Photo dept. success stands on three legs - Target Stores - Target Power Merchandising

Discount Store News, April 18, 1994

Target relies heavily on photo finishing for the profitability of its photo category.

But where most discounters divorce camera and film from photo processing in considering the category, Target approaches the department as a continuous loop: cameras sell film, film sells photo finishing, and photo finishing in turn sells more cameras, as well as accessories such as camera cases and photo albums.

By attending to all three legs of the business, and determining success by total sales and gross margins on all three, Target maximizes its business. The same buyer is responsible for all aspects of the category and that has led to a better-than-average presentation in cameras. An operations person often runs photo finishing at other chains.

"We've always been solid in cameras," said senior vice president Bob Guelich, "and we're moving with the technology. We'll be adding switchable panorama cameras, for instance." Target now stocks a wide range of skus, from $10 entry level point-and-shoots to advanced Canon and Pentax models that sell just under $275. The chain also has been aggressive in film and film promotion. It stocks mainly Kodak, supplementing it with Fuji and its own Target brand in a classic three-level price point configuration. Lately Target has been including $10 worth of coupons good for processing discounts in its Kodak and Fuji three-packs, which are now the dominant film configuration.

Target has brought Windsor & Browne, the private label that has been spreading throughout the store in recent years, into photo with picture albums and kits that combine a Kodak camera with albums.

But Target has been slow to exploit the full potential of the photo-finishing business. While it devotes nearly half a gondola run to albums, tripods and camera cases, Target offers few value-added options for the photo-finishing customer.

Kmart, in contrast, is rolling out Image Centers that offer custom developing in one-hour photo labs, photo T-shirts and mugs, DIY enlargements, electronically monitored portrait studios, and digital processing. WalMart includes one-hour photo labs and portrait studios in all its new stores.

Target has been looking at Kodak's new Create-A-Print kiosks, Guelich said, but "while we like it, we don't plan on adding it, at least not yet."

Target added binoculars to the department years ago, and has increased offerings to 10 skus. most from Bushnell, its parent, Bausch & Lomb, and Jason. About one-third of the skus are new mini models.