CEA

Printing at Retail on the Rise

The numbers continue to show that printing at retail is picking up. Although sales of photo kiosks and digital minilabs were slightly down in 2004, the number of people printing at retail is up, driving further growth in retail digital print volumes. InfoTrends reports that 2004 represented a gap year in terms of equipment sales, as the market absorbed the heavy installations in 2003 when major chain photofinishers like Wal-Mart and CVS sought to equip all their stores with digital minilabs and photo kiosks. Nevertheless, growth was up again in 2005, as many of the mid- and low-volume retailers, that were not quite ready to invest in new hardware during 2004, did so in 2005.

The Kiosk is King
According to InfoTrends, sales of photo kiosks to retailers grew by about nine percent in 2005. Some retailers are adding three and four kiosks to their stores to avoid long lines and waits for customers. In addition, suppliers such as Lucidiom and Whitech now offer software packages to retailers that transform consumer’s home PCs into a kiosk. Using the software, consumers place their order on their own computer and pick up their prints at their local photofinisher.

At PMA 2006, kiosk technology was king with new models coming from Kodak, Fujifilm, Sony, Lucidiom, Pixel Magic and Whitech. Newcomer to the category, HP created a major buzz with the introduction of their Photosmart Express Station.

Digital mini lab sales are expected to demonstrate growth during the five-year forecast period, fueled by replacement sales, decreased prices and new innovations. The digital minilab market is experiencing a shakeout with equipment suppliers such as Agfa and Konica Minolta no longer in that business. The remaining big players (Noritsu, Fujifilm and KIS/Photo-Me) look to gain more market share from those departures.

Consumers clearly are responding to advertising ventures at retail that are designed to drive them back to the stores for prints. InfoTrends reports that only 14 percent of digital camera owners who printed photos ever made prints at a retail location in 2003. This figure increased to 33 percent in 2004. They conclude that over 26 percent of total digital prints were produced at retail in 2005, up from 19 percent in 2004.

Printing standard-size photos (4 x 6 through 8 x 10 inch) still remains the most popular photo service. Whether at home, at retail, or through online firms, standard-size prints are the primary engine for revenues and profits at a broad range of suppliers and at retail photo stores. In addition to making prints, consumer were ordering greeting cards, calendars, photo books and more personalized gifts.

Printing Supplies up Globally
Lyra Research forecasts that the global digital imaging supplies market will exceed $100 billion in 2006. While the digital imaging industry has been generating more revenue from supplies than from hardware for some time, 2006 marks the first time the supplies sector will register 12-digit revenue numbers, exceeding hardware revenue by 68 percent. According to Lyra's Hard Copy Supplies Advisory Service, the growth is attributed in part to the availability of more affordable, high-speed, easy-to-use color ink jet and color laser printers that enable users to print more graphics-intensive documents.

Broadband Internet service, digital photography, affordable color printers, high-capacity e-mail accounts and desktop publishing technologies are all some key factors driving supplies revenue. These fast-spreading elements have made it easier to create, share and access electronic documents. New high-speed, easy-to-use color ink jet and color laser printers and digital color presses are enabling users to print sophisticated, graphics-intensive documents, transforming the old digital document landscape from one of monochrome-only applications to one of rich and complex color applications that include digital photos, Web pages, PDFs and other graphics-intensive documents.

Lyra estimates that color and graphics-intensive documents will consume three to four times as much toner and ink per page as traditional monochrome applications such as photocopies. These trends will result in increased consumption of ink and toner and, to some extent, value-added papers, driving digital imaging consumables revenue worldwide.

Revenues to Grow
Revenue from consumer printing of digital photographs will continue to grow steadily through 2009, according to a newly released study by Lyra Research. The report, Forecast 360, sees North American revenue from sales of home photo printing supplies and in-store and online printing services more than doubling from a combined $2.3 billion in 2002 to $5.2 billion in 2009.

In 2006, revenues from digitally printed images will hit $4.3 billion on the strength of both at-home and retail solutions. The compound annual growth rate is pegged at 7.3 percent for the eight-year period. Worldwide revenue from photo printing is expected to grow from a combined $6 billion in 2002 to $19.7 billion in 2009, a compound annual growth rate of 13 percent.

The percent of digital camera and camera phone images that are printed will remain modest, and the average price per print will sag in response to competitive pressures and through improved production efficiencies. Nevertheless, the sheer number of images digitally captured is exploding. The result will be a steady increase in digital photo-printing revenues through the remainder of the decade.