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.

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5

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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/

Find out more:

www.christiansandstrom.org