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Photofinishing arena is continuing to grow as competition soars.

Photofinishing arena is continuing to grow as competition soars

CDR Roundup - Photofinishing continues to develop as a growth industry, with the leading players emphasizing distinctive services in this highly competitive market. An increase in the number of processing companies and outlets is requiring more advertising by firms that want to continue expanding, says Guardian Photo Inc. vice president of marketing Paul Hoernschemeyer. At the same time, the 10% to 15% growth in film sales over the past several years seems to have tapered off, leaving more companies fighting for the same number of units. "Everyone just has to work harder at what he's doing in order to maintain what he's doing," he says. "Some retail accounts have taken photofinishing for granted and not advertised. Now finishing is available so widely that nonadvertisers are seeing significant erosion. Those who advertise aggressively are doing well."

Outpaces category

Processing was the second-biggest contributor to chain drug photography departments last year behind film, accounting for 34.5% (or $531 million) of the chains' $1.54 billion in total photography volume. The segment outpaced the category as a whole in drug stores.

Guardian expects to stay on a similar growth track this year, in part through its 1-2-3 service guarantee. The program promises that prints will be returned in one day, reprints in two days and enlargements in three days. Reprints and enlargements have been neglected part of processing, with orders usually requiring a week to two weeks, although they make up as much as 20% of the market.

Hoernschemeyer says that retailers using Guardian have reported a drop in late-order complaints and attendant problems.

Print Technology Inc. is also stressing speed. It is selling 30-minute Photogo processor franchises worldwide. The heart of Photogo is the P135 finisher, which includes film development and printing in a single patented unit. It automatically produces high-quality, 4- by 6-inch photos in about a half-hour and can make reprints in 4 minutes at a cost comparable to that of one-hour mini-labs.

Comparable in size to a small office copier, the smallest Photogo center requires a merchandising and service area as little at 18 square feet, or 25% of the space needed by a mini-lab.

Photogo is already in Perry Drug Stores and F&M Distributors Inc., and it has been approved for Jack Eckerd Corp., Revco D.S., Walgreen Co. and Pay Less NW, among other chains. Print Technology chairman and chief executive officer Howard Ruby notes that drug stores have lost market share in the $5 billion processing category, dropping 10 points from 32% to 22%, with mini-labs holding at 40%. But the 30-minute photofinishing centers should help reverse the trend.

If Photogo reaches its projection of 20,000 centers worldwide by late 1991, it would be one of the largest franchise operations in the world.

Meanwhile, Noritsu America Corp. has a firm grip on the worldwide mini-lab market, with a 70% share. Industry polls have given its machines the highest rating for reliability, the company says, noting that its equipment has such features as built-in quality control and an alphanumeric character display monitoring operations continually.

Its QSS-1202 system can produce 2,001 prints per hour, has a variable-focus zoom lens which eliminates the need to change lenses for different film sizes, and produces a variety of print sizes.

The flattening of film sales has been linked to the aging of baby boomers and a consequent decrease in pictures taken of families. But as the baby boomers themselves have more babies at later ages, there could be an upturn.

Still, Hoernschemeyer warns, members of today's younger generation may be the first to have less disposable income than their parents, and what they do have is being pulled by an increasing variety of leisure products. "You can't just compete against another photofinisher at this point," he says.

Remain dominant

Despite the hype surrounding electronic still technology, conventional, or silver halide photography, should remain dominant in the 1990s, according to senior vice president of sales and marketing Charles De Lelly at Qualex Inc., the photofinishing leader.

"We at Qualex feel that the interest of amateur photographers in the U.S. will continue to grow during the present decade," he says. "Cameras, film and processing have never been better, and should continue to retain their quality/value superiority over electronic still video products."

PHOTO : Processing was the second-biggest contributor to chain photography departments last year.
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Publication:Chain Drug Review
Date:Jul 16, 1990
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