Profits Move Beyond Prints

By TWICE Staff On Aug 7 2006 - 6:00am

TWICE: How can retailers capitalize on the archiving and storage opportunities presented by billions of images piling up on hard disks?

Carr: It could be as simple as getting a CD or DVD back when you get your prints. That's one-step towards archiving.

Lee: Well they already do that. Unfortunately a lot of customers don't avail themselves of it and they don't understand it. They think, “Well, I've got a copy of the image on my computer, and I've printed some of these that are important to me. I'm all set.”

Lundeen: I've heard of various success with CD sales as an attach to a digital- or to a film-developing order. I've heard as low as, well, zero and as high as 70 percent. Some retailers have really honed in on the message to get a 70 percent attach rate.

Campbell: I think that consumers are going to be looking for two different types of solutions. They're going to look for that full-service retailer where they can walk in and say, “Please provide me with my pictures on a CD and give me my prints, and I can walk out and I'll be happy.” Then I think there's the customer that's going to want to try to do it themselves. Whether it's home printing or the ability to take an SD card, put it into the DVD recorder and burn their images themselves.

Carr: Plus, for the retailer, the more that they offer these types of digital services, the more it will draw back the customer into the store. Maybe I had my vacation pictures printed at the retailer and had a CD made, but at the end of the year I want to do a book. If I've got it on CD, I can do the book whereas if I just have the prints, I can't. Retailers can position themselves as a digital imaging partner, offering to take all your pictures and at the end of the year, create a year-in-pictures book. These are high value, high profitability, services.

TWICE: Is there a certain type of retailer that these solutions are more appropriate for?

Hoffman: I've been seeing it in photo specialty, especially where they're not just educating them on product, but also taking them to the final solution, the print. They have print stations set up within their retail establishments where you can sit down in a relaxed atmosphere and learn how to print, how to add borders, or messages or how to create calendars on your own. Consumers are going to continually come back for that service.

Carr: And your photo specialty doesn't have to be a stand-alone photo specialty store. It could be a photo specialty department within a Walgreens or a CVS. CVS does it very well. Target does it very well — servicing the imaging consumer needs totally vs. just printing pictures out for them.

Peck: Plus the retailers also recognize that a certain portion of the business is going to be home photo printing. They very clearly recognize the importance of stocking ink and paper. And I'm not just talking about 4 by 6 or 5 by 7, but all types of fine art paper, all the inks. And it's very profitable for them.

Carr: The advantage of all of the online services is that the pajama mamma can do her thing at home, send it up to the Web and pick it up later on when she goes to pick up her kid's prescription. She loves that she can do it at home but doesn't have to deal with the printing. That's become very popular among consumers.

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