With the introduction of an online printing solution supplied by Canadian outfit Dakis, a marketing support program from US photo specialist group IPI, and a range of accessories from US buying group PRO, the changes were clearly being rung at the Camera House annual general meeting and conference in late October.
Photo Counter spoke to Camera House general manager Paul Shearer about these developments and the immediate future of the local photo specialist retailing scene.
Horses for courses
Paul Shearer explained that the Dakis, IPI and ProMaster decisions were examples of a new approach. Instead of looking to one supplier to fulfil all Camera Houses’ needs for hardware, consumables and software, the group would select the best solution available from a range of competing options.
‘This isn’t an IPI campaign, it’s not a Fuji campaign, it’s not a Dakis campaign. It’s about 10 little bits which are excellent in these companies, and we’re pulling one bit out of each company to give us the very best solution. Because one system is not tailored for everyone,’ he said.
‘So now we are saying let’s find the best software. Let’s introduce ProMaster in there. We’ll take bits from separate organisations and we’ll find what’s best suited to our business, rather than relay on the total support of, say, a Kodak.
‘It’s not supporting Mitsubishi and it’s not not supporting Fuji. This is nothing like that. Whereas before we had a turnkey one-only solution, we are now throwing other parts in. It’s about having the best available.
Along with this comes a preparedness to adapt when something better comes along.
‘We could pull in Whitech’s photo album creator and have that as our photo album creator although our platform is based on Dakis,’ he explained.
He pointed out that while it was fine for a Big W to have ‘the same solution and the same everything in every store’, Camera House was comprised of ‘100 different independent retailers all having different needs.’
Looking at the competitive scene, Mr Shearer also emphasised that Camera House also had some unique challenges as a national group with a range of competitors who had strengths in one geographic area.
‘We base our smarts on a lot of market knowledge. We pay a lot of money for reports which tell us what models are being marketed at what price – and who by. And the consistency of them.
‘You have to do it nationally. So our problem is 70 to 80 percent of our business is not just based in Victoria. It’s easy to determine market activities in one state.
‘In NSW we’ve got a big CE retailer as a competitor. WA still have Retravision, SA have Radio Rentals which are incredibly strong. They all market differently, and we have to make sure that the retailers in those areas are not effected when camera manufacturers or Canon or anyone go to CE retailer with this camera, another NSW-based retailer with this other camera, and Camera House with another camera. Then in other states it might be completely reversed. So whatever they went to someone with in NSW, they need to find somewhere else to put it in another state.’
He said that there was a real opportunity in printing services, as activity from the two major discounters in printing potentially waned, and Camera House had plans to increase its printing activity.
‘I do believe the others will slow down – it’s becoming harder for them and more expensive. Photo in Big W and Harveys has a massive footprint and high costs . Do you think they make a lot of money?’
When it comes to suppliers competing with Camera House, Mr Shearer would rather they didn’t:
‘Manufacturers with online sites – they are another competitor. Would I like them not to do it? Yes. Can I stop them from doing it? No. Does the consumer wish in some way to do that [buy direct from the supplier] ? A small percentage, yes.
‘If they didn’t do it it would be fantastic but it would also be fantastic if JB HiFi didn’t sell cameras!
‘If consumers wish to buy from the manufacturer they will. And I don’t agree with it. I think it is wrong.
He also said that retailers confusing the public about price was part of the reason consumers might be attracted to buying from a supplier.
‘The consumer doesn’t know the price of anything. They have no idea any more of what the cost of anything is. And with price confusion you are actually causing distrust. In some CE discounters you don’t know if you buy in there whether the price will be marked down tomorrow.
On the other hand, ‘They feel they are getting a realistic price by buying from Canon. Not only are they getting a realistic price they are getting a global price.
‘Canon is not alone – Sony is just as proactive online,’ he added. ‘Globally most companies already do it. Is it successful? Well they don’t report that, do they?’
He said that the collapse of the compact market was an opportunity for photo specialists, as mass market competitors not only pulled back on printing, but withdrew from camera sales.
‘It was wonderful when they were selling 20,000 $99 cameras in 60 days. They made $5 a camera so they picked up $100,000 profit for nothing. They didn’t do anything. Those days are gone.
‘There’s no $99 or $69 volume market in anything.
‘The next 12 months will hold the greatest opportunity we’ve had in most probably five years,’ he said. As the average selling price of cameras rises, it becomes a more considered purchase, he noted.
‘At $149, $169 $229 – did it matter what camera you got?’ But with an average selling price around $500, consumers are more willing to research their purchase and seek expert advice.
‘”Why should I be buying this? Why should I buy the Fuji X Pro in lieu of the Sony A7?” The good thing is that there’s lots of new technology, lots of high dollars, so consumers want to go and get reasonable advice from someone with knowledge.’
He added that the more recent decline in the DSLR market (see separate story) was also contributing to mass market competitors being less inclined to devote floor space, marketing and services to the photography category.
The ProMaster initiative
The most controversial step Camera House made was to bring its distribution of ProMaster accessories from trial stage to group-wide availability. It was suggested to Paul Shearer that this has not been welcomed by existing Australian-based accessory suppliers.
‘We worked with suppliers and communicated for a long time to get more margin at retail,’ he said.
‘Ultimately hardware is getting harder and harder because of global pricing. But if we drop margin on hardware we still need margin to run our businesses, so we had to find more margin in other products.’