OPPORTUNITY AND RISK IN THE PHOTOGRAPHIC MARKET
Imaging Summit 2013: GfK and industry experts exchange ideas
Nuremberg, 2 December 2013 – The international photographic sector
will convene for the fifteenth time in Nuremberg on 2 and 3 December.
Around 150 well-known retail, industry and press representatives will
meet at the Imaging Summit to discuss the opportunities and risks to be
found in the photographic market. The Japanese photo market in
particular is considered an indicator for global trends. However, the
experts all already agree on one point: images are the number one means
of communication worldwide.
Global development in the imaging market has been strongly influenced
by smartphones, particularly as a result of technical improvements in the
field of videography. Many consumers now use their smartphone to take
pictures and film videos spontaneously, and then share them with friends
on social media platforms. This applies most of all to the younger
generation. Certain market segments in the digital camera industry
around the world have suffered a major slump as a result. One product
range to feel the effects has been the compact camera, the technical
features of which are comparable to those of a smartphone.
However, one side-effect of this that should not be underestimated is that
smartphones with built-in cameras have caused a greater number of
young consumers to become acquainted with the concept of photography.
They also then increasingly go on to buy high-quality products. GfK is
seeing significant growth worldwide in sales of cameras with an
interchangeable lens, such as single-lens reflex cameras and compact
system cameras. A rise has also been observed in compact cameras,
which display images in high quality and come equipped with a widereaching zoom function as well as an image sensor.
Often the forerunner for global technological trends, increases are
currently being reported in Japan not just in the high-tech top segments of
the SLR market, but also in very low-price, entry-level compact cameras
and the lower-price SLR camera segments. Depending on consumer type
and the devices already owned, there is major sales potential in this area.
Japan is also an example of this: sales of single-lens reflex cameras
increased by 35 percent year-on-year in the period from January to
October 2013. In relation to this, sales of interchangeable lenses
increased by a total of 34 percent. These developments not only support
sales in Japan, but also around the world, both in specialist photography
stores and online.
Image communication is not just changing because of smartphones:
cameras’ WiFi capability has also played a major part. This feature
allows data to be communicated quickly, which firmly establishes
photographs as the number one means of communication.
Imaging Summit
The Imaging Summit is a collaborative event between GfK and photokina
organizers Koelnmesse and The Imaging Association (PhotoindustrieVerband). Since 1983, representatives from industry and retail have been
meeting every two years to discover and exchange information on
interna-tional data and trends in the imaging segment. The Imaging
Summit 2013 will take place on 2-3 December at the Museum für
Kommunikation (Communication Museum) in Nuremberg.
Further information can be found on the website
http://www.gfk.com/Imaging-Summit-2013
Global Market Trends – A Summary for the 2013 Imaging
Summit
Worldwide, sales of digital cameras are coming under serious pressure.
From the beginning of 2013 through to September, volume sales in the
digital camera market declined by 17% (excluding North America) and
the cause of this fall is often seen as being the smartphone.
That is a relevant point, particularly as the image capture functionalities
of smartphones are increasingly improving and mostly probably generate
satisfactory results for the consumer. In addition to these smartphones, it
is also necessary to keep in mind that a very large number of households
already own digital cameras, with worldwide sales of 120 to 140 million
per year over the last five years, so that a large proportion of the demand
has been met. This is even more important when one considers that when
the analogue market was at its peak, between 60 and 70 million analogue
cameras were sold per year. This means that today as in the past, nearly
twice as many digital cameras have been sold as when the market for
analogue cameras was at its best. As a result of the impact of
smartphones, the nature of worldwide demand has been changing.
Compact cameras, which do not have a powerful optical zoom and have
very similar features to smartphones, are increasingly losing their place in
the market, while cameras with a long zoom, Wi-Fi functionality and
powerful sensors, in other words which promise good, high-quality
photos, continue to enjoy high demand. In addition to that, a clear trend
in the market must be recognised towards interchangeable lens cameras.
