Kodak's co-branded concept hits NYC

Drug Store News, Sept 8, 1997

NEW YORK - Eastman Kodak is kicking off the latest phase of its co-branded retail initiative here last month with the grand opening of the Kodak Image Center Solutions/Alkit Image Express (formerly Alkit Camera) in midtown Manhattan. The store is the 42nd store in the year-old program, which includes 41 stores in the CPI/Fox photo chain.

Around the country, there are about 200 retail applicants in the development stage, according to Terry McArdle, manager of public relations for Eastman Kodak consumer imaging. When the program is fully rolled out, it could total as many as 500 co-branded sites over the next five years.

Under the co-branded agreement, specialty photo dealers receive discounts on fixtures, and are offered displays and promotions, marketing advice and training from Kodak. In return they must carry a full line of Kodak cameras and film.

The program also requires participating stores to offer 80 percent Kodak products and 20 percent other brands in film, although the 80-20 rule does not apply to products where Kodak is not a major provider, such as SLR cameras. In the hotly competitive film market, Kodak holds a 60-plus percent share and Fuji has around 12 percent in the United States.

The program, designed to promote one-stop photo imaging and gift shopping, includes digital enlarging/copying/image manipulation machines, such as the Kodak Image Magic CopyPrint Station, and Kodak frames and other photo gift service.

Although currently the program is designed for specialty photo dealers, McArdle explained that the program "does not preclude any class of trade. We're trying to get some numbers and a sense of performance before we go after the rest of classes of trade with any. proposal."

So far, there are no mass retailers participating in the program. Al Steinman, general manager and vice president of retail for Eastman Kodak Consumer Imaging, who is responsible for the co-branded program, told Drug Store News, "We are not at the point where we have anything specific for food, drug or mass." He noted that dealers in the program so far are seeing increases in sales of as much as 50 percent, compared to the same six-month period of the previous year.

One photo category manager for a major drug chain (which operates stores outside the New York market) told Drug Store News, "I suppose if I was a little guy, I'd feel more threatened." He views the program as a way for Kodak to sell its concepts. "They're saying, `Here's how it can be done.'"

Evette Venable, media specialist for Walgreens, said that the chain does not expect Kodak's co-branded program to affect Walgreens, either. "We feel it will cater to a high-end user and advanced amateur or professional who will go to a Wolf or Fox [specialty, retail chain]. A co-branded store wouldn't affect us because we're focused on customer convenience."