F22 U S Retail On Site Printed 1.11

coverU.S. Retail Photo Print Output 2009-2014Confidential Property of [F/22] Consulting, Inc. - 2010

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What’s Dragging this Down?Consumer Adaptation Institutional Failure

2PAGE 2Confidential Property of [F/22] Consulting, Inc. - 2010Retail Photo Output – 2009-2014

• From Selective Printing to “no thanks”

• From Email & Photo Sites to Social Media (esp. Facebook & Picasa Web Albums)

• From DSC to Cameraphones and Smartphones.

• From Still Images to Short-From Video (the “Flip Factor”)

• DSC’s that provide complexities and no solutions.

• Unnecessarily “bloated” image files.• Retailer retreat (capital, labor, space,

advertising)• No one driving awareness and demand for the

category• Far too many unnecessary friction points for

consumers to navigate from capture to retail output services.

Situation Analysis• Conventional print volume (film + digital) and revenue continues to

fall and that fall has accelerated in 2010.• Conventional digital print volume and revenue began to decline in

2009 and the decline will continue.• Walmart Stores, which enjoyed share leadership for numerous

years, has slipped from the top position, with promotional drug chains Walgreens and CVS gaining share.

• Personalized printed output continues to be the on-demand print category growth opportunity for retailers.

• Kiosk prints as a % of total prints will grow as retailers increasingly turn to lower-cost, lower-touch print solutions while consumers opt for instant gratification.


Situation Analysis - 2• Transformation from “wet” chemical minilabs to “dry” ink, dye-sub,

laser and xerographic replacement print platforms has begun (e.g. Walmart has completed more than ½ of their installed base to Fuji and Epson Inkjet and Xerox . Meijer and Duane Reade have Hewlett-Packard ink and laser platforms. CVS and Target are rapidly updating with Kodak Apex dry solutions).

• Seasonal demand spikes are a significant and increasing challenge for retailers as demand shifts from everyday conventional print demand to personalized products, with primary demand concentrated from mid-November through late-December.

• Focus required to identify and develop new output products with everyday demand.



Total On-Site Photo Print Output 2009-2014

(4x6 Equivalent Units - B)

The growth of personalized printed output is not yet on a trend to compensate fully for the loss of conventional print consumption.


Total On-Site Photo Print Revenue ($B) 2009-2014

• The richer revenue from personalized output, however, could begin to drive higher category revenues and margins within 5 years.

• By 2014 revenues from personalized printed products are likely to represent more than 50% of category print revenues.


Retail Digital Prints(Conventional 4x6 Equivalent Prints - B)

• Total Conventional Digital Prints at retail began to decline in 2009 and that decline will continue.

• Minilab prints, under current trends, will decline by >40% over next 5 years while Instant prints hold steady.


Retail Digital Prints(Conventional 4x6 Equivalent Prints - B)

0

5

10

15

20

25

Digital Web-2-Store (Minilab)

Digital Counter (Minilab)

Kiosk

Film Prints


Total Retail Prints(Conventional + Personalized Prints 4x6 Equivalent Prints - B)

• The addition of personalized prints creates a far more attractive view of the category.

• This projection does not consider likely growth driven by inevitable new products and enabling technology


Instant Prints vs. Minilab Prints(Conventional 4x6 Equiv. Prints - B)

• There are forces at work that advance the need for minilab printing (especially web-2-store printing, new personalized product possibilities, and the availability of informed staff).

• There are, simultaneously, forces at work that limit the investment interest in minilabs (especially labor costs, operational complexities, and declining revenues).

• Other trigger events which could radically alter share of prints would include print from Facebook.

Seasonality of Print Revenue2014


• Current personalized printed products are dominated by products with demand primarily from mid-November through late-December.

• As the share of output from personalized printed output grows this trend threatens to shift even more volume to a narrow holiday window.

• The popularity of photo merchandise, which is currently dominated by holiday gift giving increases the challenges of equipping and staffing this changing category.

Personalized Photo PrintsShare of Revenue - 2009


Wet vs. Dry PrintsB - Conventional Prints


• Dry printing will rapidly replace AgX prints over the next 5 years

• A majority of all personalized printed output will be dry.

Wet vs. Dry Prints% of Conventional Prints


•Dry prints will rapidly begin to replace AgX prints over the next 5 years.


Threats & OpportunitiesThreats Opportunities

Accelerated non-printing behavior by consumers (e.g. Facebook, Twitter sharing as beginning and end of most post-capture activity).

Facebook members are now 1-Click away from quality retail printing

Accelerated category retreat by major retailers (reduced capital investment, reduced labor commitment, reduction of footprint or relocation to service clusters, reduced promotion and advertising)

Rapid development and effective merchandising of streams of critical new personalized printed output (especially products with year-round appeal).

Widespread adoption of camera phones as primary household capture device (devices and apps on smartphones provide the ease and immediacy consumers want….plus the best camera is the one you have with you!)

Content becomes a powerful economic engine and drives demand for boundless new personalized output opportunities at retail.

Failure to develop and effectively merchandize and promote critical year-round high-volume personalized printed products.

Major retailers in combination with industry partners aggressively pursue and support awareness campaigns.

Print from mobile devices (e.g. Susteen)

New generations of capture devices that are always connected to solutions.

Engines of Growth


Meeting consumers where they love to be with simple, meaningful, affordable solutions (print from Facebook and pick-up in an hour)Personalized Event Celebration BundlesHome DécorCommercial Image-Rich Printed OutputRetail Products with Output ComponentsLicensed Content for Consumer and Commercial OutputDelivering a select number of new high-demand products with year-long demand

Personalized Event Celebration Bundles

• Birthday• Anniversaries• Family Gatherings• Class Reunions• In Remembrance• ….and much more!

PAGE 1717Retail Photo Output Projections Update – May 2009

Print from Facebook

• Executed properly this could be (will be?) the print-industry and consumer memory preservation salvation.

• Executed properly this could re-establish Fujifilm and its retail partners as the dominant force for years to come.

• Executed properly this could dramatically increase overall retail print demand, re-establish a category investment rationale for retailers, and re-anchor dedicated support in key mass retail locations.

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Retail Photo Output Projections Update – May 2009

Home Decor

• Canvas Prints• Posters• Collages• Framed Prints• Etc.


• Flyers• Menus• Direct Mail • Catalogs• Image-Rich Business Cards• Banners• Interior and Exterior Signs• Variable Data Advertising

(circulars, handbills, etc.)• Variable Data Direct Mail

Materials• ….and much more!

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Commercial Image-Rich Printed Output

20Retail Photo Output Projections Update – May 2009

Retail Products with Output Components • Build-An-Album (pages

vs. books)• Collage Frame and

Software bundles• Album, Scanner &

Software Bundles• QiGO-powered Retail

Products• ….and much more!


Licensed Content for Consumer and Commercial Output

• Disney Characters & Movie Releases)• Mattel• Hasbro• Martha Stewart• NFL• NBA• MLB• NASCAR• Warner Brothers (Characters & Movie

Releases)• Pixar (Characters & Movie Releases)• Celebrities• Events (Festivals, Major Sports Events,

Concerts, etc.)• ….and Much More


PAGE 23

FRANK BAILLARGEONThank You

23Retail Photo Output Projections Update

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F22 U S Retail On Site Printed 1.11