That is a market which in 2013 has been growing by over 10%. This
makes it possible to put forward the hypothesis that worldwide,
smartphones have been attracting more consumers into photography. That
applies to both still and moving images and means that many more videos
are being made today than previously with camcorders. In addition to
that, the demand for cameras with interchangeable lenses is growing. If
developments in Japan are considered, we see that the SLR market there
grew by 35% in the first nine months of 2013. What is interesting, is that
the phenomenon is not just among the top-end cameras where sales are
growing, but also among the entry-level cameras, i.e. the more simple,
less expensive SLR cameras. So it seems that the consumer is
undertaking what one could call an upgrade into single-lens-reflex
technology, and is in this sector choosing relatively simple entry-level
cameras. In addition to this development, it can be seen in Japan that
while sales of compact cameras are still in decline, the rate of decline is
less sharp than in the previous year. In Japan it can also be observed that
with compact cameras, it is not only the upper market segment, where
there is solid growth, but also in the under 100 euros market segment, i.e.
among entry-level compact cameras. This can firstly be explained by
smartphones being “personalised products” and as a result they will not
be handed over to other friends or family members. For this purpose, an
additional low-priced cameras will be used, which as a result of technical
development, will mostly generate first-class picture-quality. A consumer
study which has just been completed in the Japanese market, says that
currently the motivation to buy a camera in addition to a smartphone, lies
with the lower picture quality of photos from smartphones, the short
battery life and their complexity in use, as well the poor optical quality of
the zoom and the slow autofocus. In contrast to that, it is in particular
these aspects of quality which motivate consumers to buy a digital
camera. In addition to the above features, which are missing on
smartphones, the resolution of the sensor and the price particularly come
in for mention – in other words, cameras have now come to look more
attractive in terms of price than smartphones.
Worldwide, there is a huge challenge for retailers to take profitable
advantage of these changed circumstances and to participate in the
growing communications market.
As another camera shop falls by the wayside, and with numbers halving in two
years, UK stores are having to fight back. News editor Chris Cheesman reports
AP VIDEO REPORT (above): Can Britain’s high-street stores survive? Is ‘clickand-collect’ key to the future?
You know what it’s like. It seems far less hassle to order gadgets from a comfy sofa at
home than trek down to the nearest high street.
Whether it’s the weekly shop or buying a new camera, many take to the web to weigh
up their options.
More than a third of all camera sales in Britain were made online in 2013, according
to market research firm GfK.
Yet online’s share could be as high as 50% when ‘click & collect’ purchases – a
booming area of the market – are added to the mix.
In recent years, high-street shops have faced a double whammy as their plight has
been compounded by falling demand for cameras.
UK camera shipments fell 31% in 2013, according to Futuresource Consulting, and
it’s unlikely to improve any time soon with UK demand expected to drop 25% this
year.
European picture
The two-pronged attack has left its mark across Europe. Britain,
France, Italy and Germany saw a 40% drop in photo-retail outlets between 2002 and
2011.
In the following two years, Britain alone lost around half its camera shops,
accelerated by the closure of 19 Jacobs stores in 2012 and 187 Jessops outlets, under
former owners, seven months later. Numbers dropped from more than 700 in mid2011, to around 340 last year.
The latest casualty is Morris Photographic Centre, which ceased trading and shut
down its base in Chipping Norton, Oxfordshire, after running into financial trouble
earlier this month.
The 35-year-old business – which sold photographic equipment in-store and online –
attributed its demise to a ‘hostile retail market’ that led to ‘falling profits on a yearly
basis’.
Source GfK
There has been an ‘evolutionary shift’ towards mass-market retailers, driven by the
likes of John Lewis, Tesco, Asda, Argos and Amazon, according to Simon Bryant,
head of consumer electronics at Futuresource Consulting, who says the change in the
photographic retail landscape has been nothing short of dramatic.
Last year, more than half of cameras sold online in the UK were bought through
‘multi-channel’ retailers such as John Lewis. Yet the high street remains a powerful
force and the future is promising.
Reader poll
The high street made up two-thirds of camera sales in 2013. And a
recent Amateur Photographer (AP) reader poll, conducted online, found that 25% still
prefer to deal with retailers face to face.
More than a quarter of around 900 readers who responded said they preferred to shop
online because it is more convenient and/or cheaper, while another 20% said that
where they shop would depend on price.
