RETAILERS DEVELOPING CONVENIENCE AS FILM ANGLE

JUDY CORCORAN

Mass merchants and drug chains present stiff competition for supermarkets when it comes to film processing, but for many consumers, the convenience of dropping their film at the supermarket wins out, said retailers.

There is also strong evidence that promotions -- from a basic free set of prints to an elaborate sweepstakes -- do increase consumer awareness and, ultimately, the number of rolls processed.

Richard Malousek, vice president at B&R Stores, Lincoln, Neb., believes the film processing business is promotion-driven because the quality from most suppliers is comparable.

"It's become an issue of convenience -- who's mentioning the service the most, and who has the lowest price," Malousek said. "Price is third. I don't see people complaining because the price isn't there. I think the promotion is the key."

Kodak Premium Processing has just concluded a huge four-week promotion with NBC Television that offered consumers an instant-win game card for each roll of film processed. The prizes included a walk-on appearance on an NBC show, trips to Hollywood for the taping of an NBC show, framed cast photos from shows such as "Friends" and "Third Rock From the Sun," NBC T-shirts and discounts on Kodak frames and photo albums.

According to Gary Orosco, director of sales promotion for Qualex, Kodak's film processing subsidiary, approximately 35,000 mass merchants, drug stores and supermarkets participated with in-store displays such as counter cards, window banners and mini-posters.

The promotion had the backing of some NBC prime-time and daytime spots and a three-week radio campaign in six major markets: Chicago, Detroit, New York, San Francisco, Seattle and Washington. The radio spots tagged local supermarkets, such as A&P and ShopRite, along with drug stores and mass merchants.

Promotions that give away a roll of film, a second set of prints or a free enlargement are still popular at most stores. What works best, though, depends on the customer, said Kim Doubt, the manager of the photo shop at Friedman's Bi-Lo Markets in Butler, Pa.

"Some come for the enlargements and some don't care. Some like the quality and some just like the convenience," Doubt said.

Scolari's Warehouse, headquartered in Sparta, Nev., has just finished a promotion with Fuji Film where they offered a free roll with processing.

"It was a handy promotion for us that did better than we expected," said Mike Van Brocklin, nonfood buyer, Scolari's. He estimated that the business had increased 20% to 25% because of the film promotion.

Kim Botkin, nonfoods director, Gerland's Food Fair, Houston, said that they used to give a second set of prints for free if customers developed their film on a Tuesday or Wednesday. "This seemed to help our business," he said. "But then we changed suppliers and didn't offer the free prints. Business has never been the same."

Van Brocklin is preparing for a rush of business in the next few weeks because of a store tie-in with a local hot-air balloon race and the Reno Air Races. Scolari's stores will process any film for $2.99 during the weeks after the events.

"This is a big promotion for us," he said. "The event is huge, and everyone takes pictures of the balloons." The promotion, sponsored by Fuji, is supported by a full-page ad in the local newspaper.

"At Easter and Christmas, we take pictures of the kids and offer an enlargement for purchase," said Bi-Lo's Doubt.

"We may do this for Halloween but nothing is definite yet." Similar promotions are usually advertised in the local newspaper, she said.

At Foodtown in Baytown, Texas, Gary Gerza, owner of the photo franchise, plans to run a tie-in promotion with the video department, where consumers can get a discount on developing their film if they rent a certain video. He plans to advertise the promotion if the video department splits the cost, he said.

Harris Teeter, headquartered in Atlanta, also plans to tie-in fourth-quarter promotions with holiday videos and support them with newspaper advertising.

Most retailers feel there's a huge opportunity to develop the photo finishing business into an even bigger money-maker.

Malousek of B&R Stores, who runs double prints for free and tries to feature the promotion in the general merchandise ad on a monthly basis, feels that whatever they're doing, it's not enough.

"It seems that everyone and their uncle is shooting at you with film developing, and we're not doing enough to stimulate our share of the business," he said. "We plan to do more."

Malousek referred to competition from all fronts but mostly from Wal-Mart, Shop Co and Target. "That's what is saturating and diluting the market," he added.

Many retailers reported that one-hour photo was not as big a draw as they had thought it would be a few years ago. Malousek said they had tested it in some stores and were disappointed.

Others found that competing one-hour stores had taken a big bite out of their business.

Advanced Photo System (APS), which requires its own camera and special film, doesn't seem to be catching on too quickly, however.

"It's too expensive," said Gerza of Foodtown. "We would need an extra $6,000 machine, and you need a new camera and the processing costs $15. I think APS might go the way of the Captiva or One-Step film, which were unsuccessful."

Scolari's is set up for APS but hasn't started promoting it yet. "It's still pretty quiet," said Van Brocklin.