Another Big Camera Store Fails: Why Are So Many Closing?

Another Big Camera Store Fails: Why Are So Many Closing?

by Phil Mistry, who usually knows what's what (and who was once a B&H employee). Some revealing insights here IMO

The smart phone might have something to do with it. Not just the stores but companies like Nikon who had big losses in 2016.

Thanks, Henry. A sad but very interesting article, more so since I worked retail photo sales in bygone days

This story caught my attention: http://www.visualcapitalist.com/extraordinary-size-amazon-one-chart/

 

and tells the story on where consumers are buying their goods.

I am a UK based professional wedding and portrait photographer and camera stores have had it hard along these shores as well. The biggest chain closed down and then reopened again as a more efficient business. One of the larger independents closed down too a few years ago. Curiously, the two small independent stores tucked close to each other in an old arcade have all managed to stay open. One of them have even moved to the premise opposite which is much bigger. I don't know how these two small stores managed to stay open as business have remained the same in the last twenty years to my knowledge. I bought my first digital camera (a Canon S30) from one of them in 2002. The other, which still does business in old and new gear has had business from me from time to time. Whenever I have visited these stores, there has been a small group of people looking.

 

Maybe I am wrong but my impression is that there are local factors involved in these businesses failing and sometimes, doing things the same way over 60 years means gathering a lot of inefficiency and failing to connect to the new customers.

My local store is already at an 8-9% price disadvantage compared to some online retailers because of the CA sales tax. I didn't know about the 80-20 split in instant rebates which means that anything sold that way actually costs the store money!

How we define a "camera company" is changing. Take a look at "a camera company" SNAP (holding company for SnapChat app and Spectacles.com) had their long awaited, IPO their market cap is $34B, while Nikon market cap is ~$6B and Canon is ~$31B. I'm sorry, did I miss something....was that the world turning upside down and inside out? How does that make any sense? Growth numbers, scarcity of shares, AR/VR play, I get it, but...hutthumm....how about revenue, how about product? Yes OK lots of people use it....now, will they a year from now? In the end its a silly app that people use to kill time - unless I missed something, that is what it is. My kids use it, it makes people laugh, OK thats nice - I still see it as a novelty, nice to have but certainly far from "have to have". How does one short SNAP cause I'm all in on that play, but maybe I'm just getting old at 45. Granted, I don't get a lot of things, so please add SNAP to the list.

 

SNAP.com tag line:

 

Snap Inc. is a camera company.

 

We believe that reinventing the camera represents our greatest opportunity to improve the way people live and communicate.

 

Our products empower people to express themselves, live in the moment, learn about the world, and have fun together.

Not a pretty picture for the industry:

https://lensvid.com/gear/lensvid-exclusive-happened-photography-industry-2016/

 

Not too many years ago, casual photo takers would buy a compact fixed lens camera or entry level DSLR, and take photos when they travel or at family/friends type events. For most people now, the camera in their smartphone is more than good enough. We are going to Iceland latter this year and I asked my wife if she would want to get a small camera (like a compact with a 1" sensor). The answer was an emphatic NO, since she is fine with the camera in her Iphone 6 plus.

2 of my former local shops "Kaufmann's" and "Keeble and Shuchat" closed last year.

• One common problem is people going in looking at the camera in the store then asking the store to match internet prices or just going and buying from the internet store after looking at the camera in the local shop. So the local store does the sales work and demo, and the internet shop gets the $$$ sale.
  

• Then to add insult to injury, the same people who buy their camera off the internet, then comes to the local shop, and want to be taught how to use the camera that they bought off the internet, for free. Then they get upset if they don't get the free instructions that they "expect" to get from the local shop.
  

• The small local shops cannot sell the volume to get the high discounts, so they can actually buy their stock from a BIG dealer cheaper than from the distributor. I used to work at a hobby train shop, and our COST was higher than what Toy's are Us was selling the same train set for. Same problem.
  