Richard Gardner, a London Camera Exchange (LCE) customer, said: ‘I prefer buying
through the high street, largely because I can look at what I am buying beforehand.’
Fellow LCE customer Ander McIntyre, a London-based professional who has
photographed 40 presidents and heads of state, prefers face-to-face contact to an
‘anonymous’ internet operation, citing helpful staff at LCE, Calumet, Mr Cad and
Jessops in Oxford.
‘I would never buy a significant item over the internet – the risk of loss or damage,
getting the wrong item, and so on. The personal contact is crucial to weighing things
up.’
For UK photojournalist Edmond Terakopian, ‘passionate’ staff are the key. ‘Jacobs in
New Oxford Street [London] used to be my haunt along with the majority of Fleet
Street and, sadly, they went out of business and most of us now go to Fixation [in
south London].’
London-based photographer Edmond Terakopian
Waiting in for the postman or tipping off the neighbour about an imminent delivery –
which can take several days – is wearing thin with many, it seems.
Although Gardner admits to browsing for gear online, he says he would then choose
‘click & collect’, allowing him to pick an item up at a local store – an option that
Futuresource says is key to the future and which suits specialist camera shops in a
changing market (see below).
More than just a shop
Many stores offer more than expertise. Park Cameras, which
has won many awards for its customer service, also hosts photography courses and
events. Last year, 1,200 people descended on its showroom in West Sussex for its
Imaging Festival.
This year there were two one-day events; one in Burgess Hill, West Sussex, on 14
June and a second, on 21 June, at the new Park Cameras store in London, which
opened last November. Visitors were promised free seminars by leading
photographers, special deals on new kit and free sensor cleaning on Canon cameras,
for example.
Park Cameras prides itself on marrying traditional retail with mail order and a thriving
online business.
Websites play a key role, not only in promoting the expertise of high-street shops, but
also in allowing customers to buy products – a trend that has seen online’s share of
interchangeable-lens camera sales revenue rise from 25% to 38% between 2010 and
2013.
‘They [the stores] need to make sure they have a web presence,’ says Richard
Gregory, GfK’s account director for Consumer Electronics, who stresses that websites
must not merely serve to publish a shop’s contact details. Yet many specialist shops
don’t have such a presence, he adds.
Among those that do is the London Camera Exchange, which, along with Jessops, is
the joint largest chain in the UK. Yet online currently accounts for 5% of the revenue
at the 28-store business.
Survival tactics To survive, high-street stores have had to work with their suppliers
to be more price competitive, and the huge price ‘delta’ of years gone by has shrunk,
according to Futuresource.
‘We are now competing with online stores,’ says LCE’s marketing and
communications manager Adrian Deary. LCE says it can match prices with those of
authorised sellers on other websites, high-street retailers and its own online prices.
‘High street [stores] have had to change their cost base a bit as well, renegotiate rent
with landlords and look at staffing levels – perhaps having to let go of an extra person
who was there just in case…’
London Camera Exchange marketing man Adrian Deary
Asked how LCE can deter customers coming in for expert advice, then simply
walking away empty-handed, Deary replied: ‘We can’t force people to buy and we
don’t charge a fee for our advice, but once they’ve come in the store, they’ve had the
advice and the product’s there.
‘I don’t see too many circumstances where you would just walk away. I think it’s
human nature that you’ve engaged with someone, and they have given you advice and
we should value that.’
It is clear, however, that the ‘customer journey’, according to Futuresource, has
changed.
High-street stores will be hoping that such a journey does not start and finish at the
click of a mouse, but leads to customers making a return trip. Even if it is just to
collect their shiny new purchase.
‘Click & collect’ key to future
Traditional mail-order delivery means customers
can research their prospective purchase in-store, but then leave without making a
purchase. The growth of ‘click & collect’, where customers pay online and then
collect their new toy at a nominated store, could be the saviour of the high street, it
seems.
It enables people to ‘re-engage’ with their local shops, says Futuresource – providing
somewhere to go back to, as well as seek advice on other services and buy
accessories.
This, coupled with camera makers’ focus on higher-end models – and away from lowspec compacts crippled by smartphones – could play into hands of high-street
specialists with knowledgeable, spec-savvy staff.
