Boots is shuttering the bulk of its in-store photo labs in response to changing shopper habits. Can the retailer get its photo division back on track?
The pharmacy and beauty retailer has made a series of tough choices regarding its structure in recent years, having cut 700 back-office roles in June 2015 and last February stripping out 350 assistant store manager jobs.
Those cuts were attributed to the retailer’s need to “simplify” its offer and ensure it was “fit for the future”. With that in mind, plans to shrink its photo-printing business may not come as a big surprise to many.
Retail Week Prospect analyst Rebecca Marks says: “While this follows a cull of staff already, Boots, like many high-street retailers, will need to establish what areas of the business are most profitable, which drive the most full-price sales, and where it can cut costs to prevent the potential impacts of the volatile year ahead.”
The bigger picture
However, a Boots spokeswoman was keen to stress that this week’s news did not signal the retailer is winding down its photo division entirely.
“There is an appetite for photo service among our customers and there is still a place on the high street for photo, but we are trying to adapt our offer to ensure it suits changing customer behaviour,” she says.
“While it’s clear that Boots has developed its personalised gift offering in order to compete, it has not been able to replicate the product design expertise that PhotoBox offers”
Global Data analyst Charlotte Pearce
For the high-street stalwart this will involve pushing personalisation and gifting across its photo offer, such as allowing shoppers to print pictures from their smartphones onto mugs or photo sets.
However, has the pharmacy giant left its foray into photo personalisation too late?
Global Data analyst Charlotte Pearce says: “Grocers such as Asda and Tesco and specialists such as PhotoBox and Snapfish were all quick to develop their offering, and given the extent of discounting by these online pureplays, Boots has become more challenged in the market.
“While it’s clear that Boots has developed its personalised gift offering in order to compete, it has not been able to replicate the product design expertise that PhotoBox offers.”
So Boots has its work cut out to become the go-to retailer for shoppers to print out their quirky photo gifts.
However, the strength of Boots’ loyalty scheme could stand it in good stead to improve its photo offer.
Retailers including Sainsbury’s and O2 offer free personalised photo products to customers as part of their existing loyalty schemes.
It is clear that Boots could do more to make its offer more competitive.
“Boots has a loyal customer base which it has relied upon to keep its photo business running – in order to drive this forward, it must now develop its product offering further and make its products more stylised in order to compete with Notonthehighstreet.com and PhotoBox, which both have a wide range of personalised products available,” says Pearce.
“As this part of the business becomes more streamlined, Boots should also be able to make its prices more competitive with these online pureplays and grocers alike.”
“Customers have become very adaptive to using online for photo services, especially due to the competitive prices from the likes of PhotoBox and Snapfish – all-in-all, Boots cannot capitalise on this market’s demand”
Retail Week Prospect analyst Rebecca Marks
Boots will keep its in-store kiosks, which shoppers can use to print photos directly from their smartphone or a USB stick, across 1,000 of its outlets.
However, compared with the service-led offer that a specialist retailer such as Jessops carries and the competitive pricing from online rivals, Boots’ proposition could come up short.
“Customers have become very adaptive to using online for photo services, especially due to the competitive prices from the likes of PhotoBox and Snapfish – all-in-all, Boots cannot capitalise on this market’s demand,” says Marks.
Boots’ decision will not have been easy but, in a market where shoppers’ expectations are changing rapidly, it was a necessary one.
The question that it needs to answer now is how it will drive its pricing and personalisation to make its photo offer relevant to customers with more options than ever before.