Note: The opinions expressed here are those of Bill McCurry and are not those of Hewlett Packard or the Photo Marketing Association International. Following are major points from Bill McCurry’s research, sponsored by Hewlett Packard in support of The Complete Picture Inspiration Center at PMA 2006 in Orlando, FL. Jennifer refers to the target market determined by PMA to be the greatest consumer of consumer photographic hard copy images.

            “Jennifer” is real. She represents a target market segment known for years at HP as “Emily” and at NPD as “Samantha.” We’re told PMA dubbed her “Jennifer” because it sounds like “Gen X,” the age group she personifies, and because Jennifer is one of the most popular names of that generation. Whatever name we give it, the power of this group in our industry can’t be overlooked.

Manufacturers have repeatedly told Wall Street analysts about “imaging eco-systems” — how manufacturers lock in the revenue stream of retail customers to the exclusion of outsiders. Some manufacturers feel that once they’ve sold the customer a camera they own that customer forever. Furthermore, that customer should no longer be printing at a retailer. Instead, they should choose to print only at the manufacturer’s website.

HP looked at the customer research and determined this isn’t how Emily — or Jennifer or Samantha — wants to shop. HP believes customers want “choice, control and convenience.” This means they want to vary their printing methods depending on their personal schedules, the projects they’re working on, and the project’s importance. To facilitate this, HP will make all their retail photofinishing/printing options connect to Snapfish. This allows Jennifer complete control and, as a by-product, puts the single store on an equal footing with the mass retailers.

            The Snapfish option allows the customer to click on “pick up at retail” and, using their zip code, find the closest place to pick up their images. The customer can also go to an HP kiosk at a local retailer and access images they have previously stored at Snapfish.

Smaller retailers feel abused when web locators list giant mega-retailers first, even if they aren’t geographically closest to the customer. Kalle Marsal, HP’s Director of Marketing and Product Management for Retail Photo Solutions, rejected this customer unfriendly bias. When asked how the customer will be directed to their local retailer, he said the retailer “definitely will be listed by proximity/zip code as long as the location has the capability to process the specified order.” That’s good news to retailers tired of being in the shadow of the Best Boxes or the Wally Marts.

               HP exhibited two new “printing technologies” at PMA 2006. The first is their “Express” kiosk that will produce a print every five seconds. (The HP Express can produce one print every 5 seconds after the first print, which takes 18 seconds to cycle.) The second technology is the HP Photosmart Studio.

For HP to come into the kiosk market this late it had to have a product with unique attributes. We assess the market for the Express kiosk to be:

1. Those wanting an “express” kiosk – We hear from retailers with Kiosk Cafes (six or more stations) that having an express lane for 4x6 prints, without cropping or manipulation, adds to overall sales and customer satisfaction. Customers in a hurry and waiting impatiently for a kiosk to free up tend to make those who want more time at the kiosk very uncomfortable. An Express Line relieves the frustration of those time-challenged customers.

2. Those who want to expand beyond their existing store can use the HP Express
Station as a stand-alone vending unit. It’s intended to be self-sufficient and can produce 3,300 prints without needing an operator to refill supplies. The unit accepts credit cards, will “talk” to the “mother ship” and tell you when it will need refilling, what (if anything) is ailing it, and how sales have been. All this information can be yours from the comfort of your home, your office or any accessible web location. click on the image at right for a larger view of the Express Station       

            3. Those who believe that having Snapfish as a feeder for their lab will generate significant volume can install the Express kiosk even if they don’t install the Photosmart Studio.

Now, let’s shift our thinking beyond where retailers are today. Let’s look at today’s customers. Jennifer doesn’t see 4" x 6" as a piece of paper measuring 4 inches by 6 inches – only photo retailers think in such confined ways. Jennifer sees the traditional print as just one of many ways she can display, share, and store her images — just one way she can give a gift, decorate her home or archive her memories. She has moved beyond the limitations of the 4" x 6" size print and has welcomed printed photo albums, greeting cards, collage posters, rugs, blankets, and even the ubiquitous gifts like photo mouse pad, photo T-shirt, and photo mug. As imaging retailers we need to be able to deliver these products — and more — to her, when and where she wants them, and at a price/value proposition she finds compelling.

The money-making concept for most retailers is the HP Photosmart Studio — a kiosk that can produce hard copy prints in a variety of formats/styles beyond 4" x 6". (At present, 4" x 6" from this system isn’t an option. Don’t be surprised if you see it added at some time in a future generation of the system.)

This unit is available in different configurations to allow on- site production of various imaging products.

The first thing we noticed was the enthusiastic consumer acceptance. One customer we interviewed, Linda Clark of San Diego, actually told us she had waited all her life for such a machine. This statement is a marketing manager’s dream. While we doubt too many women feel their life unfilled because of the absence of the Studio, it is a machine that will change the life of many women who are their family’s CMO (Chief Memory Officer).

            One woman, who didn’t want to be identified, was given the opportunity to purchase a 300-photo album selling at half-off because the retailer was discontinuing it. Her response, “I never want to see another 300-photo album in my life!” Shocking words to the imaging industry. However, the same woman eagerly embraced the HP technology that allows her to insert her pictures into a kiosk (or store them on-line) and instantly populates an album with them. She’s not rebelling against albums, she’s screaming for help in her time-starved world. She’ll embrace the concept of albums as long as it doesn’t take her too much time to assemble them.

            The joy customers feel when opening their finishing envelope and seeing their pictures for the first time hasn’t existed in the digital world. Now it’s back. When customers see their collage posters or albums for the first time, it’s as if they’re reliving the moment the image was taken. They are again captivated by the joy of their family’s memories. It’s a powerful emotion for our customers.

