Make cameras an image of success
The digital camera and imaging market is one that offers a wide range of opportunities, but resellers must know what they are selling and who their customers are, as buyers know a thing or two about the product, writes Rob Blincoe
Estate agents often top lists of the most hated professionals, but when it comes to the business-to-business digital camera and imaging market, they are the reseller’s best friends.
They adopt early and carry on investing in the technology. They have clear business needs for easy-to-use cameras, simple connectivity, professional printing results, and they also like a wide-angled lens. Advancements in all these areas have continued delivering efficiencies and cost benefits. Nearly everyone quoted in this article cited them as a beaming example of the opportunities in this market. A bit of lateral thinking will help VARs sell these same business benefits to other operations.
Daryl Platt, corporate sales director of Dabs.com, said businesses were taking up the technology before consumers. “What I found is that planning departments and estate agents found it paid for itself very quickly. Planning inspectors would be using two rolls of film a day, each roll would cost £3 to buy and £3 to develop, which soon mounted up. Estate agents did not have the delays in waiting for professional photographers to visit the houses they were selling,” Platt said.
At Dabs.com, Platt sees a continuation in demand from smaller service businesses. “The biggest markets we have for smaller businesses are those producing their own catalogues. For example, plumbers are taking photos of bathrooms they have installed to show off their work to potential new clients,” he added.
Steve Fan, marketing manager at digital camera distributor Sangers Group, believes the market is a very educated one. He said: “Businesses and consumers are already on third and fourth generation replacement cameras. Second cameras are also being purchased.”
Mark Nicholson, trade marketing manager at Canon Consumer Imaging, said that digital photography has changed the face of image capture and now everyone sees it as part of everyday life. Canon has a team of specialists who visit large organisations to promote the advantages of using digital cameras in their work.
“Whatever the business, the camera can capture it in action,” Nicholson claimed. “Businesses are about presentation. It is an important part of business life. You are looking for pictures to enhance words, and not just in sales marketing and training.”
Nicholson is certain that any company that has a sales and marketing department has need for a digital camera and combined printing solution.
“Resellers need to make a case. They should be asking their customers, ‘have you thought of this to improve the way you work?’. If you open the door to them they will walk through. The trick is matching a need, understanding the specific needs of a customer, and then there is a sale,” he said.
Phil Williams, UK sales manager for the Imaging Systems Division of Pentax, also believes in this approach.
“It would be fairer to say businesses are looking for lots of different things. Traffic wardens, for example, want robust, water-resistant cameras that have undeletable time and date stamps. Estate agents want easy-to-use cameras that are good quality and produce a good image,” Williams said.
“Businesses are not looking for a £69 piece of plastic – well they might be if it is for a team of merchandisers to record their work, then if it gets broken or lost its not a big deal.
“The point is that it has all become so easy to use. The best opportunities are the public sector, education and the service industries. As the technology becomes easier to use, image quality become better. A lot of businesses are doing it themselves and this will make people try and do more and more themselves,” Williams added.
This is backed up by research from analyst group IDC. It has undertaken a survey of 400 SMEs across the UK, France, Germany and Sweden.
Paul Withington, research manager for IDC’s European printers and peripherals group, said: “The penetration seems very high; 81 per cent of those surveyed own their own digital camera and 16 per cent had bought their camera from the local IT dealer, as opposed to a specialist camera shop.
“I wouldn’t say it is a huge market. There is an opportunity for the tailoring of products into a more business-friendly proposition. No one seems to have tackled it from a pure business perspective.”
Withington suggests the Minolta Dimage XT Biz camera and software combo as an example of how the market may develop. The camera is a compact digital, and the Biz software integrates common image-management and captioning functions with a few uncommon features. It can confirm for government agencies, solicitors and the police, that not a single pixel in a given photo has been altered or tampered with. It also allows users to attach audio files to images, along with text notes. You can also email annotated images directly from the XT Biz software, and also save shots as an HTML web page. Naturally, the software also offers a system for organising and searching images.
The digital camera market offers a classic IT selling situation where you have to add value. Even though there is growth through technology advancements, and the market is not saturated yet, there is plenty of price-cutting going on, and every man and his dog has been selling digital cameras on eBay.