BTW, this is not a new problem. The local shops had the same problem back in the 1970s with catalog companies and discount store. But today, internet buying is so common that the problem has been magnified tremendously. The big "box stores" (Staples and Office Depot) have done the same and killed off the small local stationary stores, and (Home Depot and Lowes) for the hardware store, and one must not forget Walmart the 800 pound gorilla in the dept store market.

 

Kaufmann's has since reopened in San Bruno, about 10 miles from their old shop in San Mateo. Fingers crossed, but I don't know how long they can hold out. Local guys need to buy from them, or he will go down for good.

Insufficiency of customers is the problem. The cell phone took a huge bite, internet sales took another huge bite. Poor customer service can take a huge bite. Here in Northern Calif we had Keeble and Schuchatt which was a big store and they suffered from all of that. They lost my buisness from poor customer service. Basically attitude from the sales staff.

 

The world is changing. I have purchased my last digital camera actually (not counting a cell phone). I shoot B/W 35mm film for a hobby and I have a cell phone which is quite capable. If film dies or gets to expensive then I will just shoot my cell phone. I used it today with great success. I saw the appliance my daughter was looking for. I snapped a pic with my phone and texted it to her. The picture was sharp, clean looking and had awesome color.

I liked Showcase and preferred buying there, one issue they did not bring up is a limited number of items compared to the NY stores. Which is another factor.

I liked Showcase and preferred buying there, one issue they did not bring up is a limited number of items compared to the NY stores. Which is another factor.

 

And that is yet another problem for the B&M stores. The more inventory they have to stock, the more $,$$$,$$$ is invested in inventory and retail space for it. And there is a limit to how much money they can invest in inventory. And there is a practical limit to how much retail space they can give the inventory, the store is only so big. Critical is how much of that inventory will move, vs. just sit there. Ideally they would stock just what will move/sell, quickly. Stuff that sits on the shelf just ties up money, as the resale value of that stuff keeps dropping. And the longer it sits, the more money it costs them. They take an educated guess on what they think will sell, and order just those items. Because, when a new model comes out, the value of the old model drops. And the shop would be lucky to just get back their cost, and most likely would loose money on that item. <br><br>

 

Same is true for cars. The car dealer would make an educated guess of what color and options he thinks will sell, then he orders and brings those in. He cannot afford to bring in every possible combination of colors and options available. If you want a car with a color and option list that is not on his lot, you have to special order that car. <br><br>

 

And the smaller the shop, the less money and retail space available for inventory.

<p>Two things that have not been mentioned are the march to mediocrity, and the transient nature of "the moment." As an old fart, I am an artifact of the "Kodak Moment" social ideology. 8, 12, 24, or 36 exposures--one selected the subject matter and circumstance differently. Photos were often a marker of something memorable--milestones, transitions, and other events that sketched in around "Maslow Moment" life experiences. Sure, lots of film could be burnt quickly--along with bulbs--but there was the cost on the backside of processing. With the advent of digital, a 5 year old could shoot a thousand frames and get a number of passable--and sometimes remarkable photos. My grandson did just that. Printing? I would hazard that the MAJORITY of photos shot today will never see paper--and an astonishing number never looked at more than once... They have become temporary things to be uploaded to social media, attached to email and text, and stuffed into online photo galleries--many to be forgotten and inhabited by ghost users. Let's call them an odd sort of digital ephemera... </p>

..................

<p>The ubiquitous 'smartphone' alleviates the need for any technical competence. Whatinhell do settings have to do with anything? These are handled by the camera hardware and software. Aperture? Depth of field? Citizens around the world are snapping away literally billions of images--some dumbphone drones cannot even get through a meal without taking a picture of it and blasting it out to their innumerable "followers." Yes, and the technological excellence! A 22mp photo captured through a droplet of plastic (or maybe even glass) slightly larger than a jewel in the 1914 Elgin pocket watch I carry. Meh. :oops:</p>

.............

