In its second-largest acquisition, Amazon buys the company for $970 million.
(Page 3 of 3)
The cost of setting up a digital photography service can vary widely, depending on how many services a retailer wants to offer. PhotoChannel Networks, which is changing its name to PNI Digital Media as it enters other digital products markets including DVDs and CDs, charges a one-time set-up fee of about $25,000 for basic services that let consumers upload images online and order prints, but the price can go up to high six figures for a full-blown system with complex image-editing features and connections to third-party providers of accessories like image-adorned gifts, Hall says. PhotoChannel also charges a per-print fee of a few cents or more depending on volume, while prints retail for about 20 cents or more each, depending on size and volume.
In addition, stores that tie into the PhotoChannel system can expect to pay about $90 per month to maintain a DSL Internet connection. And in-store digital photo-printing labs can run from $100,000 for a used machine to several hundred thousand for a new one with the latest editing features, experts say.
Ahead of the curve
But the investment is worth it, Black Photo’s Chapman says. “It’s not inexpensive to stay ahead of the curve, but we search the Internet daily for new technology,” he says, adding that Black has added its own software to its in-store photo-printing lab to enhance colors.
Black’s strategy is to further develop as a multi-channel photography retailer, bringing online customers into the store. “When they walk in, we’ll help them choose a new camera, help them take better photos and help them display them,” he says.
This time next year, he adds, Black Photo will also expand its reach beyond its stores through a network of strategically placed web-based kiosks that let customers load and edit images and send them to a Black store for printing. “I see the future of us having kiosks in partner locations-coffee shops, airports, tourist destinations,” Chapman says. “Within 12 months, we’ll be in a number of different public places.” l
Capturing customers with kiosks
Dan’s Camera City operates out of a single 15,000-square-foot store in Allentown, Pa. But thanks to a little Internet search advertising on Google, it gets online orders for prints of digital photos from customers as far away as Italy and Israel. Now it’s also expanding throughout its local area in customer foot traffic without the expense of opening more stores.
Rather than build more stores, Dan’s operates ten web-based kiosks strategically located throughout the Allentown metropolitan area, including two hospital gift shops, a hobby shop, parcel-shipping stores and a florist. Customers can load digital prints, edit them and send them to Dan’s for printing. “It works very well for us,” says CEO Mike Woodland, noting that kiosks cost about $2,000 each. “It’s vital to our store traffic, and we get a high percentage of business that we wouldn’t have in other neighborhoods.”
The kiosks, from Lucidiom Inc., integrate with Photo Finale image-editing software from Trevoli Ltd. The software resides on the kiosks to provide for fast image processing, but completed images are transferred over the web to a photo-printing lab at Dan’s. Customers pay for the prints at pick-up, so there’s no need to build highly secure connections for transmitting credit card data, Woodland says.