By Lisa Johnston
New products on display at the American International Toy Fair, held in N
TWICE:How would you characterize the retail landscape. Has it shifted from selling specs? Should it?
Young: We are introducing a marketing concept that we call worry-free digital photography. The concept is to take the worry out of making the transition from film or from a previous generation of digital camera to new technologies. We want to make it less daunting, to provide all the benefits and make it simple for the consumer to understand.
You separate consumer concerns into simple buckets that the retailer can speak about: power, lens, picture quality, responsiveness, design, versatility, those kinds of things. Those apply to all of our products but it is just a matter of giving the retailers a way to speak to a consumer that simplifies the learning process and the choosing process.
The fact that we have a thousand different designs then becomes a consumer's choice once they have gotten the baseline cleared for them. If they are confident that the camera is going to have a good battery life, that it is going to take the picture quickly, that it is going to take a good quality picture, then the rest of it becomes a matter of individual preference.
That is giving the consumer a real choice that they can value.
Scott: We agree with that 100 percent. We spend a tremendous amount of resources and energy training sales associates, providing them with tools so they can communicate and explain features and the benefits to consumers.
Ryan: From an HP perspective, it goes back to the solution, which is a focus on the experience as opposed to just the specs. The camera shop itself may actually be a thing of the past at some stage.
It would really center more around the “photography solution shelf” which contains a compact photo printer, a photo lab, a storage and archival kiosk, software, etc. The retailers that can jump on that and get experience there are the ones that will capture the greater share of the wallet and have more satisfied and loyal consumers.
Lee: Every retail channel right now is selling more cameras than they have in the past. Every one. Consumer electronic channels represent a large share of the market right now. Office superstores still represent a large part of the market.
As more women start purchasing digital cameras, which we predicted last year was going to happen and it is definitely going to happen this year, the mass merchants are going to sell a lot of cameras because that is their customer.
I don't know if any of us can really predict who is going to do well because each of these channels have an opportunity to sell digital photography. It depends on how much are they committed to it. Are they committed to building brand awareness? Are they committed to training? Are they committed to the merchandising?
Peck: As selling digital SLRs takes a more prominent role, certain retailers will do much better in that environment. They need to carry more accessories for those products. While the CE channel does really well and they certainly sell a lot of units, and office superstores sell a lot of units, I don't know how deep they can get into some of the accessories that support the digital SLR. So I see the photo specialty channel remaining very healthy.
Just a few years ago it was doom and gloom for the specialty traditional photo retailer, that they were not going to be able to survive against the big-box consumer electronic stores. Now we are seeing a trend where the specialty stores are actually doing very well. They are able to sell not only the hardware but accessories to go along with it.
Scott: We shouldn't overlook the e-commerce channel as a real viable, growing business.
Sienkiewicz: We are convinced that in many instances the consumer does his research, if not his buying, online and then picks his retailer based on other drivers.
If he has a good feeling about another purchase that he made there or another product category that is available at a certain retailer, and they happen to have that product and the price is the same [as online], then that's where he will make the purchase.
Ryan: To go back to a point that Jon [Sienkiewicz] made earlier, what happens when growth starts to slow down? As you look at a more mature market, the dark horse of the industry is really the mass [merchant]. The mass channel and their ability to drive just tremendous volume at a mainstream price point, some $300, some $200 price points, and just the flow of traffic they get makes them very important.
Then the product self-segmentation we talked about earlier could become a self-segmentation by channel. If I go in for a high touch and I want to buy from an experienced sales associate, I will go to a photography specialist. If I am looking for that networked home I am probably not going to go to the photography channel. I will go to a consumer electronics super store. If I just want to buy an affordable replacement for my two-year-old digital camera, I just want to grab a camera off the shelf and go, it could well be mass merchant.
Nelkin: Each channel is going to have to figure out what they do that is outstanding and how they can show a value to the end user and then take advantage of that niche.
If everyone competes on the same camera at the same price point, your scenario will be: one retailer will grow, one will fail. As long as our market is segmented into digital SLRs, advanced digital cameras, basic units, multimedia devices, cellphones, there are enough segments for each of the retailers who are smart enough to find a meaningful niche to not only survive but prosper.
This TWICE webinar, hosted by senior editor Alan Wolf, will take a look at what may be the hottest CE products at retail that will be sold during the all-important fourth quarter. Top technologies, market strategies and industry trends will be discussed with industry analysts and executives.