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Your Business Commentary

Mike's often irreverent, thought-provoking analysis of the industry.

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Why a Kiosk Makes Sense For You

Why force your customers to visit your competition?

by Mike Hartnett (November 1, 2004)

Attention all independent scrapbook dealers: I am about to recommend you add a new product/service to your store. Just what you need is ANOTHER product, right? This one is different. It's far more expensive than any album, paper, or embellishment and you don't sell it to your customers. No, I'm not crazy.

It's a photo-processing kiosk that allows the consumer to display her digital photos, choose the ones she wants, choose the size, crop them, and print them. Why should you have one of these in your store? Because you can't afford not to. Consider these trends:

Consumers are turning to digital cameras.

1. According to research by the Photo Marketing Association International (www.pmai.org), the trade association for camera businesses, digital cameras out-sold traditional cameras in 2003 for the first time. This year PMA estimates 15.7 million digital cameras will be purchased, compared to 10.6 million traditional cameras.

2. Digital cameras were in almost 28% of U.S. households by the end of 2003; that's up from 19.6% in 2002 and 14.3% in 2001.

3. PMA projects that 5.4 billion prints will be made from digital images during 2004, compared to 3.4 billion last year. By 2006, the number will rise to 10.6 billion.

Women and kiosks.

1. From PMA's study, Marketing To Mom: "With [digital camera's] entry into the mass market, the profile of the typical digital camera user has changed from technology-oriented men to time-strapped young mothers. This is good news for retailers, as mothers are the typical keepers of the family photo album and are the most likely to want photographic prints to save her family's memories. Because these young mothers are often strapped for time, the convenience in receiving prints is of the utmost importance. Enter the self-service imaging kiosk."

2. Most consumers, especially busy mothers, do not want to buy a second home printer and install it, and then buy special paper and software to print their photos.

3. Instead, a growing number are using a retailer's kiosk; it's much quicker, easier, and often cheaper. PMA estimates that approximately in 2006, 1.3 billion prints will be made in kiosks in retail stores.

Kiosks and your competition.

1. According to PMA, 40% use kiosks at discount stores/warehouse clubs. Drug stores and pharmacies and combination/hypermaketets stores are the next most popular locations.

2. A growing number of discounters and drug stores are adding scrapbook supplies or expanding their inventory. The drug chain, CVS, is adding scrapbook supplies, and rumor has it that Wal-Mart is expanding its department.

3. While scrapbookers are in Wal-Mart or a drug store using a kiosk, they will check the store's scrapbook inventory. Granted that inventory won't hold a candle to yours, but they will probably find something to buy that they would have purchased in your store. (And they'll notice Wal-Mart's prices, which are probably lower than yours.)

Everyone is busy these days. The current situation forces consumers to make two trips, one to obtain their prints and one to their favorite scrapbook store. They have to get their prints, so if they pick up an album, a pen, and some paper while they're in the discount or drug store, they will save a trip.

Kiosks and you.

You might not lose many sales to scrappers picking up an item or two at a discount store while they make their prints, but can you afford to lose any?

The difference between profit and loss for many independents is razor thin. It doesn't take many lost sales to turn a profitable store into a loser.

Why force your digital camera customers to go to your competition to obtain their prints? They'd rather go to your store in the first place. Having a kiosk is like playing strong defense. You're defending the future sales of your inventory. But it can be a source of profit, too.

You can make a profit on each print, but more than that, you'll sell more supplies. Why would a consumer go elsewhere if the source of her photos also has all the scrapbook supplies she needs? Also, you can use the kiosk for various promotions a few free prints if they purchase X amount of supplies, if they take a class, etc.

Companies such as Kodak and Sony will be happy to explain the uses/value of kiosks. Notions Marketing even sells the and they are not as expensive as you might think. To learn more, call 800-748-0250, or email contact@notions-marketing.com.

(Note: Statistics for this article were taken from the website of the Photo Marketing Association International, www.pmai.org. To read the complete studies, visit the site, click on Market Research, and then Photo Industry 2004: Review and Forecast; Marketing to Mom: Mom in the Digital Era; and Self Service Imaging Kiosks Gain Momentum. Email your thoughts and reactions to mike@clnonline.com. To read previous Business-Wise columns, click on the titles in the right-hand column.)

xxx

 

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