Although the digital camera market has entered its mature stage, the exciting technological developments, keep bringing new and repeat customers to the stores, concludes Keri Allan.
Last year saw the largest number of digital cameras ever sold at over six million units in the UK, according to GfK figures. This represented a growth of over 6%, and for a market that has been continually growing since 1997, this is a strong performance.
However, many manufacturers, retailers and even GfK itself believe that we have now witnessed the biggest year ever of sales of digital cameras, and that 2007 will see sales begin to lower.
“Last year saw the market value decline in December by 1.7% compared to December 2005, and the lowest average price recorded for a DSC (Digital Still Camera) compact and the body of a digital DSLR (Digital Single Lens Reflex) – £113 and £447 respectively,” comments Anthony Norman, business group director, GfK. “January 2007 started the year with a slight increase in unit sales of 0.08% when compared to January 2006, but the month showed a value decline, down 6.3%. Having now potentially reached maturity and seeing its value drop away, what will soon follow is a slowdown in volume sales.”
“We currently estimate that around 55% of people in the UK have a compact digital camera; which doesn’t include Digital SLR, and the same percentage being second and third time purchases,” adds Hiroyuki Matsushita, senior product manager, DI Business Unit, Sony. “We’re estimating that the growth will be minimal for the ’06 financial year (ending March ’07), with a decline for the financial year ’07 (ending March ’08); both in volume and value.”
Indeed, it is fair to say that first time purchases of digital cameras are now, or have recently, peaked. So where does this leave the market and specifically the independent retailer? After a boom period in digital sales, larger in both volume and value than photo analogue, now the market faces its first real product challenge.
The digital camera market is now entering a new phase; one where first time sales have already peaked. However, consumers will now be making their second or even third purchases in this field and therefore they will be more conversant in the technologies and demand more for their money. This means the pressure on manufacturers to provide added value is growing, and they are doing so by improving features.
“Upgrades and new features will be key drivers for 2007; for upgrades there is growth potential for sales of DSLR and lenses, on the features side, pixel count up to 10mp is now widely available and in demand. Then there is image stabilisation, Wi-Fi and optical zoom,” states Norman at GfK.
For example, Samsung offers a broad range of new features and technologies to lure in second and third time buyers. As Robert King, commercial director Samsung Camera’s highlights: “Samsung is adding value by including features such as its new travel guide, face recognition and touch screen technology as well as Advanced Shake Reduction (ASR), movie mode, and PMP for use as a music player. These are all features that excite the consumer.
“Consumers are also looking for very sophisticated designs as well as strong features, product inter-connectivity and ease of use which are also very important decision makers at the point of purchase,” he adds.
Indeed, all the manufacturers are promoting the benefits of their technologies at the moment. Fujifilm is another such company. It has focused on features like its high ISO sensitivity – the measure of how sensitive a camera’s sensor is to light. Good sensitivity means that the camera can be used to take images in low light without a flash; meaning an end to the ghostly washed out glare that can occur with built-in flash. It also means fast shutter speeds can still be used in limited lighting, enabling action shots to be captured without blur.
Many companies; Fujufilm and Sony included are also focusing on technologies such as Face Recognition and the benefits this brings. It works by triangulating eyes and mouths to detect the faces, and then sets the focus and exposure levels to get the best possible image. Often when multiple faces are in one shot, the focus seems to appear between the faces, but with this technology, you know you will get the best possible ‘people shots’ with smiling faces being totally in focus.
Finally worth noting are Sony’s two other main highlighted features of this spring; its Double Anti-Blur technology which uses an optical image stabiliser as well as a high sensitivity setting to avoid image blurs, but also its high definition output technology.
“So many people now have HDTVs,” says Matsushita. “Before, we could connect old digital cameras to TV sets, but with a low VGA resolution. But now customers can enjoy high definition quality images on HDTV screens, giving another new way for customers to share and enjoy their images.”
The pixel count issue
It’s worth remembering that many consumers believe that more pixels mean a better image. Independent retailers are well positioned to clarify this issue for their customers.
”There is still a tendency towards ‘big pixel’ cameras in the industry today, as this can be a convenient yard stick for consumers,” a Fujifilm spokesperson explains. “However, there comes a point when increasing pixel count alone can actually be detrimental to a camera’s performance – fitting more photodiodes on a sensor that remains the same size means those photodiodes are smaller and can struggle to maintain the same image quality. In addition, the increased file sizes produced by larger pixel sensors demand more from a camera’s processor. If the camera’s processing capability doesn’t match the sensor’s pixel count, the increase in pixels can adversely impact on the performance of the camera. This is why consumers should be careful to purchase their cameras from reputable brands and retailers.”
Sales opportunities don’t just end with the camera’s themselves; there is now a plethora of accessories available for this sector that can help retailers garner extra, highreturn sales.
New cameras, and even those purchased in the past, can be enhanced by various accessories. For example, higher storage capacity can always be useful. Accessories to offer different viewing possibilities and also hardware and software allowing consumers to edit images at home are just a few of the options for the consumers.
We can already see the appeal of the accessory by simply looking on the shelves of both ‘brick and click’ stores as Norman puts it. Just some of the popular devices include printers and multifunctional devices, external disc drives for use with or without PCs for image storage, software for photo editing, PCI slots for PC USB connections, and even USB routers for peripheral devices.
“Independent retailers can benefit from stocking a full complement of media cards, accessories and paper, which can be sold along with digital cameras,” highlights a Fujifilm spokesperson. “Fujifilm cameras can be sold with a range of cases, including all-purpose and luxury soft leather. Many of our compact digital cameras have a dedicated waterproof housing, which is sold separately. Fujifilm also offers a range of memory cards, including Secure Digital and Compact Flash as well as our proprietary xD-Picture Card format. Further to this Fujifilm provides a range of other useful accessories, such as the World Travel Adaptor and USB charger, which can be an attractive purchase for photography enthusiasts.”
Then there is also a range of accessories that can be sold as add-ons to purchasers of digital SLR cameras specifically. “Digital SLR cameras are just part of a system that offers additional sales opportunities through flashguns, lenses, bags and batteries and the Samsung GX10 is a fully featured SLR at a very competitive price point that can offer additional sales through its accessory range,” notes Samsung’s King.
Never forget the battery purchase either. If you highlight batteries that are best suited to digital camera usage, such as Energizer’s Ultimate Lithium range, consumers will be happy to purchase them, making you an additional sale. This range for example, lasts seven times longer than standard alkaline batteries in digital cameras, meaning they are perfectly suited to such high-tech devices.
All in all, sales of digital cameras may have now passed their peak, however the industry still looks to continue to be a popular and therefore buoyant one. If retailers make the most of sales opportunities by highlighting technological features and useful accessories, it can be a very lucrative market for them.
Manufacturers are also always happy to offer advice on making the most from sales. For Matsushita at Sony, it’s all about seeing the features with your own eyes:”I really believe that in-store demonstrations are the key,” he says. “For instance, with the high definition output technology, it’s easy to just say ‘this is a high def image’. But seeing is believing; even I myself was surprised the first time I was showed an image on a HDTV. There’s a big difference. Personally, I think it’s an excellent demonstration of HD TVs too, and is good for cross promotion.”