Drug expands photo kiosk services

As consumers print more of their photos at home, retail pharmacy chains are coming up with new ways to maintain their share of the photo processing market. And one way they’re doing it is with new software that allows customers to create photo books at in-store kiosks and online.

The Photo Marketing Association expected photo books to generate $389 million in sales this year, compared with $267 million in 2007 and just $81 million in 2005. And if those sales trends continue, photo books could become a $500 million a year business in 2009.

“I believe photo books will emerge from their alternative niche and become a much more mainstream product,” said Paul Worthington, senior analyst for the PMA. “Most customers will print two to six books per year, up from the one or two printed now.”

The photo book business is being driven by easy-to-use kiosk systems and online software from Kodak, Fujifilm and Hewlett-Packard that enable novice photographers to create their own photo albums.

“Some of the top trends in the photo book market include more automated software that almost instantly produces complete, professionally designed books,” Worthington said. “All the users have to do is choose their photos.”

Longs Drug and Rite Aid now use new kiosks from Fujifilm that allow users to create photo albums with dozens of images. Customers can insert a memory stick or CD with images into the user-friendly kiosks, arrange the photos and create borders and other designs. The kiosks also can be used to create calendars and other social expression items.

CVS stores use Kodak kiosks to deliver the same service. The kiosks are loaded with six photo book design schemes based on such seasonal holidays as Halloween and such celebratory events as birthdays and graduations.

But even though kiosks provide customers with a way to create photo books in stores, it appears most of the photo book business is being generated online. “We’re seeing more people creating them online and either picking them up at stores or having them delivered,” said the PMA marketing research director Dimitrios Delis. “Most people don’t want to sit at an in-store kiosk for an hour, or however long it takes, to make a photo book.”

More sophisticated kiosks are one of the key factors that have allowed pharmacy chains to boost their share of the photo processing market while other retail channels are losing theirs.

The PMA estimated that retail pharmacy is the only retail channel to build its share of the market during the past two years, from 26 percent in April 2006 to 28 percent in April 2008. During that same period, discount stores lost 7 percent of their share (35 percent to 28 percent), warehouse chains were down 7 percent (20 percent to 13 percent) and supermarkets lost 1 percent (3 percent to 2 percent).

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