Photo Imaging News NACDS conference article

1. Photo Imaging News - International Edition 27.06 - Week of March 15, 2010 <br />www.photo-news.com 5 <br />NACDS Regional Chain Conference by Tony Burkardt<br />This year about 400 people attended the NACDS (National Association of Chain Drug Stores) Regional Chain Conference in Florida. Altogether, NACDS members represent 35,000 drug store locations, but this conference was designed as a working meeting to address the unique challenges facing senior retail executives who operate drug store chains with fewer than 250 outlets. As might be expected, the focus of the conference and many speakers was on health and pharmacy department issues, the core business of drug stores. <br />Our primary interest was to gain some insight about the mindset of these executives about onsite digital imaging in the regional drug channel. However, since most of the attendees were top executives and the Photo Category was not covered in the program, it was difficult to get many details about digital imaging. Still, we went because we reasoned that Photo occupies a lot of space in a drugstore why wouldn’t these executives discuss the industry trends and opportunities facing the drug channel TODAY. <br />From my lengthy experience developing photo services for large retailers, I am convinced that if you do not have top-down commitment to the photo program, nothing will flourish at the store level. I believe this is the reason why onsite digital imaging is disappearing in these smaller drug chains. <br />Let’s look at three topics that were of concern to the attendees. 1. With the increase in labor issues and law suits, speaker Deborah Kelly focused on the latest landmines regarding labor laws, offering practical advice along with a list of do’s and don’ts. Changing labor laws are obviously a major ongoing concern, and time-consuming problem at the store level. Store managers need to be trained and kept up to date on the day to day administrative duties of protecting their company and the employees. 2. An emerging topic that is becoming increasingly important today is how to leverage social media. Pete Blackshaw spoke about the key steps needed to participate in this developing marketing arena, one that top executives must understand to prepare appropriate strategies. 3. The last critical area, at least from my prospective, is the Front End of the store, which covers everything but drugs and Pharmacy, and is where Photo is positioned. Ellen Santoro covered how the Front End has become more important than ever to the overall sales and profit of drugstores. She explored recent trends across the key front-end categories, and what you need to know to stay relevant in this critical segment. However, I was disappointed that even though Photo is included in the front-end category, she did not mention it. My conclusion: Photo is no longer considered to be a key category that warrants discussion at industry conferences. <br />So, I’m not surprised that top drugstore chain executives are focusing their attention on other categories, and as a consequence onsite digital imaging is dying in this drug channel. With a traditional emphasis on prints, with ever-declining volumes, it seems that no one is informing this industry segment about the relevance of onsite digital imaging to bringing customers to stores and the very significant profit opportunities offered by personalized photo products. Studying photo imaging industry statistics and trends, I can easily conclude that the outlook is improving significantly and consumers are trending back to retail. Then, I am puzzled: are the top executives of these chains unaware of these changes or have they made irreversible decisions to no longer invest in this once-highly-profitable channel? As a regular reader of the trade magazines and newsletters aimed at these executive, e.g. Mass Market Retailer (MMR), the global newspaper for supermarket, drug, and discount chains, and Drug Chain Review, I can attest to a lack of editorial coverage of Photo.<br />Still, after obtaining a better perspective on the pressing issues on top executives from this conference, I can now understand that Photo is perceived as nothing more than another headache with no prescription or healing process in sight. Photo industry spokespeople and manufacturers must learn how to blend into the retailer’s core business. It’s not merely about “photo”, it’s about building traffic and increasing sales and profits, and more importantly how digital imaging can help drugstores become a more frequent “destination.” Salespeople must become consultants, willing to provide “industry” information and introduce “partners” who can educate top executives about the exciting opportunities we offer. <br />We need to expand our perspective beyond our own products, to really understand what “category management”, a concept to which all retailers can relate, encompasses. We need to get more involved in learning our customers’ business principles, practices, and philosophies so that we can demonstrate how onsite digital imaging can become a major contributor to the “Big Picture.” Our goal - to keep our industry from losing more retail exposure - should be to stop talking to ourselves, regroup, partner with complementary companies that are passionate about our industry, and create a solution-oriented consulting group that can bring digital imaging back into the limelight. I strongly believe that onsite digital imaging should not be classified as a “standalone” category, it must be viewed as a value-added service that increases store traffic and the average dollar per transaction.<br />The smaller drug chains were once part of the backbone of our industry, maintaining the personalized service and superior quality which our industry desperately needs today. It will be a sad day if we lose the regional retail chains selling our products/services and promoting them on a local level and must rely solely on largest national chains for mass-consumer education and advertising. For both the regional drugstores and the industry, I see that scenario as a Lose-Lose situation.<br />