Disposable cameras capture memories and marketshare - Photo: What's Hot, What's New, What's Happening

DSN Retailing Today, Nov 25, 2002 by Laura Heller

A trip to Mexico with friends recently served to solidify what is a growing trend in the photo category. Of the eight people in the group, there was nary a costly camera to be found. The shiny new digital cameras, point and shoot units, SLRs, telephoto lenses and compact APS units were all left at home. Instead, one-time-use cameras were in abundance.

More and more, consumers are turning to simple--and disposable--options to fill their photography needs as one-time-use cameras continue to grow in sales and market share. According to NPD Techworld, one-time-use cameras represent a $1.1 billion market on an annual basis and continually post increases of 6%, year over year.

The Photo Marketing Association reports even higher numbers, stating that although the category has grown every year since the product's introduction in the late 1980s, sales momentum has recently slowed to approximately 10% annually. Sales are expected to hit the 200 million-unit mark by the end of this year, according to PMA.

"It is slowing somewhat, you can't grow at 38% forever," said Garry Briddon, vp and gm of business development for Kodak's consumer imaging

division. "But in a fairly challenging economy for the photo category and travel (related products), sales are up 8.3% for September and 5.3% for the year. And that is on top of a very soft first quarter when consumers were reluctant to travel."

One-time use cameras may increasingly be the camera of choice on vacation, but its uses have become much more broad. According to Brian Hammoch, director of market for consumer film products at Fujifilm, 69% of consumers purchased a one-time-use camera in 2002, up from 60% the previous year. "The household penetration is only 10% behind conventional film," he said, the numbers for which declined from 83% to 79% this year. "It's very safe to say that some part of the flattening of that growth curve can be attributed to quick snap's (popularity)." Although according to Hammoch, close to half of all U.S. households purchase both film and one-time-use cameras.

And while that may be bad news for manufacturers of conventional 35mm cameras (sales of which have declined 21% so far this year according to NPD), it paints a pretty rosy picture for retailers.

"It's a great traffic builder," said Hammoch. "It secures three trips to the store." The three trips being the initial purchase, a trip for processing drop off and finally a return for pick up. It also offers a myriad of merchandising opportunities, including placement in the toy aisle, party supplies, check out lanes and even sporting goods departments. Multipacks are enjoying increasing popularity, particularly at club stores as consumers stock up on items now considered to be regular household items.

Private label plays a very important, if changing, role in this category. Consumers are less sensitive to branding with these products, making features a priority instead. "They look more at brand and quality with rolls of film, and more at convenience and features for event (purchases)," said Hammoch. This makes store brands an easier sell to the value-conscious set, but also allows retailers to use the products as differentiators in seasonal or event merchandising as well.

Manufacturers such as Ferrania Imaging Technologies are providing increasingly specialized products to retailers. "We offer a whole series of product and packaging designs, from traditional black-front cameras to translucent colors and clear-front cameras with paper inserts," said Don Cacciola, Ferrania's U.S. marketing manager.

Although the company's primary focus is store brands (and 12% to 15% of all one-time-use cameras sold are private label, according to Cacciola), retailers are beginning to ask for proprietary designs to suit individual needs and promote in-store events and special merchandising programs. A good example of this is Target's use of one-time cameras with exterior designs to match seasonal promotions. Although retailers have for years sold private label disposable cameras, Target has now begun incorporating them into its rotating seasonal displays, further allowing the retailer to differentiate its merchandise selection.

The use of store brands in the traditional sense, with the store's name emblazoned on the camera, are continuing to offer advantages for retailers. Beyond the differentiation factor, one-time-use cameras with the store's name on it may help to reinforce that location in the mind of the consumer, increasing the odds of a return visit. "There is a greater likelihood that the store brand will come back to the store for photofinishing," said Cacciola.

"It's a good value for retailers, consumers and manufacturers," said Briddon. "When you get something that hits all three of those, you feel pretty good about it."

One-time-use cameras are not only helping to prop up film sales even as digital gains in popularity, but they also appeal to the kind of customer retailers with photofinishing services cherish: the frequent processor.