<p>Something remarkable happened after WWII. As the servicemen returned, it was a new business world. Our government began to provide benefits for veterans under the GI Bill. This included college and other educational tuition, and home loans. The “new economy” had begun, and we were well on our way to the Baby Boom and the Cold War. A number of positive and not so positive social changes began to come from this new prosperity. With better production methods and the capitalistic need to keep making money, industry needed to begin producing consumer goods for American and foreign consumption. To fuel the ability to buy these things, an entirely different wage scale and class of worker emerged for both blue collar and the new white collar worker. The middle class was born.</p>

.............

<p>Not only did these new jobs and better pay allow the new consumer class of the country buy houses, appliances, and cars, it provided an income that had a high “discretionary” expense component. The American worker also discovered that he had to work less hours for more money than in times before the war. From this trend, men in the new suburbs found that they had leisure time for things other than wage earning. The basement, garage, and back yard now became the male domain. And what was done with them? Whole new worlds of pursuits were available and heavily marketed through advertising and popular magazines. These included woodworking, amateur (ham) radio & other electronics, astronomy, model trains, auto tinkering and rebuilding, boatbuilding, and photography.</p>

.............

<p>Moving beyond smaller scale hobbies such as stamp & coin collecting and model building, these pursuits were a perfect fit for the new suburban man. The sheer number of supportive industries was staggering. Tools, supplies, literature, the list went on. Government surplus from two wars fed the hunger of hobbyists for building blocks and parts. A populist technocracy came into being, and demanded newer and better. The gains made in photography and smaller formats launched many supply industries, and made the home darkroom one of the more popular venues. In through the 1960s and through the 1970s, the 35mm format pushed out the older medium and large format cameras for amateur use. Cameras, film, and accessories became more sophisticated and affordable for the middle class man. The first wave of hobbyists was graying, and a new generation of technophiles was learning from them and driving the direction of modern silver based photography.</p>

.............

<p>As noted in comments and the article Henry linked to, B&M was the local driver--and catalog stores, many which were back end operations to conventional window shops flourished. The rise of the internet, the decline of photography as a technical hobby, and the grafted-to-the-hand appendage the smartphone has become all have contributed to the other factors illustrated in the article. There is not so much curiosity as there was--as the overall technology of capture and printing does not really lend itself at the lower consumer end to such. Luckily, there are still--and an emerging cadre--that wish to explore wet photography--and take digital technique to new heights. Some things are simply gone. Portraitists are an eccentric holdover--even crap concerns such as Olan Mills are struggling in the new world of Susie Snapshot and her shiny consumer grade Nikon kit and an Epson printer--both bought at Walmart or Sams Club. And so it goes... </p> :rolleyes:

It's not the sales tax, it's the timeliness and availability.

 

B&H and Amazon learned early on that their website must have good descriptions, recommended accessories, but most of all up-to-date availability and fast shipping. You also have good ways to track the status of your order and shipping.

 

We have lost two big stores in Chicago - Helix and Calumet (Calumet has had somewhat of a rebirth in suburban retail stores). Helix dabbled in internet sales, but failed on several counts, the most important was availability. You just never knew if the product was back-ordered, taking 6 weeks instead of 3 days. Information on items was shallow, with no reviews, and you had to surf around to make comparisons between brands. Helix at least had reliable parking, which is almost unknown in Chicago proper.

 

Camera stores are not alone. The so-called "anchor" stores in malls, including Sears, Pennies and Macy's, are also dead in the internet water. Try to buy something on their website or see if it is in stock locally, and delivery is counted in weeks. Their business model is to bring you into the store, squeeze through crowded aisles and buy things on impulse. There's an electronic way to encourage impulse buying, but 80 year old marketing ideas die hard. I have driven to a mall many times, only to find the stock status was inaccurate. I'm told that "we don't stock that item, but we can order it for you." What a waste of time and gasoline. I respond, "I came to buy, and I don't need you to order it. I can do that and have it in a day or two." I'd rather spend the time to research a product on line, in the comfort of my home, than drive, park, only to be turned down. I don't need to hold it in my hand when good people on the web have already done that and reported (often) objectively.

