For many, the most beautiful time of the year is already over, the Eiffel Tower in Paris or the sunset over the sea are just holiday memories now – even the immense number of photos, 84% of which are taken digitally.
45% of Germans upload their digital holiday photos to social networks, 61% share their photos via messenger services, 18% secure their holiday photos in the cloud and 16% of people interviewed by the digital association Bitkom save their photos on physical data carriers.
But the analogue processing of digital holiday photos also remains popular: 65% of those surveyed state that they print their photos themselves, 34% order prints in shops, 21% via the Internet, 19% design photo books with their photos and then have them printed. Only 5% look at their holiday pictures exclusively on the screen.
In total, around 1.7 trillion photos are taken every year – and an increasing number are being taken with a smartphone. Although only a fraction of this is printed out, photo services are still a billion-dollar market. Is this a never-ending boom or is there an end in sight?
A highly competitive market
Nevertheless, the market for photographic services is highly competitive. This is not a new development, but it has taken on completely new dimensions. In the USA, it is entirely possible to speak of a wave of consolidation in this context after the private equity company Apollo Global Management took over the photo service provider Shutterfly for 2.7 billion dollars.
For its part, Shutterfly last year acquired the school and family photo platform Lifetouch for $825 million and established it as an additional brand. Apollo also announced that it would acquire Snapfish, a photo service provider, to merge with Shutterfly. We also see takeovers in Central Europe such as the recent acquisition of WhiteWall by Cewe or the French photo app Cheerz last year.
It is therefore more and more about photographs, pictures and services that market one’s own picture or posters and wall pictures as optical and tangible experiences. This is increasingly done on the Internet.
beyondprint has therefore talked to Michał Czaicki about market potential, trends, customer expectations and sales processes in this area of the print and e-commerce market. He is CEO of Printbox in Krakow, Poland, which provides an online editor and e-commerce software for personalized photo services.
Still great potential
beyondprint: Michał, the new trend “Smart Imaging” is already being talked about. What this means is that after the successful digitalization of recent years, the market for photographic services is now receiving additional impetus from the explosive growth of photography with smartphones. Is that not an exaggeration? Does more photography also mean that more photo applications are in demand?
Michał Czaicki: In general, only a small percentage of photos are printed, but on the other hand we are experiencing a huge increase in the number of photos taken each year. The number of prospect sources, after which more than 1.7 trillion photos are taken each year, will continue to increase, which will encourage the development of the market for personalized photo products. Recently, we compared the figures of a long-standing European customer: Sales of photo books alone increased by 42% and of canvases by 70%. This is an overwhelming growth of an already large supplier.
beyondprint: The business of personalized photo products is obviously a growing market. This might give one or two printers the idea of jumping on the bandwagon. Who should consider entering this market? Or is the market already distributed?
Michał Czaicki: Even the existence of such large companies as Shutterfly does not threaten the service of personalized photo products through monopolization, as there are enough niches to discover. I still see great potential for companies that have a new or perhaps unique idea with good client relationships. The only key to success is to focus fully on this business.
beyondprint: The way to a functioning shop for online printers is always via the three pillars: website and technology, marketing, and production and delivery. Does this also apply to photo services or is there even more to consider?
Michał Czaicki: Success requires good marketing to win customers, a perfect shop with editors for maximum conversion and fast, high-quality production. Marketing is always in the hands of the respective companies and is a key factor on which they must concentrate.
Just as important: website and editors must be fun and enjoyable for the user. Therefore, the path for each individual product must be designed in such a way that it is feasible for the user. Different processes are necessary to sell a book or a wall decoration effectively.
This pillar must be first-class – because it is very easy to lose a customer due to a lack of user experience. However, since it is very costly to create software and keep it up to date, many companies are looking for partners to cover this part. The third pillar is printing and delivery. In most cases, this is very complex, but many companies have already mastered it at an appropriate level.
