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A picture is worth...a lot to retailers

Attention all retailers: Now is the time to get a photo kiosk in your store. We've heard about the self-serve technology for years, but now it is imperative to adopt it if you don't want to miss out on the digital revolution that's transforming the photo-finishing industry.

August 3, 2003

Attention all retailers: Now is the time to get a photo kiosk in your store. We've all heard about the self-serve technology for years, but now it is imperative to adopt it if you don't want to miss out on the digital revolution that's transforming the photo-finishing industry.

Chris Zimmerman, editor

Recent research studies have confirmed that mass-market consumers are buying digital cameras. That means Joe Shopper, not just technophiles, are investing in digital. And Joe will need a method for finishing his digital pictures. Most likely he will turn to his favorite retailers for printing and ordering options. Now having a photo kiosk is becoming an issue of satisfying your everyday customers by continuing to fill their needs.

Port Washington, N.Y-based NPD Group said that 88 percent of consumers it surveyed print their own photos, whether at home, online or through retailers. Of those who used a retailer to print their digital photos, 92 percent said they were very satisfied with the image quality. See related stories, "Photo kiosk, digital minilab sales to remain strong, study says," "Digital camera sales set to pass film camera buys in '03."

New research from Norwell, Mass.-based Info Trends Research Group shows that retailers realize that they need to offer printing for digital photos, but that they are relatively slow in making the huge investment in digital minilabs to replace old analog systems. Photo kiosks offer a perfect way to satisfy customers until that investment is in place.

Kerry Flatley, senior research analyst at Info Trends told KIOSKmarketplace that minilabs can cost $100,000 or even more, and require trained staff to manage in-house. Photo kiosks with printers, on the other hand, can go for about $20,000 and require no specially trained staff. Input terminals, often just a PC with touchscreen that lets customers place orders, can go for $10,000 or less.

Flatley said that her research found that retailers are getting aggressive in their adoption of photo kiosks. But she added that non-traditional retailers, like college stores, are still an untapped opportunity. She said she expects to see the average retailer employing at least two photo kiosks by 2007.

Flatley explained that consumers can put hundreds of photos on a memory card, but that they won't necessarily want to print them all. So they will need a way to choose what they want to print and then either make the prints or order them.

She said she is keeping a conservative point of view on the photo kiosks with printing capability that are popping up at Walt Disney World, malls and airports. "It will be interesting to see how these kiosks will play out in new channels."

The other interesting thing to watch is how the photo vendors are jockeying for position in the kiosk market. Kodak remains a leader, although Fujifilm is gaining share as retailers who purchased Frontier minilabs are also purchasing Aladdin and PrintPix kiosks, Flatley said.

Kodak is undergoing its own transformation as the giant company struggles to put is resources in the right place. The company just announced huge layoffs, but said it would not touch its latest acquisition, Applied Science Fiction Technologies Inc., which has rapid film processing technology called Digital PIC that could speed up Kodak's efforts in photo kiosks. See related story, "Kodak to cut jobs, leave photo kiosk division alone."

Sony is making waves as it enters new markets with its PictureStation solution. Fujifilm leads in unit shipments within the digital minilab market, but competition from Noritsu and Kodak is expected to heat up in 2003. Other vendors covered in the Info Trends forecast include Pixel Magic, Agfa, Olympus, Konica, Lucidiom, Mitsubishi, Digital Portal, Polaroid, Oblo, Whitech Software, and ePoint. See related story, "Speed is the killer for Polaroid kiosks."

Be on the lookout this September for new research on the photo kiosk market from analyst firm Summit Research Associates Inc. The report, "Kiosk Industry Sector Report -- Digital Photography," will study in-depth Kodak, Fuji, Sony, Agfa, Konica, Pixel Magic, Polaroid and several more companies. It will also offer case studies on the leading photo kiosks.

Francie Mendelsohn, Summit president, said her firm has tested each kiosk by printing the same two pictures at each and by letting the kiosk's editing defaults determine the picture quality.