hotels) to probe consumer attitudes and habits. Staples, Best Buy, CompUSA and Circuit City compromise the participating consumer electronics retailers. Other outlets include Kmart, Target, Eckerd, Rite Aid and CVS, among others.

This test is "significantly unique" among previous Kodak endeavors, explained Paul Tucker, photofinishing marketing manager, in that it is a "pure marketing test" and not an operational test.

"We know the equipment works, what we want to do is validate that this is indeed a valuable service to customers," Tucker said. "From our internal research we know that consumers respond to the value this service offers, the problem is awareness."

The awareness hurdle is a significant obstacle for kiosk makers, particularly those aimed at the digital camera customer. Only 10 percent of U.S. households have used a kiosk and the majority (90 percent) made prints from prints, not digital files, according to PMA's 2002 Consumer Photo Buying Report. PMA also found kiosk awareness static since 2000, with only 37 percent of U.S. households reporting being aware of photo kiosk services.

Tucker acknowledged that the challenge ahead lay principally in spreading the word. To that end, metro-Atlanta will be bombarded by a series of radio and print ads as well as targeted area-PR campaigns and in-store signage at participating dealers to lure customers.

Kodak will be testing not only whether, but also how, customers use a kiosk. Will they want prints instantly, will they upload photos and be happy with picking up their images later in the day or next day?

Where customers use a kiosk will also be scrutinized. According to Tucker, food and drug stores do about 40-percent of all film processing and Kodak is very focused on making the process "as easy and as familiar as film," which would mean food and drug would remain dominant as consumers switched to digital.

But Tucker said Kodak was also interested in where consumers did the bulk of their digital camera buying, which places the CE retail chain into the fulfillment mix. Throw in hotels and warehouse clubs and Tucker said the company will be poised to have a bird's-eye view of customer's habits.

Metro-Atlanta, the site of the test, was chosen for its high "digital demographics" — which Tucker described as a sizeable base of computer and Internet users, digital camera owners, and a high number of prospective digicam buyers. It was also ideal because of its high density of cross-channel retailers, Tucker said.

Preliminary results will be in as early as March, at the PMA trade show, where Kodak hopes the data will validate the concept of getting digital prints from a kiosk at retail.

"We view this more as a pilot than a test, a precursor to a major national program," Tucker said.

Until June of 2003, Kodak will give these various retail outlets one of four kiosks, all of which, as Tucker noted, have already been operationally tested prior to the Atlanta test. The first option is the Digital Order Station, which takes media cards and writes images to a transfer CD that is sent to a Kodak Processing Lab for printing. Pictures are delivered back to the store for customer pick-up the next day.

The second option is the Picture Maker Order Station, a counter-top unit that accepts all digital media, offering preview and select functions as well as limited image-editing features. Consumers get their pictures in minutes from a back-end printer.

CE vendors will receive the Picture Maker Digital Station, which sports an integrated printer with the order station in a freestanding kiosk. It can deliver Kodak Picture CDs and process credit card transactions. Finally, other vendors will get the Kodak Print Station, Kodak's flagship Picture Maker.

Kiosk consumables will be supplied by Kodak and maintenance responsibilities will fall on trained retail store employees, augmented by regular service visits by Kodak personnel.