With Memories So Digital, What Happens to Stores? Photo Labs?

PhotosPhotography is more popular than ever thanks to smartphones. But Walgreens and other retailers that offer low-cost photos confront a hard reality in the Internet age: Americans are printing fewer of their digital memories.

An estimated 12.3 billion 4-by-6 photos will be printed in 2015, down from 15.2 billion in 2011, according to InfoTrends, a Boston-based market research firm for the digital media industries. The firm expects the print market to decline 3 percent a year through 2019.

Some people just don?t print photos ? or stopped printing them ? because they share them on Facebook, Instagram and other social media. Instagram, launched in 2010, says an average of 70 million photos are uploaded to its site per day.

The fade of the photo album has caused retailers to take a closer look at their printing businesses. Wal-Mart recently closed photo labs at several suburban Chicago stores because demand had dropped, said spokesman Kory Lundberg. The overwhelming majority of its stores still have full-service photo labs, he said.

Walgreens, based in suburban Chicago, has phased out a dedicated position in its stores known as the ?head photo specialist.? Alex Gourlay, president of the drugstore chain, said the staff changes were driven by technology.

Two years ago the company began switching to new printing equipment in its stores.

The old way of mini-lab printing at a store was to develop the film in chemicals, print the images on photo paper and develop those in chemicals as well.

The newest machines are digital only, which means they don?t handle film. The new printers are either inkjet or dye sublimation, considered a ?dry? process since the photo paper is never dunked in chemicals.

?Dry? photo labs are less expensive to run because they don?t require chemicals and are easier for store employees to operate, said David Haueter, associate director of photo printing trends at InfoTrends.

?Retailers don?t have to have a dedicated person to run the photo lab anymore,? Haueter said. ?A lot of times when you walk into a store now, there?s nobody in the photo area.?

Consumer behavior has also reduced the need for photo managers in the store. When ordering prints, customers upload photos to retailer websites or use self-service kiosks in the stores.

Gourlay said the company has found other roles for more than 90 percent of its photo specialists.

About two-thirds of Walgreens? approximately 8,200 stores have photo labs, Gourlay said, so the company remains committed to the photo business. The convenience and same-day availability of photos make the company a strong competitor. Online photo sites like Shutterfly even partner with Walgreens and other retailers to offer in-store pickup.

The key to the future for Walgreens, Wal-Mart and other retailers depends on how much consumers print from their mobile devices. Smartphones have become the primary camera for most consumers, Haueter said.

Walgreens is encouraged by its mobile trends. Gourlay said 40 percent of the company?s photo orders come from mobile phones. Five years ago, mobile orders were only 1 percent of the total.

The company also has found that its customers are printing more often but printing fewer photos at a time, Gourlay said. To offset the decline in traditional prints, Walgreens and other retailers are marketing photo merchandise like mugs, calendars, T-shirts and greeting cards. One of the most popular items last Christmas was the photo-frame tree ornament, Gourlay said.

Despite the investment in new printers, photo print pricing has remained stable over the last few years, Haueter said. For a 4-by-6 print, Walgreens charges 12 cents for mail delivery, excluding shipping costs. For in-store pickup, prints are 29 cents a piece for up to 50 prints. A Walgreens spokesman said the price per print has gone up only a few cents over the past five years, but discounts are common.

Part of Walgreens? photo strategy is to make it easier for consumers to get photos out of their phones and onto paper or other surfaces. It has partnered with more than 100 app developers to integrate the company?s photo printing software into other apps.

InfoTrends recently surveyed consumers about printing photos from their mobile phones and found some encouraging signs for printers, Haueter said. Twenty-three percent of respondents said they ?plan to but haven?t tried it yet,? while 16 percent said they ?didn?t realize they could print mobile phone photos, but would like to,? the survey said.

?People are starting to understand the vulnerability of keeping all of their photos electronically and trying to find them in four or five years,? Haueter said. ?A photo album as old-fashioned as it seems is still probably the best way to save and archive photos.?

(Source: TNS)