Post on 24-Apr-2015
description
The Death of Camera Stores
Christian Sandström holds a PhD from Chalmers University of Technology, Sweden. He writes and speaks about disruptive innovation and technological change.
A revolution as swept through the camera industry.
0
5
10
15
20
25
30
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Number of film and digital cameras sold in the United States
It has put many former giants and famous brands in
some big, big trouble…
Kodak has demolished building after building…
… Polaroid is gone now…
… Leica has had tough times…
Konica is gone…
… Agfa has been demolished…
… Hasselblad merely
survived...
… Ilford died…
… Bronica died...
… And so did Contax…
The manufacturers are not the only ones who’ve been
into bad times…
Ritz Camera – the largest chain of camera stores in the USA, has gone bankrupt.
Ritz is not alone in
camera store heaven…
I bet you know several camera stores in your hometown that
have gone out of business.
They may have looked something like this:
This photo was taken in Kuwait and the building was just about to be demolished. Most likely, the camera
store has gone out of business.
There must be
thousands of them
around the world…
This is not exactly what you think of when someone says Photoshop today.
In the UK, Jessops has been into a lot of difficulties.
Recently, the company posted a loss of 50£ million and the stock
crashed once again.
The Executive Chairman David Adams stated that:
"We can't carry on carrying £57m worth
of debt on a business which is generating £4m."
The firm also stated that:
"This is the first time for many years that the digital camera market as a whole
has seen such a slowdown."
Well, the market for digital cameras may be
increasingly saturated and the recession may be
worsening the situation.
But given that so many
camera stores, all over the
world, have gone out of business…
… These cannot be the only reasons...
The underlying business model for these stores must have been
destroyed in some way with
the shift to digital imaging.
Let’s try to find out how and why this happened.
Needless to say, the camera stores sold cameras…
.... Lenses and
accessories.
The consumption of film generated continuous revenues and visits to the
local camera store.
And they repaired your camera.
Cambridge 1987
… They provided service to their customers and were usually skilled in the art of
photography and at repairing cameras.
I found the following story and photo on Flickr:
“I bought a new Pentax K10 and Mom gave me Dad's old K1000 and lenses just before we went on
vacation. When I arrived in Ottawa I found there was an incompatibility with the telephoto and the K10. I
happened to wander past the Camera Trading Company and stopped in. Thomas was able to figure out the problem and came up with a solution, at no
charge. Thanks Thomas.“
You would never go to Best Buy
or Wal Mart and ask the staff for help
with your Pentax.
However, with the rise of digital imaging, Thomas and his peers throughout the world have lost ground to Best Buy and the other
super stores for consumer electronics.
Let’s go through the different sources of revenues and see how they were destroyed by
digital imaging.
1. Camera sales
With the shift to digital imaging, camera sales
exploded and the big retailers could sell huge volumes.
Since new models are introduced at a much higher pace when an industry is digital, it was
hard for the small dealers to reach
sufficient economies of
scale.
Hence, they had to charge more than the big retailers.
In addition to this, more and more people started to buy cameras over the internet
instead of going to a store.
2. Film sales and development of it.
Well, for most people, film is dead…
And the death of film implied less revenues and less visits to the camera stores.
Film dropped – bigtime.
Cambridge 1987
3. Repairing cameras.
Have you ever repaired a compact camera?
Probably not.
Maybe you have asked someone to repair your SLR,
but unless it’s a really expensive one you would most likely regard it as a reason to buy a new one.
Right?
There are two reasons for this trend.
Digital products decrease rapidly in price since new and better models tend to be launched at a high pace.
At the same time, wages in
many countries are very high in
relation to these goods.
This means that consulting
someone to fix your camera
would cost a lot in relation to
what the camera costs.
This is the case with all
consumer electronics. Back in 2003
I had this Nokia phone.
It got ill after a rainstorm, so I went to
the store and asked if it
was possible to repair it.
They wanted 300 SEK for checking if
this was possible, and
if so, this would cost
me 1200 SEK.
For that amount of money I
could buy a new, much
better phone.
It’s exactly the same with digital cameras.
’If it ain’t broke, don’t fix it’
has become
’If it is broke, don’t fix it – buy a new one’.
Camera Care isn’t a booming business nowadays.
Thus, another source of revenue for the camera stores diminished with the rise of digital imaging.
Because of all this, the camera stores were put in a situation where they could
not compete on price.
The film business had collapsed.
And the need for reparation had also decreased with the rise of digital imaging.
The only competitive advantages left were the
personal skills and the
sales of accessories.
But the overall
decline in this
business implied that costs had to
be cut somewhere.
The stores were forced
to slash much of their competitive advantage.
Many people at different
photo forums have
complained about the low
level of knowledge at Ritz and Wolf.
These stores were most likely aware of this, but were stuck in a vicious cycle.
Dropping film sales, price competition from big retailers
and a reduced need for reparation – all these factors
contributed to the fall of camera stores around the world.
All this is related to one thing:
The shift to digital imaging.
Image attributions
http://www.flickr.com/photos/djking/1185670528/