EDITORIAL - A DYING BREED


CAMERA STORES - A DYING BREED IN STEPS
Business wise a camera store can be a financial disaster these days.  At one time Pinellas County,  FL  and Hillsboro County, FL  had eleven full line camera stores surrounding Tampa Bay.  Almost one camera store for every gun shop.  

Today there are NO camera stores, but hundreds of gun shops.  Both retail and pawn stores selling guns.  I was in my prime an active wing, skeet, trap, and competitive IPSC three gun combat shooter, but thats not what the bulk of these gun stores are selling today.   Due to the paranoia and the beating of the NRA misinformation drums, combined with the temperament of the country, the years of hatred and racism building and then ignited by social deviates, we have had a share of problems. Guns are not a solution, no one wins, one dies and the other goes to jail.
I had a camera store, serviced others wholesale wise, and many of my friends had the others.  

•   At the yearly trek to Vegas, for the PMAI trade show we met with our Nikon Representative, who became the US sales manager.  He told us about “Big Box Stores” and the effect they would create eventually dominating and controlling the US retail market.  For every flagship pro camera level sold, the big box stores sold a hundred newbie or entry level cameras.  

•   Later the growth of the Web with players like B&H, and Adorama who in one year  a decade ago captured more than 3/4 of the total camera market.  Close to 787 million out of a 1.3 billion dollar market was big money in those days. Its more today, it destroyed the local camera store.  

•   And then came Amazon.  Needless to say,  what I spent on gasoline, finding a parking spot  a mile from any stores front  door and mixed  shopping meaning five stops and starts, and that parking on a 95 degree day with a heat index of 105 was no fun.  The gasoline saved is enough to pay for my prime membership.  Heatstroke avoided, thats just age.   Many stores were relegated to malls for the traffic that malls created.  It’s not any more, easier to buy on line where the competition is and the more important, pricing and withAmazon choices.  And malls traffic is sevres and estimate are 8400 stores will close as malls are expensive. 

•   And then the smartphone with advanced camera features sealed the fate of the small camera end of the business.  I got out of the retail end in time.  As of last November there are only two stores left on the entire West coast of Florida.  With no competition the people further look for what they want on line and surf the web.


REAL NEWS, NO TWEETS FROM NIT-TWITS

•   The next surge will occur when the industry giants implode.  Nikon and Canon (Read the Japanese Financials for the real stories not rumors) are in decline significantly for many reasons;  due to loss of competitiveness; lack of Chinese customers buying SLRs in Japan; compact point and shoots replaced by cellphones with ever better cameras being built in combined with a method for sending it; and a lack of retail stores to sell the higher end complex cameras.  

•   Serious enough for camera divisions to be up for sale and the selling off of prime subdivisions. Some of the smaller manufacturers have consolidated.  Some might not be there much longer.  Canon stated its intention to shift more production to Japan back in November. At that time the company quoted an increase to 50 percent domestic production over time.  Canon isn’t the only company looking to increase its production in Japan. Both Panasonic and Sharp are considering increasing their domestic production, though neither have explicitly confirmed plans to do so. 


•  In an article in Fortune magazine Canon has expanded it’s theology. 2016 marks the inaugural year of Phase V. Over the next five years we will expand the ambitious reforms we have promoted to date. I want the Canon of 2020 to look completely different from how it does now, completing a transformation into an all-new Canon capable of achieving new growth.

Across our business operations we are strengthening and expanding the growth engines we acquired through diversifcation and M&A. In manufacturing, we are refocusing on Japan- based production, implementing advanced automation while maximizing our in-house production capabilities. 

At the same time, IoT, big data, artificial intelligence and other next- generation technologies are enabling us to develop a new production system. In R&D, we are embracing open innovation to integrate leading-edge technologies from different fields. 

And as we work to complete our Three Regional Headquarters management system, we are restructuring our worldwide sales network to capture the dynamism of global economic growth. Along the way, Canon remains committed to cultivating global human resources that enable us to work successfully across international borders. 

Canon has purchased OCE, a leader in large printing format as digital is now on a par with offset printing. Large printing is a 80 trillion dollar a year business.  The now own TOKKI  a leader in touch screen devices and production of OLEDS.

Another acquisition is MOLECULAR IMPRINTS, now called Canon Nanotech will be shipping its first new machines this year for the growing IC market.   They now own Milestone industries. This will place them strong in the network camera business, surveillance  production monitoring, market research and identification and last but not least TOSHIBA Medical Systems, a leader in radiology.

Quite an aggressive forward thinking company...

•   Convenience, many millennials so accustomed to buying and throwing away things, like their smartphone every two years, costing 600-900 dollars, the price built into the ridiculous monthly fees included in that great contract.  Thats what ate up the hobby, fun, sports, photography available cash and time.  You not only have a phone, you have a camera and the ability to transmit.  

•   Credit Managers lost jobs after NIKON and CANON took hits and had to restructure when two of the Big Boxes, Circuit City and the horribly run RITZ chain cost Nikon and Canon like 28+ millions in advances when they folded.  This big box deal backfired with those two majors and really cost the independent stores because both raised wholesale prices to further hinder, and to accommodate the losses.  

•   The few independent stores in the nation now have less reps or none at all, less deals, lower profits, less credit deals and most large dollar purchases by the retailer are due 30 days period,  and failure to pay on time means no further orders.  With fast model changes, being stuck with a dated model, in some cases quality as in the case of Canon base lenses you have problems, no you have nightmares.  Profit margins are down between Nikon and Canon, you cannot stay in business without a lab or selling ancillary higher profit junk rebranded and overpriced distributed directly from companies here and made in the land of JUNK’s. 

•   Several distributors acting as group buying advocates do a good job with rebranding and repackaging the cheap stuff, and I mean real better packaging to look expensive, and retaining a higher false profit margin.  But what they are selling is junk,  keystoned four times and discounted 40% to get you in.

•   Just like the TV ads, WAIT! Buy one and get the second free, just pay the S&H charges. HINT: S&H is what the second and first thing is really worth.  3-4 weeks delivery, thats because it comes from China. No warehousing on US property, no tariffs and so forth.

•   Killer for the little guy with a store. The margins to dealer are below 18% and that covers nothing after discounts and credit card fees.  Lets call it what it really is, the other culprit, the smartphone and connectivity has replaced addiction wise the cigarette as the nemesis of our society.  

•    Both cigarettes and texting can kill.  Actually cigarettes will kill more but texting kills younger citizens and faster.  Both are distractions. But Nikon and Canons poor management and bad business dealings killed the independent retailer.  It reflects in their positions today.

•   Nikon dropped a couple of very troubling bombshells today. The first was a “Recognition of Extraordinary Loss” due to company-wide restructuring; the second was the cancellation of the much-delayed series of Nikon DL compact cameras announced in February of 2016. They made the mistake of going against Fuji and SONY with their award winning cameras in this class and could not top them.

•   Canon will follow suit, just a matter of time.  I will be available working from 6:00 am to 12:00 (Noon) daily  by phone and email the rest of the day having fun knowing my decision to get out of retail and become a service suits me just fine.