Drug chains eagerly waiting for APS

Drug Store News, Feb 12, 1996

The Advanced Photo System (APS) may not generate sudden, dramatic sales in drug chains like a hot Rx-to-OTC switch. But it is expected to be a slow build, beginning this spring, with momentum rising in the fourth quarter and continuing into 1997.

How much momentum is built--and how soon--depends on how fast consumers trade up from 35 mm or other cameras to APS cameras. Fourth quarter is expected to do well, when many cameras are likely to purchased as gifts. APS hinges on selling cameras, of course, since the new film is not interchangeable with other cameras and other film cannot be used in APS cameras.

At the annual Photo Marketing Association (PMA) show in Las Vegas this month, the five licensors of APS (Kodak, Fuji, Nikon, Minolta and Canon) and more than 40 manufacturer licensees will show their APS-related product--everything from cameras and accessories to new format photo albums.

The most visible appeal of APS is the leaderless and foolproof film cassette, which drops into the new and smaller APS cameras; the color index print in lieu of hard-to-see (and easy to lose) negatives, making reprint and enlargement selection easier; and the new views of easier, and the new views of "aspects" in the APS cameras, including panoramic, group and classic, which are especially actionable by the consumer depending on the type of photo opportunity, ranging from a landscape to a kids party.

Other features sure to be appreciated by consumers are the improved picture quality and more digital creative uses due to optical and magnetic coding on the new film.

Survey rankings

There is still a whiff of skepticism by photo retailers in all channels. A Kodak-sponsored survey of photo industry members this fall showed that around 75 percent feel that APS will positively impact the entire industry. Five percent were pessimistic, and 10 percent each were split between "undecided" and "neutral."

Fuji Photo senior vice president Ted McGrath, in a recent speech, pointed Out the importance of converting young people to photography. Although younger consumers like one-time-use cameras for their no-hassle advantages, "single-use cameras, by themselves, are not enough," said McGrath. "As an industry, we need to work together to promote Advanced Photo System ... not sit back and allow the world to pass us by."

One concern of drug chains is that although APS will mean higher rings, will they be too high in the photoprocessing package? Manufacturers (who at press time had not yet divulged final details of APS) assure us that pricing will be consumer friendly.

Focus on business

Drug chains are looking for more ways to boost photo department business. As drug chain buyers anticipate the forthcoming details of APS, most buyers would agree with John Hilbert of Snyder Drug: "No doubt it will be successful long-term. There are too many big players--they will find a way to make it work "

Despite the flap, an NCL spokeswoman reported that the company's bookings remained at record levels.

Richard Molander of Travel of America, Baldwin Park, Calif., was among those who said that he had suffered damages. He said that he wrote a letter to president Adam Aron containing several "demands" for remedial action.

He declined to furnish a copy but said, "I feel NCL has to make some kind of financial settlement to the agents who were harmed."

Aron declined to comment.

Travel of America's mailing list contains several thousand RCL client addresses, the executive said.

"When NCL provided those names to competitors, it's as if somebody had gone through our files and picked out the names of our best customers."

The executive estimated his losses "in the hundreds of thousands of dollars."

Molander said his firm not only lost pending bookings on RCL but also bookings on competing lines such as Holland America, Princess and Royal Caribbean.

"Because the offers by our competitors were so low, we had a whole series of cancellations from people we had booked on other cruise line he said.

The executive said he believes the damage is long-term now the customers of others."

In addition to demanding financial compensation, Molander said he is asking NCL to announce that the list was provided to competitors for one-time use and that subsequent use of the names would be a violation of NCL's contract with the marketers.

In addition, Molander said he is demanding that NCL disclose all the marketers who received the RCL list.

"It's important that the people who have suffered the damages know what and who they're up against," he said.

He said he would sue on behalf of himself and others if the demands were not met.

Rick Kaplan of Cruise Masters in Los Angeles said he is asking NCL to make financial compensation for up to 10 lost bookings.

He said the damage is irreparable because NCL's reservations department informed him that no space exists for him to rebook his clients on their preferred dates.

"Unless NCL makes good the losses, we are considering a class-action suit on the grounds that NCL interfered with a contract right that exists between this agency and the people we do business with," he said.