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Predicting the future of photo kiosks

July 10, 2012

Photo kiosks were once a hot retail topic. They were a way for retailers to fuel foot traffic and to provide an array of profitable services in a limited amount of floor space. In recent years, however, enthusiasm has waned as overall category print volume has declined and growth items, including photo cards, photo books and gifts, are still not a big self-serve item.

It's no secret the commitment by large drug chains and mass retailers to on-site photo kiosks is wavering. Major vendors express concern that if one of the big players -- Wal-Mart, Walgreen's, CVS, Rite-Aid, Target, etc. -- cut their photo departments more drastically, others will follow suit. Remember when Wegman's, the leading Rochester, N.Y.-based grocery chain, dropped in-store photo completely? In the grocery channel, Wegman's is seen as an innovator and a leader; once they dropped in-store photo, that sent a signal to other grocery stores that it was okay to drop their programs too. (If there's one thing to say about large chain stores is that most of them are followers, not leaders, but that's another blog topic.)

Add to this the precarious position of kiosk leader Eastman Kodak Co. Retail photo is one area the Rochester, N.Y., company is retaining while undergoing Chapter 11 bankruptcy; the company has otherwise jettisoned digital devices (cameras and frames) and online services. Without the full portfolio of services, it's uncertain if Kodak can retain a leadership role in the kiosk business.

Among major vendors, that leaves Lucidiom, Fujfilm and HP as Kodak's top-tier competitors. DNP Photo is also player. If the chain stores start offering only online ordering, evicting their in-store dry labs and kiosks, the number of vendors may decline.

The compelling challenge of photo kiosk vendors is to build a better business case, based on total engagement, not just prints. Some vendors, like Lucidiom and Kodak, allow for the creation of video picture montages on disc. That's one step, but it's clear this offering isn't a home run.

The real competition for kiosks is online ordering, especially now that smartphones and tablets can upload images directly to websites in the background. This is a real convenience to time-starved consumers. Many kiosks have offered Bluetooth connectivity, but this has proven to be slow and difficult for most consumers. A better option is to offer iPod and/or mini-USB cords to let consumers directly access their smartphone images. Look for kiosks to also add more online connectivity options.