Can You Make Money in the Photo Market?

If you’re focusing on the photo market, you may be under the assumption succeeding in that market is a snap. Think again. Print service providers (PSPs) face many decisions when entering the photo market, ranging from what products they’ll offer to what market segment they’ll serve. Once those are decided, they still must ensure they have the right equipment, people, and processes to succeed in this swiftly evolving profit area.

While market opportunities are declining with traditional photo prints, continued growth is seen in digital press-printed photo products, said Tonya Powers, graphic arts segment marketing manager, Production Print Solutions, with Canon Solutions Americas (CSA) in Roswell, GA. InfoTrends estimates the market potential for B2B and B2C will exceed $14 billion this year, she noted.

“It is important [that] the print service provider identify how they are going to enter into this market,” she said.  “Are they going to provide a customer-facing solution and outsource the manufacturing?  Are they going to become a fulfillment specialist for businesses that deal directly with the customer? Or are they going to offer a complete end-to-end solution? From there, print service providers should identify their visions and target audience.”

The best way to make money in the photo market is to find a niche and deliver value to the consumer through specialized, high-end photo merchandising products, added Rolando Martinez, product manager at HP.

“The products that consumers have found most appealing are photo books, greeting cards, mini-albums, and calendars,” Martinez said. “Such products are easily and efficiently produced with digital presses. By specializing in a certain product or area, a print service provider can add value by providing more unique products that surprise and delight consumers. Digital presses enable PSPs to produce these applications on specialized substrates and with special effects. Many consumers are willing to pay a premium for these higher-quality finishes.”  

In the consumer photo market, the online photo printing services that offer the ability to upload, design, and produce photo books, calendars, and postcards, as well as photo printed products on unique non-paper items, are ever growing, said Michael Riebesehl, marketing and training manager, production workflow solutions, in the Graphic Communications Business Group at Xerox. Customers of Xerox are finding it is far more profitable and productive to use a digital press over a wet process, he said.

Traditional photo processing is limited to specialized photo papers and traditional sizes such as 4 by 6, 5 by 7, 8 by 10 inches and one-sided printing.  “Xerography opens up a whole new world of possibilities,” he said.  “[They include] printing directly on unique papers, sizes, weights, and types -- even magnets, polyesters, pre-scored, and folded stock. Print providers can efficiently create the products most in demand, without post-processing.”

Targeting customers

InfoTrends slices the photo market into three major categories, Powers said.  They are consumers, professional photographers, and photo-rich business applications. The segments produce photo products that range from consumer-focused photo books, calendars, and photo cards to premium “save the dates” and wedding albums to portfolio books, brochures, booklets, and postcards.

Xerox has equipment in a variety of accounts producing photo-related products, Riebesehl reported. The manufacturer services the very large photo printing companies worldwide, as well as local pro-lab and photo specialty retailers. It also works with traditional wet labs that are expanding their existing photo print by adding digital print, yearbook companies seeking short runs, and commercial printers jumping into the photo game in an effort to create new markets.

“We find successful customers have a niche idea or are able to harness the power of the web to aggregate customers, or develop a segmented offering,” Riebesehl said.  “A Xerox press allows them to offer a unique and varied product far beyond the 4-by-6 print. We have customers that just print greeting cards or kids’ sports cards, such as baseball cards for youth sports, or specialized photo calendars and books for clubs and civic organizations.”

Each product area has its own target audience, HP's Martinez said. For instance, memory keepsakes, including vacation photos and personal photo stories, are targeted to consumers. Other applications, such as wedding, school, and portfolio albums, are aimed at professional photographers. Vertical markets also exist, including corporations, real estate offices, hospitals, and churches.

Pitfalls to avoid

One of the biggest mistakes PSPs make is trying to produce too many items and not doing anything well, Martinez said. Many companies think it’s easy to produce photo merchandise, but it’s not as easy as it seems, he reported. In addition, it takes a not-insignificant level of marketing resources to generate awareness of a new offering.

“Large online PSPs have spent millions of dollars and many years promoting their brands and creating awareness of their products and services. It’s nearly impossible to go after these established giants because they spend millions of dollars on capturing new customers and maintaining them. The best approach is to find a niche segment or application, and focus on delivering a great experience to the consumer. Providing this personalized service makes consumers feel they can’t get that product and experience anywhere else.  One of the best ways to do this is to offer more personalized application options.”

To ensure you make the most of opportunities within the photo market, Riebesehl urged considering the following tips. 

First, invest in workflow solutions to streamline steps from ordering to shipping, he said.  A touchless process can help maximize profits and ensure that you remain continually competitive. Keep in mind per-unit cost, throughput speed, and capacity during peak seasons, ease of two-sided printing (post finishing), overall automation, and integrating with inline finishing.

As well, allocate enough for marketing. “This is a consumer-driven market, so spending money on advertising or promotion is key,” Riebesehl noted.

Because the consumer market is cyclical, develop a plan to use business-to-business to help smooth demand peaks and valleys, for long-term viability.

CSA's Powers said PSPs need to take assessments of their core competencies, as well as create clear plans detailing what responsibilities each partner will bear. They should also assess their existing workflows to confirm they are capable of producing photo products. “They should then identify their target market for the photo products,” she said.  “They should identify vendors and partners with solutions that meet the needs of their target market. Also, does the PSP have the staff to support the IT, creative, production, and customer support?” she asked. “These are important needs to be addressed. And they should have strategic plans with actionable strategies to go after this new market opportunity.”   

Equipment required

Needed equipment includes a software platform with an easy-to-use customer interface, digital press, and appropriate finishing equipment to cut, fold, and stack, saddlestitch and perfect bind, based on the photo products the PSP has identified, Powers said. Along with the equipment, a staff of IT, creative, production, and customer support people should be at the ready, she added.

In addition, she said, with the continued increase in mobile devices, it’s important that PSPs always look for ways to make the creating and the order processing an easy experience from the consumers’ perspective.

Riebesehl reported products throughout the entire range of the Xerox portfolio, including the Phaser 7880, the new Versant 2100 press, and the iGen 150 press, each of which is capable of producing high-quality photo output. 

Beyond the printing system, customers must consider the finished product, which may include laminating, stitching, perfect binding, diecutting, and/or heat transfers to make the final product, Riebesehl advised.

“Xerox offers the widest depth and breadth of products to meet the needs of printers wanting to get into photo specialty, or the photo provider looking to service customers with unique high-quality photo products,” he contended. 

“To make that happen, here are some tips: Invest in a good press. Use unique paper as a competitive advantage. Practice good-quality methodology, like calibrating and maintaining presses. And understand color management.”

HP Indigo digital presses are ideal for producing high-quality photo merchandise, Martinez countered, noting that digital presses have reached quality levels that rival and, in many cases surpass, traditional photo prints. Finishing systems also play a key role in producing photo merchandise. 

To produce photo books, for example, PSPs need (in addition to high-quality digital presses) cutting devices, binders, and cover and casing systems.

“Digital interfaces are also becoming increasingly common because they allow the consumer to create and deliver photo content directly to the PSP. HP has partnered with several companies that offer software solutions that enable consumers to create their own photo books, cards, and calendars,” he concluded.