E-Commerce Shrinks As Second Timers Get Touchy

By Staff On Aug 7 2006 - 6:00am




TWICE: So as the dynamic of who is buying a digital camera has changed, has the dynamic of where they're buying changed as well?

Lee: For first-time buyers, the mass merchants are the bigger channel. Electronic specialty is seeing a bigger share of the second- and third-time buyer.

Lundeen: Something I think is interesting is that the mass channels are getting into the higher priced cameras. I think this upcoming season will see some non-traditional players get into the category because of the gifting potential at Christmas.

Carr: The other thing that we're seeing is that e-commerce is dropping quite rapidly. And we think it's because of the second-time buyer. They know what they want this time, and they want to go in and try it. Maybe the first time they would have gone and bought it on the Internet, but now they're getting serious about it, and they want to go into the store and really play with the camera and test it. They want to know the click to capture speeds. They want to know what accessories fit.

Lundeen: On the flip side, e-commerce printing is through the roof.

Peck: As the digital SLR business becomes a more significant size of the market, customers are now looking for the traditional accessories that they added onto their SLR camera 15 or 20 years ago. So they like to touch and feel the lenses, they want to see the flashes, they want to see the accessories, they want to see the gadget bags. We see that the photo specialty store still has a very healthy place in this market.

Lundeen: We're seeing photo specialty as having an interesting role, but really any retailers who have a clerk on hand in a photo center can help people working with these devices. Where the consumer electronics chains have an edge is that they're already pulling the consumers in. They offer the best array, but anyone who can help the consumer understand the printing options and how they print from cam phones and the complexities of imaging will be well positioned.

Campbell: I think that the consumer electronics chains are starting to understand the value of what photo specialty has been able to do, and you're starting to see them put a greater emphasis on training and making sure that their staff is able to handle the customers coming in. I know that there has been, over the last few months with the major CE chains, a significant emphasis on that. I think the other thing that's interesting is occasionally the warehouse club seems to be a place for repeat purchasers to go, and it's a different demographic. They're researching the products, they know what they want and they're going after those higher priced products at the warehouse clubs.

Peck: One thing I would like to add when we talk about the Web is that customers will use the Web to do the research. Certainly the first place they're going to is the company's Web site. They'll go to a PriceGrabber for example — they'll check prices. But I think they're also very savvy about the pricing in the marketplace. It may not necessarily be a matter of where they can buy for the lowest price, but where they can have the best experience. They may do the research online and then shop at a photo specialty store or go to a big-box CE store.

Lee: I think they're going to be looking for the full experience. As you pointed out earlier, they want to see everything together, not just “here's a camera and a lens.”

Hoffman: Well, as features continue to increase in cameras, consumers are looking for that education, so photo specialty and the educated CE dealers are going to be an important [resource] for the consumer.

Carr: They also have another alternative to a digital still point and shoot — it's the camera phone. And for that lower end of the category, the sub-$100 product is really rapidly moving over to the camera phones. So if they are going to purchase another camera, it will be higher end. They're going to shop around.

Peck: One of the hot features today in digital cameras is image stabilization. Well, how do you really demonstrate image stabilization on a Web site? I think this is a good chance for people in the store to demonstrate that.

Lundeen:The opportunity for the industry is to get consumers to understand that having a 5-megapixel camera isn't how you eliminate blur or how you capture low-light images. That's an interaction between the image sensors, the processor and lens and a lot of other things. So there's a terrific opportunity for education in retail.

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