TWICE: What features will drive sales in the upcoming quarters? What will be the hot price points?
Westfall: In the compact camera market, what’s going to drive consumers is definitely going to be pricing for megapixels. I think that really is something we can’t avoid, as much as we’d all like to. People are looking for ever higher and the pricing sweet spot in the compact area that we see is, generally speaking, in the range of roughly $299 to $499.
As far as the digital SLR, it’s the extra performance that customers get. Faster shutter lag, better selection of lenses, ability to track focus on a moving subject, and ability to get better pictures with lower noise.
Scott: When you look at the fact that 50 percent of the cameras sold will go to a household that already has a digital camera, they’re looking for improvements to prior dissatisfactions.
I didn’t touch on systems, where consumers are buying not only the digital camera, but the printer system as well. That is going to contribute to sustaining good growth in category revenue. There’s a kind of a nowhere land from $500 up to the entry point of digital SLRs. I can’t see that changing too much. There seems to be a mental threshold for consumers at $499, and that’ll probably continue on into the future.
I think the megapixel war will continue, but other things like size of LCD, the size of the camera in general, certainly ease of use and new technologies that will drive new behaviors and new uses for digital photography like wireless [imaging] will be important.
Muller: As resolution has increased, optical zoom has increased, and price points have come down, the one winner in this whole equation has been the consumer. The consumer can get very good technology for under $200. So how do we as manufacturers and retailers take these differentiating technologies and explain them to the laymen, the average consumers, in terms that they understand? I think that the retail-manufacturer partnership that does that the best will win.
How do you explain things like a technology we will introduce called bright capture, which is geared towards both being able to view images on the LCD in low-light situations and also help take better pictures and extend the flash range in low-light situations? So what does bright capture mean? Now it’s a catchy phrase, but at the point of sale, being able to explain that to the millions of consumers that come into U.S. retailers in terms that they understand will be important.
There will always be the blockbuster price point where a 5-meg, 3x optical hits X price point on Black Friday. Let’s face it, none of us in this room makes money on a Black Friday item, but where we do stand to be profitable, and subsequently make the retailer more profitable, is with differentiated technology and being able to explain that to the consumer.
Desmond: Certainly for Q4 we’re going to see a lot of activity in the sub-$200 range. It’s just under 40 percent of the total business. Not being a major market shareholder, we feel that we have to give the consumer an extreme value. And by offering an optical image-stabilization system in all of our cameras, we feel that we’re giving the consumer an excellent value and a reason to make a purchase.
Zakrzewski: I second that with the image stabilization, which we call Anti-Shake. We think it is extremely important throughout the line. Also, there is the form factor — the camera becoming more of a style piece as opposed to just simply looking like a camera. I think it’s incredibly important to bring people to the point where they are willing to carry that camera not in their purse but as an actual accessory.
Adams: It’s interesting how we’re almost going back to the heyday of film where the high-end compact camera defined the low-end price of an SLR. And to what Bert and Paul are saying, I think style is going to be a big feature for consumers, especially for the second-time buyer as Ron mentioned. And I think that the differentiation as Stewart had mentioned, being able to separate yourself from the pack, are going to help bring that desired customer and keep that price point high.
The uniqueness of digital photography allows us even more feature sets to compete on. In the days of film, we competed on zoom, and we competed on flash range and the speed of the product. But today we’ve got LCDs that are going to get bigger and bigger. The sensors themselves are going to get bigger within the camera, which is going to allow better image quality. I’m not so sure the consumer necessarily needs a 12-megapixel compact camera.
But we also have speed. Boot-up speed is a unique term in the day of digital that we’re all competing on, along with shot-to-shot speed.
Gazzola: I think what benefits those second-time, third-time buyers is going to be differentiating technology. We recently introduced Real Photo technology. That technology is totally based on the consumer benefits, reducing camera shake, improving shooting in low-light conditions, those types of benefits beyond just the megapixel, beyond the size of the LCD.
Scott: We all sit around the table and talk about innovation, and I would suggest or challenge this group, that there really have been only a few companies that have truly innovated to drive consumer solutions. I think certainly in the next 12 to 24 months we’re going to start to see some real innovation that drives the technology into the product for the consumer’s sake. I think we started to do that already with EasyShare One. I believe that that is what’s going to really give us the true continued growth into the future.
Giordano: What we have is a very interesting dynamic. A digital SLR owner/customer is very different than your typical point-and-shoot category customer. There is a passion in photography to spend $1,000 on a digital SLR. There is an investment there. Photography is very important to that person. And as you go down the food chain, so to speak, to the $199 or under price points, it’s a completely different need for those customers.
If you would have told me five years ago that we would have cameras that would automatically find faces and would automatically correct the red eye in the camera and automatically brighten the pictures in the camera — the customer didn’t have to do anything — that is a fantastic story. And I think maybe the industry is a step or two ahead of the consumer. Consumers are still trying to catch up. They’re kind of stuck on this megapixel/zoom thing. They haven’t discovered the other fantastic things that these cameras provide, and I think our job is to really educate the consumer, understand their needs and wants, and provide them interesting and value added solutions.