It's not the sales tax, it's the timeliness and availability.

Those two certainly play a role but saying that sales tax doesn't enter the equation at all is closing your eyes to reality. Not saying it's a major factor in the decision to purchase online, more like icing on the cake. But it certainly presents a problem for the brick&mortar stores as it puts them at a disadvantage right from the start.

 

I don't need to hold it in my hand when good people on the web have already done that and reported (often) objectively.

No one online can (or did) tell me that the D7000 was impossible for me to hold comfortably. Ten minutes in the store did. No one online reported on the ugly green cast in a camera's EVF that I noticed in the store right away. No one only conveyed the impossibility with most current EVF cameras to track motion, 10 minutes in the store reveal it easily.

I read everything on the web about the Leica 35mm camera. However only when looking at one in the store was I able to find out it has poor eye relief. People on the web talk about how smooth it is, how brick like it is and such but they do not mention that you cannot actually see those frames lines if you wear glasses. Of course with BHPhoto you could just send it back. Anyway shopping at a store or on-line both have their good side. For me the closest camera store is 90miles one way. The distance is a deterrent. The tax on a new Leica MP would be $400.00. The consumer can choose to pay the extra $400.00 or not if you wish to buy on-line.

The tax on a new Leica MP would be $400.00. The consumer can choose to pay the extra $400.00 or not if you wish to buy on-line.

 

This is sure to get some riled up... :p

 

The $400 is not "extra." It is a sales tax levied by the state in which the seller conducts business with a buyer. Hundreds of millions--if not billions of dollars in revenue are lost by cash-strapped states due to internet sales. While I certainly enjoy the fact that some things are "cheaper" due to this--I live in NYS. For many transactions, I must pay the sales tax--such as B&H or Adorama. Most stuff on Amazon or Fleabay not. I feel such taxes should be paid by the buyer for the state they live in, and at that state's effective sales tax rate.

 

As a way of evening the playing field--from the perspective of B&M stores or revenue hungry states--some mechanism needs in place to collect sales tax for all 50 states. It surprises me that an enterprising venture company has not sprung up out of Amazon or somesuch--or that credit card companies are not already part of the collection process--and helps online sellers collect sales tax whilst distributing such revenue accordingly to whatever state the purchaser resides in. For a small fee of course--paid out of the revenue itself. This would be very similar to how transaction fees are applied to credit card purchases.

Here in California, one is supposed to pay a "use tax" when filing the tax return if a sales tax has not been collected by business with no presence in CA. Unless the item is more than $1000, one can choose to pay a lump sum amount based on one's income, or choose to pay for each item individually (which is mandatory if the purchasing price is above $1000).

 

Now ask how many pay that "use tax" with their income tax return? Or whether the lump sum amount is anywhere in the vicinity of what a point-of-sale tax payment would have amounted to?

 

So CA has that mechanism in place. Question is how effective it really is?

Edited March 13, 2017 by Dieter Schaefer

I pretty much buy everything right here in town. Freestyle Photo is in Calif and I buy film and chemicals from them. They add in the tax. A similar situation for my bicycle products. Other then that I pretty much go to Target and CostCo for nearly everything.

 

 

I would say the number of people that pay their CPA to add in tax for on-line purchases is hovering right around zero %.

I don't buy much equipment but when I do its almost all online. Retail stores often don't have what you want in stock, are often (around London anyway) in places difficult to drive to , hard to park at, and if I buy I don't want to carry around a box all day. Then there's the irritation of dealing with people who actually don't know much - or know less than the people writing the online reviews. I find I get more/better advice online, on the phone or via live message exchange. . And there are so few staff in stores these days that just getting someone's attention isn't always easy. If I need to hold something in my hand the most convenient way is to buy it remotely and return via post or a click & collect centre if it doesn't work out as you'd hope. And then online is probably cheaper. So for this last decade or more I've become convinced that not only is online cheaper but online is better too.