As an example, one trader, going by the name of MoggieX, built his eBay business on digital camera sales, and as a one man business had grown turnover to £100,000 a month by May 2004. He was an eBay Titanium level PowerSeller. He employed his girlfriend, but a year later he had to lay her off and has now ditched full-time eBay work himself. His complaints about the market will be familiar with anyone who has sold computer products. The latest technology arrives, there is a decent margin, and then everyone starts selling it and undercutting each other.
In May 2005, camera retailer Jessops revealed that half-year profits were down from £7m to £5.7m as a result of sales flatlining in February. It described that situation as “the toughest trading conditions ... At least since digital cameras were launched into the market in the mid 1990s”.
Withington said: “In business there is still a growth area for digital cameras. We are seeing a 17 per cent growth rate in 2005. But we are seeing a slow down. Camera phones are impacting the market, and the penetration into business is already high.”
According to market research analysts GfK, the UK’s digital camera market grew by 48.8 per cent in unit terms for the year from May 2004 to April 2005. In value it grew by 26 per cent to £849.75m.
The key to developing the business is pushing a complete digital imaging solution. Canon’s Nicholson said: “Photography is not just cameras, there is the input and there is the output. Resellers should look for opportunities and take business back to their core in software and printing.”
Fan echoed this, he said: “Businesses should be offering ‘total PC/IT solutions’ to their customers to include a higher specification camera, printer, scanner, and PC. Too many packages still include a cheap camera bundled with a PC. Customers should be offered greater choice.”
Dabs.com’s Platt recommends putting laptops and digital cameras together to make a professional package. “Businesses with 25 employees and above are not really interested in the camera, but rather the benefits it offers and what the whole package can do for them,” he said.
Platt feels further market growth is going to be technology driven. “It depends on the results you can get, like the ability to print photo quality images on regular printer paper. Oki have had some phenomenal results with this,” he added.
Oki has its C3000 and C5000 series printers aimed at producing professional colour documents in-house. It has visions of company sales packs being produced this way instead of being outsourced to external print houses. The range offers Oki’s ‘photo enhance’ mode, which promises photo-like quality from ordinary paper.
This is manna from selling heaven. Resellers can demonstrate cost saving and improved returns on investment, but it is not the only way to go. Another market driver is emphasising the importance of quality inks and paper to produce the best results.
Either way it is all about offering customers professional desktop publishing results without the need to subcontract out to specialist printers. Platt said: “Customers are incorporating more still photos in their documents now, when previously they have had to use clip art on brochures and catalogues. I would not like to be in the printing business right now.”
Just by being able to use their own images presents a cost saving to customers. Marketing departments have traditionally gone to image libraries to pay a fee to use one of their images for a specific purpose, and for a limited time and number of copies. It is interesting to point out that Mark Getty, chairman of the world’s largest photo library Getty Images and part of the oil billionaire dynasty, has said: “Intellectual property is the oil of the 21st century.”
They offer top quality photography, but if your customers can save themselves image library fees and adding to Mr Getty’s very full pockets, their digital camera investment will soon pay for itself.
Another market driver is the convenience of memory cards and the flexibility of printers and other devices in reading them. Withington says that half of multi-function printer, copier and fax machines now offer card slots, and these are particularly bought by small businesses.
And cards are just the tip when it comes to digital imaging accessories. Fan said: “Accessories for digital cameras are an absolute necessity for dealers if they want to make additional margin, especially as the percentage profit is usually much higher than on hardware. Products like inkjet media, recordable DVD and CDs, and memory cards and readers have a higher ‘burn’ rate and high attachment rate per camera. It also provides a steady income stream for the reseller and gives customers added value service from a ‘one stop’ shop.”
Another method to make additional margin is by developing specialist camera knowledge and moving into offering sophisticated single-lens-reflex cameras, which are higher ticket-price items and require an educated sell.
Canon’s Nicholson, however, does offer a word of warning about going too gung-ho into the high-end digital camera market. “Be careful who you sell to. If photography isn’t really your bag then don’t try and offer too much. Don’t try and blag someone who know’s what they’re talking about,” he said.
Just because you want their business, there’s no need to actually act like an estate agent.