Discounters, CE chains expect hot summer exposure for APS - consumer electronic chains, Advanced Photo System, 1996

Discount Store News, June 3, 1996 by Pete Hisey

NATIONWIDE DSN REPORT -- Father's Day will mark the real launch of the Advanced Photo System, with the first circular ads scheduled to break soon, supported by national advertising from major camera and film companies, particularly Kodak and Fuji.

The official launch date of April 22, as it turned out, was simply a shipping date. Kodak ran some teaser ads in March and April, but all parties are saving their big push for the summer (which this year will feature not only the traditional vacation season, but the Olympics as well) and the fourth quarter.

"We've been holding off on national advertising to minimize frustration at retail," said Kodak trade marketing manager, mass channel Sue Ward. "We wanted to give retailers a chance to set up and merchandise the system. Our ads will hit for Father's Day to coincide with retailer advertising."

According to Fuji vp of sales, consumer markets Rod King, advertising in the first two months of introduction might be counterproductive. The industry has been the victim of the success of its simultaneous worldwide launch, and strong sales in Japan and Europe have created a shortage of the most desirable cameras. "But we expect to have plenty of inventory by summer," he said.

The company plans an advertising blitz later in the summer, including a new print campaign, a roll-out of new camera models and trade-up promotions that include a discount certificate on each APS Quicksnap Slim, which will allow consumers to save on the purchase of a permanent APS camera.

Kodak's Ward also reported a camera shortage and added that what the company expects to be its best seller, the 4100 Zoom, a fully featured camera slated to retail for about $189, won't reach shelves until June 15 or later because of inadequate supply. "We want to be able to ship to all customers at the same time," she said.

One unexpected result of the original launch was the interest in cameras by retailers who were mainly involved in film and photo finishing, Ward added. Grocery chains in particular have added cameras to promote the entire APS system. "They're getting the message that it is a system and that merchandising all of the elements will improve sales overall."

Publix, the Florida-based grocery chain, has been particularly aggressive with the APS system, adding three skus of cameras, supplemented with a stand-alone merchandiser containing film, frames and storage boxes. "They've even ordered the 4100, which at $189 is a high price point for the grocery channel," Ward said.

The 4100 received a major kickoff from QVC, which featured the camera in a bundle with rolls of film and free processing for $199, and Ward added that Service Merchandise has been the most aggressive of mass merchants in getting the entire system on-shelf.

Kmart and Target both were planning to have the system fully merchandised by the Memorial Day weekend. Both had the product on-shelf by early May, but were slow to add the merchandising materials.

According to Ward, the initial results at retail have far exceeded Kodak's expectations, particularly in average ticket. "Consumers are definitely stepping themselves up," she said. "We're seeing significantly higher dollar turns than we had projected. People are really interested in the technology, and the hardware mix is a clear, clean proposition--you get what you pay for, and consumers seem to want as many new features as they can get."

According to Fuji's King, orders from all classes of trade have exceeded expectations, but discount stores and consumer electronics chains, and to a lesser extent drug chains, are leading the way. "But we've been very happy with sales in every charmer," he said. "Even photo specialty chains are ordering the whole line," which ranges from one model, the Endeavor 10, that retails for less than $50 ($39 in some locations) to high-end units selling for $800 or so. "The lower end has done best so far, but that's predictable given its wide distribution," King said. "What we're really seeing is action from early adopters, who are buying the 2X and 3X zoom models."

Apart from a temporary shortage of cameras, the other fly in the ointment is the availability of photo finishing. There are virtually no one-hour machines in place so far, and at Publix, for one, the wait for processed film can stretch to seven business days.

Fuji's King noted that the company now has 16 Fuji TrueColor labs converted to accept APS film, and that minilab operators are ready to take the expensive upgrade plunge, leading to improved service by late summer. "I think the minilab operators are convinced that APS is here to stay," King said. "Initially, they had a wait-and-see attitude."

Qualex, Kodak's photo finishing division, has launched an aggressive campaign to speed up processing (which is still running an unacceptable five to seven business days in many outlets) by guaranteeing delivery within 48 hours at chains like Target by using Federal Express shipments.

As more APS-ready mini labs reach the retail floor over the next six months, two-day turnaround should become commonplace, Ward said.