It is therefore extremely important to focus most of your energy on marketing, to have a good partner for e-commerce and editors, and to optimize printing when the traffic is there.
beyondprint: Printbox has developed a modern software platform for the creation of individually designed photo products. Print shops and online retailers receive a complete package with which they can “get started right away”. What does this complete package mean?
Michał Czaicki: We wanted the IT part of e-commerce and the editor to be easy for customers to use. That’s why Printbox offers full e-commerce, multiple editors, a file generator, hosting with administration and a constant upgrade of the platform. All our customers work on their customer domain under their own branding.
The advantage for beginners is that they can start quickly with our system, test their ideas and easily enter the market. For established companies, we integrate our solution, use e-commerce, and can dynamically scale the system to any required traffic, even in the hottest phase.
“In the future we will order professional photos wherever we are: on the go in our travel log, in the photo app or in the high-end photo portal.” – Bernd Zipper
beyondprint: consumers expect all this in responsive design so that they can design and order their individual products on classic PCs, laptops, smartphones and tablets. What is the challenge here?
Michał Czaicki: Totally right, mobile multi-device presence is a must today. But you should know what you want to achieve with mobile channels. Many companies tend to opt for mobile presence just for their own sake. But developing an application that works on all platforms is expensive.
There are two main factors that need to be considered. First, a responsive website with editors so users can switch between devices during the purchase process – to check order status, upload images from mobile phones or create a simple product with a mobile browser.
Second, to really take advantage of the mobile channel and increase revenue, you need a smartphone-optimized user interface, shopping paths adapted to the small display, and a standalone application installed on the user’s device.
The aim is also to simplify the products. Large book templates with multiple design elements and images on one page will never be easy to create on a mobile device. The entire creation process must be redesigned and tailored to mobile displays. And only the installed app can deliver the power needed to process hundreds of images, respond to each user’s interaction, and work reliably. This cannot be achieved at this level by a web code running in a mobile browser.
beyondprint: How experienced must an online printer be if he wants to use your software? Is a separate IT department required to take care of hosting, administration, updates and possibly new developments?
Michał Czaicki: I would like our customers to be marketing experts. Because of their expertise in printing, many tend to concentrate too much on the production side.
In the IT area, we made our Printbox dream come true and created a platform that can handle the web and mobile – without IT staff from the customer side. We host the system, take care of administration, monitoring and scaling. Printbox has several server sites around the world.
Every month we release a major upgrade for all our customers with a host of new features. However, we went beyond a box-only solution. The software architecture is open, so we can make specific customizations for our customers, because many also need a customizable platform for their custom products.
We are known on the market for our high speed in software development. At the moment, almost 50 people are working on our products – most printers wouldn’t be able to afford it. And to be honest, it wouldn’t make much sense either.
beyondprint: Positive market impulses are expected from tangible image experiences. Is this just hype or is this trend consolidating?
Michał Czaicki: After an initial hype, there is usually a countertrend. Photos became digital, people stored them in the cloud – but after the first enthusiasm, the longing for a tangible, real experience came.
The smartphone revolution and the ever-improving photo functions don’t impede printing, but on the contrary awaken the need for many people to print even more of their memories and present them in the real world. The market share of image services is still growing, so now is the right time to get on board.
beyondprint: Many thanks Michał for the enlightening conversation. We are curious to see how big the share will become.
My take: Let’s talk about upcoming trends. Users want intuitive and smart experiences during the ordering process. This also requires new service offerings. That’s why I see a trend towards more premium products. In the past, a printed hardcover on standard paper was sufficient; today, consumers are looking for something unique: better paper, higher quality envelopes, first-class printing. And these upgrades are also good for better margins for service providers. The second trend is shorter purchasing processes and simpler products. Customers are looking for solutions as fast as possible, so processes must be simpler and tailored to each product. Printing photos is becoming easier and easier and we will have easier access to solutions. We will be able to place orders wherever we are:on the go in our travel log, our photo app or a professional photo portal.