 

That decision does of course relate to what my options are. If I'm in NYC I still like going to B&H because its an experience and a real bazaar, even if you do often have to wait in line to speak to someone who may be enormously knowledgeable or might decide that today is a day to be brusque or laconic. On the other hand I live no more than 20 miles from London's remaining photo-retailers, and I'm probably in town once a week. You make that 50 miles with no easy rail service and where to buy becomes pretty darn obvious. Buy, try and send-it-back is today's shopping centre.

 

And a walk through any town centre here will tell you where people are increasingly buying. There aren't too many shops selling "things" any more. Its restaurants, coffee shops, charity shops, opticians, nail bars, hairdressers, phone shops, empty shops and so on. Places that need contact to deliver a service. So there's a big, global trend and photo-stores are simply caught up in it. Frankly there's more to mourn in the effective loss of retail in town centres than where I can get camera gear face-to-face.

David's take is 99% accurate. Here in Toronto, there are surviving photo retailers who grasp that price+selection can still draw customers away from the online souk. Happy they get it.

Henry thanks for posting. What is your take on the photo business?

 

I notice that Unique Photo in New Jersey is doing relatively well. Their store on Route 46 is relatively new, and the clerks tell me business is good. When I visit there are normally a good number of customers in the store.

For me I find that camera stores have no products that I wish to purchase. I shoot film and camera stores do not carry products to support my interest. I did visit a camera store earlier this month and made a big drive to go there. They had a Leica M6 in their on-line inventory but when I got there they did not have it. So I drove 90 miles and 5 minutes later I left the store and went home. I learned my lesson and will not do that again.

The big camera stores, the independent camera stores, the professional B&W and color labs, and the one-hour mini lab chains. It's sad to see them go. The other day, I put it in an order for a couple of small prints from my local Ritz (I just happen to live near one), and I had the option of picking them up from the nearby location (about 2 miles away) or the one other store that's left in the chain (about 1,800 miles away). I used to be able to send an order to a store 2 or 3 blocks from where I worked and pick it up an hour later. And the people there knew me, and I knew them, and they would take the time to print to my liking. No more . . . Just had a lot of prints made by Adorama.pix, and the quality is tremendous, but of course it's not as much as fun as it was going to my local Ritz.

Lets face it guys the world is changing. A cell phone camera can take a photo as good or better than any Kodak Brownie or Instamatic of yesteryear. Most photos that are taken today are really for the Web and that means they get compressed, squashed and mangled so they are only a shadow of the image the photographer took. Most Phone Cameras are made by Sony and are a variety of that companies Exmor range and typically cost less than $2.00. Sony only make money on then because they sell them by the million!

 

At the other end of the spectrum the high end cameras are doing quite well. The APSC cameras both DSLR and Mirrorless are getting more capable by the week. Micro 4/3rds is growing quite well and the medium format digital market is growing as the products become more affordable. But the type of user is changing too. The pro-photographer these days is also likely to be very computer literate and therefore will gravitate to on-line first. This is where the retailer needs to change to meet the requirements of these guys.

 

As a side note think about how much a savvy buyer can get for 100 notes? I say 100 notes very deliberately as this is a global market so it could be $100 or €100 or £100. Do your research and see what you can get for 100 notes or the equivalent in your currency, you may well be surprised. OK so it won't be the latest state of the art with all the bells and whistles that nobody really uses but it will be very capable. In my local town we have a very good local camera store who sell a whole bunch of good S/H equipment and a bit of new stuff from Canon, Nikon and Panasonic. About 85% of their product gets sold on the Web and their stock list is updated live from their sales. This is a way that many camera shops may need to go to survive.

 

Jim