New films, mid-priced cameras lift sales - photography departments - Discount Industry Annual Report: Part 2: Merchandising & Productivity

Discount Store News, July 17, 1989

New Films, Mid-Priced Cameras Lift Sales

For the first time in years, a revolution in film technology is more than just a public relations catchphrase. The major piece of news, still video, is of course not so much film as "media," but its impact, for the short term, should be less profound than that of a couple of new film products--Reala from Fuji and OneFilm from Polaroid.

Reala, previewed at the February Photo Marketing Association show, just hit the market, and its flexibility and color trueness should make it a hit in advanced amateur and some professional circles. The film, which is expected to retail at slightly more than conventional products, includes a new color layer that negates the effects of fluorescent light in indoor situations.

On a mass market note, however, its main selling point is a far deeper, richer and more realistic representation of the color spectrum, resulting in soft, true skin tones and bolder colors.

While there really isn't much new about OneFilm, it represents a clever marketing angle. Most amateur photo bugs remain confused by the bewildering variety of films on the market--high-speed films, indoor films, outdoor films, low-light films and so on.

Most consumers would, frankly, prefer to use just one kind of film, and some industry observers question the need for the plethora of films currently on the market. However, most film makers are married to the "film for every condition" concept, leaving a large niche open for Polaroid. That niche, according to Polaroid, is the "please don't make me think" brigade, and there are a lot of them out there.

Apart from film, the big news among discounters continues to be the latest generation of mid-price autofocus cameras. However, inexpensive 35mm point-and-shoot cameras have come on strong, with prices under $20, and they could propel a booming film and processing market.

Overall, the photo business at full-line discounters seems to be stagnant, and even declining at certain chains. Discounters like K mart and WalMart and hypermarkets like Auchan and Twin Valu have turned photo into major statements, but several discounters seem to have de-emphasized the department.

Video seems to be making inroads into the photo market. Camcorders have replaced cameras for a significant portion of the consuming public, and the still video camera has the potential to turn that trend into a revolution.

Camera and film makers point out that no other media can truly replace film. Although prints can be made from still video images, they are a far cry from the quality of 35mm prints.

A saving grace for the industry might be automated semiprofessional cameras like Minolta's Maxxum. Offering the artistic quality and options of an SLR but with the ease of operation of less sophisticated cameras, these new models could bring new photographers into the market.

The same goes for a round of promotions aimed at children (several new easy-to-use models, including ones from Concord and Keystone), the youth market (Polaroid's Fling), the casual photographer market (Fuji and Kodak disposable 35mm cameras), the elderly and just about any other niche market imaginable. All these campaigns are aimed at luring new users into the market, and to a limited extent, they seem to be working.

The number of rolls shot each year has risen steadily, and is predicted to surge this year. However, since many pictures are being taken with less expensive cameras, the photo market as a whole is just holding steady at best.

Kodak, one of the most familiar brand names in the discount industry, has continued to hold its dominant market share at discount stores, despite an ever-increasing challenge from Fuji, which has made inroads among consumers.

This year, the total photo market at mass merchandisers is expected to reach $3.4 billion, reflecting a decline in camera price points. Discount department stores will garner $3.1 billion from the photo category in 1989, while catalog showroom chains will nab an estimated $0.3 billion.

Film sales should hold steady or rise slightly. Gross margin should rise very slightly, again due to the sales of cameras that are less expensive, but marginally more profitable per dollar.

At full-liners, photo products will turn 3.8 times annually and achieve a gross margin of 18 percent.

PHOTO : Photo at Target, Eagan, Minn.: Sales of inexpensive 35mm point-and-shoot cameras, some

PHOTO : priced under $20, have picked up as of late.