‘Not everybody is happy to sit in their rooms, order something online and receive it
by post in the next few days,’ adds Bryant, who says some are uncomfortable with a
‘faceless’ organisation.
‘People are spending more on cameras now than they did a year ago… albeit in much
smaller volumes, but that lends itself to a more specialist, hobbyist market and a retail
landscape where a face-to-face engagement will play an important part.’
Simon Bryant, head of consumer electronics at Futuresource Consulting
Price gap ‘diminished’
We did a quick search for a Canon EOS 6D body only on 2
June, and found that it can be bought for £1,099.97 on Amazon, plus £5.61 post and
packing – a total cost of £1,105.58.
At LCE, which says it matches its website price to that quoted in-store – the EOS 6D
costs £1,379.99, plus £4.99 postage. The LCE price also includes Adobe software and
it’s also eligible for £150 cashback from Canon, bringing the cost down to £1,234.98.
The same model costs £1,383.99, including delivery and software, at specialist online
photo store Wex Photographic (also eligible for £150 cashback).
Meanwhile, a Nikon D3300 costs £393.10 from the lowest- priced Amazon seller,
including delivery. However, at LCE it costs £364.98 including postage and £40
cashback, so it is £28 cheaper, plus customers can get face-to-face advice.
Futuresource’s Simon Bryant says: ‘The huge gulf we saw in prices between the likes
of Amazon and some of the high-street retailers has diminished, there is no question.
To survive, these companies have had to become more competitive…’
He believes people will pay more for being able to order and reserve online and then
picking up the item from a high street store a few hours later, rather than having to
wait three to five days for home delivery.’
Grey-import warning
Online shoppers may encounter ‘grey’ importers. They sell
goods brought into the UK through an unofficial route, meaning they may avoid tax
and import duty and are able to undercut authorised dealers on price. Among the
potential pitfalls is the camera not including a UK warranty.
‘If something goes wrong, you have to send it back to whichever country you bought
it from,’ warns photographer Edmond Terakopian. ‘For me, as a professional, I can’t
have my equipment away from me for weeks on end, it’s just not do-able.’
LCE’s Adrian Deary adds: ‘There are a number of problems with buying online. One
is the warranty issue, especially if it’s come from a grey import, an overseas source.
You don’t really know where it’s come from. The warranty could be shorter than is
offered in-store. It can also be provided by a third party – whoever they may be.’
Futuresource’s Simon Bryant agrees that buying from an online brand that customers
don’t recognise poses a risk. ‘There isn’t that tangible situation where they can
discuss the problem,’ he says. He acknowledges that consumers are becoming ‘more
savvy’ about the potential dangers, however.
AP asked Amazon to explain how it can be sure that equipment sold through its site
has not been sourced from grey importers, but it refused to comment.
Second-hand role
‘We accept that online is very important, but it’s more a first
point of contact for our customers,’ says LCE’s Adrian Deary.
‘It’s where they can find out where we are, what time we open, the range of products
we sell, prices and so on. We also have a lot of second-hand on there.’
Deary explains that used equipment can only be ordered for delivery by phoning the
relevant store, although customers can use the LCE website to order new cameras.
SOME KEY STATS
• Demand for cameras in the UK is predicted to drop by 25% this year, according to
research company Futuresource Consulting
• Britain’s photo industry was worth 13.4% less in April, compared to the same month
in 2013, according to GfK
• 34% of camera sales in 2013 were online. Most (18%) were from ‘multi-channel’
retailers such as John Lewis and Argos (Source: Futuresource Consulting’s 2014
Digital Camera Retail Distribution Report)
• By the end of 2014, total UK camera shipments are expected to have more than
halved in the three years since 2011, falling from 5,571,000 units in 2011 to
2,557,000 in 2014. (Source: Futuresource Consulting’s 2014 Digital Camera Retail
Distribution Report)
• Between 2011 and 2013, specialist photo outlets in the UK fell from 731 to 340
(Source, GfK)
Read more at http://www.amateurphotographer.co.uk/photo-news/ap-investigates-thefuture-of-high-street-camera-shops-5621#g9MR9O0l0WeB0THS.99