What Lies Ahead for the Retail and In-Store Photo Sector?

With consumers under lockdown in many Western European countries, the impact on the retail and in-store photo sector has been sweeping, with many retailers offering these services totally closed. Where retailers remain open, some in-store photo order terminals have been closed for hygiene reasons, with other retailers only offering essential items and services.

Therefore, in-store photo orders have plummeted, with sales of retail minilab, instant print kiosk paper and consumables falling dramatically. There has also been an inevitable impact on the sales and delivery of new or replacement minilabs and instant print kiosks in the retail photo sector.

The e-tail side of the photo sector has also experienced some slackening of sales, but as Q1 is traditionally the quietest period for photo demand, this alone will not necessarily have an undue impact on overall 2020 performance.

As we enter the Spring and Summer seasons, there is traditionally some uplift for the photo sector in Q2. This typically rises again in Q3 due to post-holiday photo product demand, especially in the form of photobooks and photo wall décor. However, cancelled and postponed holidays will inevitably have a negative impact on photo orders. This is a matter of concern to the photo industry and there has been some reaction. The largest European photo print service provider CeWe announced on March 31st that staff across its retail, photofinishing and commercial print divisions would go onto reduced working hours as of 1st April.

Photo e-tailers, print service providers and paper/equipment vendors have some limited optimism that people at home with time on their hands and spare money not being used for travel, eating out and other leisure activities may turn to photo orders. This may generate some incremental orders, as people get around to completing a photobook, or placing a photo-merchandise order. However, we are already seeing the economic impact of COVID-19 on some employment sectors, especially retail and hospitality, where staff have been laid off, which limits the spectrum of disposable income. Many other consumers will also be apprehensive about discretionary spending in times of uncertainty about income and job security.

Discounting is normally a key feature of the photo sector in Q1, Q2 and into early Q3. Whilst it is yet unclear when we will emerge from the COVID-19 situation, savvy e-tailers may well increase their marketing activity and offers in this current period to encourage consumers to spend on photo.

As a result of COVID-19, it is likely that, in the major Western European markets, (Benelux, France, Germany, Italy, Spain & the UK) we will see a steeper than anticipated decline in photo prints in 2020, as this product area is still a major on-site printing proposition. The industry will also very probably experience a downturn this year for both photobooks and photo-merchandise, which are primarily fulfilled by vertically integrated players and print service providers.

A further consequence of this situation may also be some additional retailers and e-tailers pulling out of the photo market, or even going out of business, particularly with the high number of companies operating in an intensely competitive photo sector.

Q4 is the annual peak season for the photo sector, when resellers tend to offer fewer discounts. If Western Europe has ridden the COVID-19 storm by Q4 2020, retailers, e-tailers and their print service provider partners may have to share an element of financial hit in this extraordinary year and offer discounted photo products during Q4 in order to drive volume.

About the author

Jeremy Wills

Jeremy joined Futuresource Consulting in 2001. He holds a degree in French from Kings College, University of London. Jeremy is a member of the Professional AV team. He focuses on Signal Distribution, Meeting Room Control, AV Managed Services, Interactive Displays, Professional Lighting and Esports.

In previous Futuresource roles, Jeremy was part of the Imaging team covering consumer camera and photo output markets and, prior to this, a member of the Home Entertainment team, tracking the global pre-recorded media manufacturing and storage media sectors. Jeremy has managed two research and analysis teams during his years with Futuresource, as well a wide variety of syndicated and custom research projects.