July/August 2007� Graphic impressions
Harold’s Photo Centers, Inc. began printing photo-based
greeting cards on xerographic digital printers in the mid-
1990s, to advance the eight-store chain’s regional photo
finishing leadership.
Barksdale School Portraits acquired its first xerographic
digital press last year to expand its yearbook printing busi-
ness as a complement to traditional school portrait busi-
ness.
And just this year, Filmet brought in the first xerographic
digital press for its professional image processing business,
to broaden its line of photo specialty products.
These are just three of the many, recent local decisions
that quickly are creating a new market space for digital color printing
of photo specialty products, which include just about any alternative to
a standard, one-sided print on photographic paper. The most popular
today are photo cards and specialty prints, such as enlargements, framed
photos and collages. The specialty products projected for the greatest
growth, according to market-research firm InfoTrends: photo books and
calendars.
Driven by increased use of digital cameras, the new
market space cuts across traditional industry segments
such as retail and professional imaging services, com-
mercial photography and commercial printing. It addresses
an opportunity for specialty products in North America
that is projected to grow at an impressive compound
annual growth rate of 24.5 percent through 2010, accord-
ing InfoTrends.
A closer look at the transformations under way at
Harold’s, Filmet and Barksdale follows, offering insights
into this rapidly developing opportunity.
Retailer Becomes PrinterTraditional film processing peaked at Harold’s in 2003, according to
Bob Hanson, president, and fourth-generation family owner of the Sioux
Falls, South Dakota-based chain with stores in South Dakota and Iowa.
“The transition to digital happened more quickly than people predicted,”
he said. Film-processing revenue subsequently has dropped by about 20
percent annually, to less than half the peak volume.
But Harold’s had a head start on producing the specialty products cus-
tomers now demand. Having long relied upon photo finishing as its cash
cow, supplemented by portraits and merchandise sales, Harold’s expanded
its finishing services in the mid-1990s by experimenting with xerographic
digital printing of greeting cards. When film processing nose-dived,
Hanson said, “We jumped in (to digital printing) with both feet.”
From 2005 to 2006, digital print volume doubled, leading Harold’s to
add a second Xerox DocuColor® 250 Digital Color Printer/Copier, invest
in a variety of finishing and binding equipment and remake a warehouse
into a print production facility. “Now we’re a short-run print shop,” he
said, as well as a retail photo center.
Harold’s customers use in-store kiosks or the firm’s Web site to submit
digital files and order a range of photo products. All-occasion greeting
cards are the most popular. Calendars, once outsourced, are now printed
more profitably in house. And books are the next — and current — big
growth item, he said.
Digital Printing Is Transforming the Business of
Processing PhotosConvergence of Digital Photography and Digital Printing
Creates an Exciting, High-Growth Market Space for Digitally Printed Photo Products
by Brian Segnit
Brian Segnit
Harold’s Photo Centers’ eight retail locations — including this one in Sioux Falls, South Dakota —
are “going digital.”
July/August 2007 Graphic impressions �
Film processing is so lucrative that digital
printing alone isn’t replacing the revenue lost
from film processing. But growth in portraits
and merchandise sales coupled with the upside
of new photo specialty products are keeping the
chain competitive, Hanson said.
Bridging Two MarketsFilmet of Tarentum, Pennsylvania, near
Pittsburgh, long-ago morphed from film proces-
sor to printer. Formed in 1910 as a commercial
photo lab, today the firm’s display printing
division has 20 presses and accounts for about
75 percent of the company’s business.
On the photo side, Filmet processes images
for about 1,000 professional photographers,
and provides specialty services that include
greeting cards, acrylic ornaments and framing.
To improve those offerings, Filmet acquired its
first digital press for imaging services in May, a
Xerox iGen3® 110 Digital Production Press.
“A lot of people today, especially young kids,
look for more of a magazine-like print quality in
their photos,” said Michael Hoffay, vice presi-
dent of marketing and sales, Filmet. “They want
a baseball card that looks like the real thing, not something shiny. High
school seniors want memory books with all of their senior photos, not just
an 8x10. Even wedding albums are moving to more of a contemporary
look that ties to the whole scrap-booking trend.”
That’s where digital printing plays. “The iGen3 image quality has more
of that offset-print look that our customers want,” Hoffay said. It also has
strengths that are critical in the display business, including its capability to
handle a wide range of plastics, vinyl and thick card stocks, and a large,
14.3x22.5-inch sheet size, for point-of-purchase displays.
But most of the digital press’s volume will be dedicated to the photo
business, Hoffay said. Existing applications like proof books and sports
posters are being transitioned to digital printing, lowering costs, and new
applications, such as photo books, should be on-stream when the firm
acquires binding equipment later in the year, he said. Anticipating higher
volumes, Filmet’s plant already has added a second shift.
Portrait Maker to Service Provider
A new path to success at Barksdale School
Portraits, Aston, Pennsylvania, near Philadelphia,
is to provide not only photos, but also photo-based
services, such as ID cards and yearbook printing.
Barksdale School Portraits, which began operation
in 1922 as what is believed to be the oldest school
portrait company in service, today counts about 600
elementary and middle schools as customers.
“A few years ago, we began outsourced printing
of school yearbooks, not so much as a money-
maker, but to keep the competition out of our
accounts,” said Wayne Barksdale, director of
marketing and fourth-generation member of the
company’s founding family. “We recognized pret-
ty quickly that mistakes put our whole business at
risk. We needed more control of our destiny.”
So Barksdale acquired a Xerox iGen3 press
in August 2006. Yearbook production quickly
grew from 55 outsourced projects in 2005-2006
to 97 in-house jobs this year. Barksdale expects
to produce 200 yearbooks next year, and 500 the
following year.
A new twist is that the company has developed
additional iGen3 applications, which are the basis
for its new, services approach. A personalized mailer delivers photo proofs
to students more elegantly and at considerable savings over the previous
windowed-envelop package. Desk-blotter-style calendars and digitally
printed photo ID cards add to the menu of services Barksdale offers. “We
want to be providing four or five items to our customers, so we become
more valuable as a partner,” Barksdale said.
So far, the strategy is paying off with a strong customer retention record
and growth of about 30 percent last year, which “is practically unheard
of in this industry,” Barksdale said.
True, but in the emerging market space for digitally printed photo
specialty products in which Barksdale, Filmet and Harold’s now play,
such growth rates are closer to the norm. ■
Brian Segnit is manager, Digital Photo and Book Printing Marketing
of the Worldwide Graphic Communications Industry, Xerox Corporation.
He can be reached at [email protected].
These three yearbook covers and the inside page on the upper right were printed by Barksdale School Portraits
on its Xerox iGen3® 110 Digital Production Press. In-house production gives Barksdale more control,
enabling the business to grow.
Among the photo specialty products Filmet produces on its Xerox iGen3 Press are
sports cards, greeting cards, calendars and puzzles.
Harold’s produces greeting cards year round on its Xerox xerographic digital printers for occasions such as births, weddings, holidays and graduations — and for simply saying, “Thank you.”
Barksdale School Portraits produces calendar desk blotters in two sizes — 14.33”X20.5”
and 12”X16” — on its Xerox iGen3 Press.