Top Trend for 2021: Online Takes Over

January 14, 2021

COVID-19 greatly accelerated some of the trends that have been happening in the photo output market over the last several years. Most notably, the shift from retail to online ordering. This trend was already taking place as some retailers reduced in-store photo service or removed them almost entirely (Target, for example), but the restrictions and rules brought on by COVID-19 has put this trend on the fast-track. With consumers less willing to go into stores and even less willing to use a touchscreen kiosk, more have turned to online ordering during the pandemic. The move to online has also been accelerated by the increased promotions that online vendors have put in place during the pandemic.

RAR believes that most consumers who shifted to online ordering are unlikely to go back to using in-store kiosks to order products, at least on a regular basis. This will result in more in-store photo services. Most recently, Costco just announced that they are closing all their in-store photo services by February 14th. Walgreens, CVS, and Walmart have been committed to photo more than other retailers like Target and Costco, but the reduced volume and revenue generated in the store will make retailers seriously question the use of a significant amount of floor space for photo kiosks and printers. Some vendors, such as Kodak, have looked to touchless kiosks to encourage in-store use, but it may be too little too late.

One factor that has the potential to have a negative impact on online orders is a lack of confidence in the US Postal Service (USPS). The recent Holiday season was a debacle, as the USPS was overwhelmed with packages as more people than ever ordered online for mail delivery. Packages that should have taken days to be delivered took weeks. We tend to think this won’t have much of a long-term impact on order habits, but a negative opinion and lack of faith could lead to some mail delivery volume shifting to retail stores.

The bottom line? RAR predicts that within a few years it will become increasingly difficult to find a retail store with in-store photo services, as business continues to move to online only. The importance of centralized print providers will increase, but this evolution in the market could be bad news for companies like Fujifilm, Kodak and DNP that provide printers and minilabs for the retail stores. This trend could be a potential opportunity for independent photo retailers, who are steadily losing some brick-and-mortar competition as more of the nationwide chain stores drop in-store photo services.

This trend is one of the top five for 2021 that we published in our 2021 Road Map: Photo Printing Advisory Service document. Rise Above Research has also published road maps for the Photo Merchandise and Digital Imaging markets.