            We were told by some Jennifers that a side benefit of what the HP systems is the return of image control to the female in the family. Now Mom doesn’t have to wait for someone else to print the pictures hidden/locked away on the computer/CD/memory card. She can come to her photo retailer with her digital images and get them printed however/whenever she wants. Truly, these women feel, control has shifted back to Mom and with it, the increased number of prints she makes compared to the male of the species. It is dangerous to assume these women speak for all because there are large numbers of women who are more technically competent than their male counterparts are.

In our tests of the Studio System, we used a CD with approximately 200 family pictures shot by the McCurry adult kids and their spouses. All images were on 3 mega pixel (or less) cameras. All were shot by amateurs so they had all the traditional failings of unprofessional photography. For each product, the complete order went through the kiosk in 10 minutes or less, including searching for the right picture(s) on the CD. The software automatically realigned the verticals with no intervention by the user. For photo albums, calendars and montages the software also determined which images were the most important. The software was at least comparable to what a human would have done and it accomplished the tasks in much less time.

            Some long-time photo industry veterans will say the HP software is too simple, not allowing enough control by the user. We found a surprisingly large number of people who were thrilled with the potential of having the machine make all the decisions. They didn’t want to have 500 to 1,000 choices to make for every album. At this point in their digital lives, the customers we talked to had no interest in spending 20-60 minutes (or more) to lay out an album. There may come a time when they’re willing to put in the extra work, but today they’re in a hurry and appreciate the fact HP’s software does it for them.

            Off the record, we heard from kiosk and on-line providers that way more than half the albums started are never finished. In many cases, the customer will have hours invested in the creation of the album and then just give up. While there might be some, we’re not aware of any customers who abandoned an album on the HP Studio system due to the 10 minutes or less it took to complete the process.

            When HP retained us, it was clear they wouldn’t dictate what our remarks to the PMA audiences would be. It was our choice to ask Dan Kinsley (now of HP – you may remember him from his long career with Agfa) to review our findings and ensure we were quoting the correct facts about the machines, plus provide input from HP’s research. We had lunch on the Thursday before PMA at the Bahama Breeze a mile from the Orlando Convention Center. More accurately, we tried to have lunch.

            We had spread out the samples on our lunch table. Janet Herrington was our server. She saw the piles of photo products and asked what we were doing. Those of you who know Dan Kinsley know he’ll never pass up a chance to give a sales pitch. So he explained each of the Studio products to Janet. After about 10 minutes, the icy stares from other patrons in the restaurant reminded us that Janet was there to wait on tables and she beat a hasty retreat to take other customers’ lunch orders.

Two minutes later another server, Shannon Tarrant, arrived at our table asking to see all the “neat photo stuff” Janet told her about. Once again, Dan went through his sales presentations. Shannon had to leave but she sent over Mandy Chamberd to see all the fun things we had. Janet dropped by again to show Mandy her favorite products. Janet did a better job of instilling the joy of photography in Mandy than either Dan or I could do. Janet went back to work. Before Mandy left, Cody Howard arrived. Shannon had sent him over.

Dan Kinsley, Janet Herrington and Shannon Tarrant look at albums produced by the new HP Photosmart Studio during lunch at the Bahama Breeze in Orlando. This was a ‘candid’ shot, unposed.

Dan Kinsley, Cody Howard and Mandy Chamberd pose with new HP products at the Bahama Breeze restaurant. A total of four restaurant wait staff fussed over the new products and gave input on how they would definitely use the products now available.

            Bottom line to the lunch visit? It started with one person igniting the passions of three others so we now have four passionate consumers waiting for an HP Studio in their neighborhood. It’s important to note that the oldest person was 23 and none was married. Their projected uses for the machine were as varied as their backgrounds. Cody, the only male in the group, wants calendars that will start in the middle of the year (July) for his college buddies. Mandy is looking to create home décor with the posters. Shannon wants to create bride-and-groom history books as gifts for those attending a friend’s wedding. Janet wants books of her students and their activities when she starts teaching school.

            The marketing lesson here is that all we did was expose four people to what the Studio will do. They fit the products into their own lives and got excited. We must learn to get out of our customer’s way. They will envision more uses for the Studio’s output than we ever could.

            One product that will be an instant boost to the customer’s “market basket” (or “Individual Average Transaction” if you prefer that terminology) is the Studio’s transfer of images to CD. The CD is delivered in a case with a picture on the front cover – plus a booklet showing each image. One industry veteran describes the booklet as “a 35mm contact sheet that fits in the CD case.” The image sizes are about the same as a 35mm image and the software automatically corrects the verticals for proper orientation. This sleeper product will generate immediate sales and widespread consumer acceptance, instantly setting your lab apart from the competition.

            We’ve all heard of “Moore’s Law” (from Gordon E. Moore, co-founder of Intel), which states processing speed will double every 18 months. But what about the “Digital Is More Law?” This was the promise our industry gave to the consumer. Digital Will Do More for you. The only thing “more” that most consumers have seen from digital is more 4" x 6" sized prints. However, today we can deliver more products with which they can celebrate the joy of photography — products that customers will want, will use and will treasure.

            Each customer who used the Studio during our test period was asked to fill out a survey. One San Diego woman stated that every attribute of the machine was “Excellent,” but when asked it she would tell a friend about it, she emphatically said "No!" Obviously, we asked why she rated the process so highly but wouldn’t recommend it. Her answer was a retailer’s delight. “I’ll be coming back frequently and I don’t want a line at the machine.”

            Finally, the promise of Digital Without Drudgery is here. Whether you call your target market Jennifer or Emily or Samantha, you can be certain she’ll be excited and she’ll be back to buy more.
 

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