Retail Observer

RETAILOBSERVER.COM APRIL 2015 50 RO Michael Nadeau Consumer Electronics Trends NEW PROFITS IN PHOTOFINISHING: WHERE BIGGER IS BETTER T imes are tough for photo retailers. Smartphone's have eroded sales of cameras, and margins on these products have shrunk to the low teens. Some photo chains, electronics chains and independent photo stores have given up and shut their doors. But smart photo retailers are finding growth and profits by transforming their photofinishing services into a new, high-end profit center. Consider: • Margins on large-format prints range from 40 to 60 percent. • The range of sizes and variety of substrates—from metallic papers, rag paper and canvas to acrylic and metal—has exploded. • Prices can range from under $100 to over $1,000. • The Canadian overall photofinishing market is growing at a compound annual rate of 10 percent (2013—2015)*. • Wall décor –large-format wall art, wallpaper, stickers, wall clings and more—is the fastest growing photofinishing category, forecast to grow from 16 percent in 2012 to 18 percent in 2015, ahead of personalized photo products (like t-shirts and mugs), books and albums, cards and calendars*. What's driving the growth? Creativity and technology. Everyone has a digital or smartphone camera these days and they are taking billions of photos. If only a small percentage of these digital photos get printed in large format, the numbers will far surpass what photofinishing produced at its peak, when people printed almost all of their snaps. New, easy-to-use software lets amateur photographers turn their photos into pieces of art that they can hang on their walls, turn into one-of-kind wallpaper, decals, posters, banners, panoramas, or window coverings. The possibilities are endless. When you add such high-margin extras as framing, mounting and laminating, the final ticket gets even more lucrative. What's more, retailers only need one large, high-tech printer in their shop to print almost anything. And if it's something they can't or would rather not do in-house printing on aluminum or acrylic, perhaps–they can outsource. Cantrex Nationwide, for example, recently signed an agreement with a specialist who can print virtually anything–and at price points that still net our dealers up to 60 percent margins. This supplier also provides sample kits to mount in-store so dealers can show their customers what's possible. And that's key to getting the business. Photo C.D.M. of St. Jérome, Québec, has been offering large-format prints since 2007. But when they enlarged their selection of papers and put up an impressive display wall last year to showcase the wide variety of large-format prints they offer, their photofinishing sales jumped 20%."We show prints 16 in. by 24 in. to 30 in. by 40 in. on our walls, but we can print up to 44 in. wide and as many feet long as you like," says Samuel Lafontaine, Photo C.D.M.'s manager and co-owner. Metallic paper and canvas are very popular with his customers, with 99 percent of canvas prints purchased stretched on a frame, ready to wall mount. "Although large-format prints represent a small percentage of our overall sales," says Lafontaine, "it's an important part of our business because the margins are so much higher." To take advantage of this profitable trend, retailers need to get back to basics and promote their high-end printing services, both online and in traditional media—and ensure they offer as many products as possible. Photo EXPERT in Delta, British Columbia, promotes its wide range of print sizes and media on its website, in print advertising, and in direct e-mail to its customer database, and has seen sales rise 30% per year in the past two years. In addition to the retail trade, it also targets the commercial market, where printed signs, tradeshow banners and oversize prints can be marketing tools or a way to redecorate. It can produce prints as large as 3 ft. by 10 ft., in fine art giclée, on canvas, on rag, satin or glossy paper. It offers custom framing, canvas stretching, mounting, laminating and other finishing services, online ordering and shipping. "We're concentrating our efforts on selling more of the larger prints because of their higher ticket price, and higher value," says Brad Morris, Photo EXPERT's owner and general manager. "We're investing resources to upgrade our website because this service is an important contributor to profits. We're bullish on large-format printing. We're convinced it will be a growth category for years to come." Michel Nadeau Purchasing Manager, Photography Cantrex Nationwide

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