Bigger isn’t better: The trouble with photo retail

The news Canadian carrier Telus was shuttering the remnant of the venerable Black Photo brand in Canada, with the last 59 stores closing in August, sent shockwaves to long-time photo-industry executives. For a U.S. person, it’s hard to understand the impact of Black’s Photo on the Canadian market. The slogan “Black’s IS Photography” wasn’t just a slogan. Canadians believed it. For decades, Black’s was the second biggest film brand in Canada, behind Kodak. Over more than 80 years, Black’s evolved from a wholesale photofinisher to a publicly traded national one-hour photo/camera store chain. After years of tough times, including the departure of the Black family from the company, the business was sold to Telus for C$28 million. Black Photo will soon be gone (unless the assets are purchased).

The causes of Black Photo’s struggles can be debated endlessly. Was a telco really the best parent company? How well did Telus manage the shift to photo gifting and ancillary products, as film declined? Did Black Photo have a successful online strategy?

Irregardless of the reasons, the closure of Black Photo brings with it the realization the brick-and-mortar photo-retail category is struggling mightily. With the impending closure of Black Photo and the bankruptcy of Ritz Camera and Imaging in the United States in 2012, there are no national photo specialty chains in North America. There are several regional players — like Mike’s Camera, Boulder, Colo., Henry’s, Windsor, Ontario, and Creve Coeur Camera, Creve Coeur, Mo. — plus superstores like Samy’s Camera, Unique Photo, B&H Photo and Adorama. Even the well-publicized industry innovator Polaroid Fotobar is struggling. Just this week, the upstart boutique chain closed its last California store. Add to that the many local mom-and-pops hanging in there, and you have a picture of a category facing challenges.

Local is more than just having a storefront

A recent Bloomberg article, “Twilight of One-Hour Photo, America’s Fastest-Fading Business”, painted a rather bleak picture of the photo industry. Focusing on U.S. Census data, the article stated: “The U.S. counted just 190 one-hour photo shops in 2013, according to new Census data, down from 3,066 in 1998. Extinction looms over other retail niches oriented around analog media. The number of newsstands dropped by nearly half over the past 15 years, and video-rental stores dwindled by 85 percent. But nothing can rival the 94 percent death rate for America’s photo-processing shops, which are vanishing faster than all business categories tracked in the Census.”

In an attempt to make a point the decline of analog-based businesses, the author, Patrick Clark, made a significant comparison error. It’s not the fact the film business involved physical media that lead to it’s decline; if that were the case, music CD sales would still be climbing and there would still be video-rental stores on every corner. Digital wasn’t the only factor contributing to the decline of film; cost, waste and convenience played a role, too. Every film exposure costs money, whether the picture turns out or not. Consumers had to wait to see their precious memories, and often had to pay for pictures they didn’t want. If they wanted reprints, enlargements or custom products, consumers had to engage in an arduous process of selecting negatives. This was not convenient or economical.

Consumers never asked for 4-by-6 prints; they took what the industry gave them.

On the other hand, digital photography now gives consumers more choices over what to do with their photos. Consumers never asked for 4-by-6 prints; they took what the industry gave them. Photofinishers offered 4-by-6 prints because the paper suppliers made photo paper in 6-inch wide rolls. These were production-driven decisions, not demand-driven or marketing decisions.

Digital photography, however, is more marketing driven than ever. Consumers are faced with an incredible array of choices for photo output – from simple prints to collage posters. They can print their image on porcelain, metal or canvas. They can print not only their memories but also can completely decorate their home with their own personal photos. Or they can choose not to print their photos at all.

In that sense, it’s important for retailers to know their market more than ever, especially when dealing with consumers’ precious memories. I talk to many successful photo entrepreneurs, both online and brick-and-mortar, and the common thread among them is a focus on “local”, not “big.” Even those retailers with substantial operations are working very hard to bring that “mom-and-pop” flavor to their stores.

Retailers of all sizes are working to be “local retailers,” according to Jacqueline Renfrow, writing at FierceRetail: “Hyper-local is a buzzword being uttered at every retail conference in 2015 because retailers are discovering that using technology in-store may be the answer to reviving the downward trend in physical stores. If brick-and-mortar wants to maintain its stronghold over online sales—90 percent of all transactions are still done in the physical store—physical locations will need to start taking advantage of technology as an in-store traffic driver.”

Whatever the future of photo retail becomes, my bet it will be more locally focused than ever.