Hewlett-Packard (HP), a world leader in home and office printing, has been actively establishing its Retail Publishing Solutions (RPS) business around the world since 2006. HP RPS now has publishing solutions in place in supermarket chains and other world-leading retail outlets across Europe. Its market leading solutions include HP PhotoSmart Express instant photo printing units and HP Photo Centre, for creative products like photo books, posters, post cards and beyond. HP is actively spreading the message about its accomplishments and successes in retail publishing, and reaching out to new channels and partners. In the UK, HP has been working in partnership with Tesco to evaluate the retail publishing opportunities presented by the UK’s number one supermarket chain. Andreas Tschunkert, EMEA Product Manager of HP’s Retail Publishing Solutions business, spoke to The Grocery Trader.
The Grocery Trader – First of all, Andreas, to set the scene, what exactly does Retail Publishing cover, as you define it?
Retail publishing represents the next evolution in photo printing, enabling customers to create personalised photo products using powerful but very user-friendly software. Single and multi-image prints, posters, calendars, greeting cards and photobooks can be produced and delivered to customers within minutes. HP solutions make it possible for retailers to expand well beyond film and to offer high-margin photoservices without incurring the additional costs associated with finding and training highly skilled store staff and other infrastructure.
GT – With digital cameras and camera phones now universally available, we’re used to printing out our own digital photos at home, or if we want special finishes for our photos, in our local store. We’ve also been able to buy good quality instant photos and memorabilia with photos on at theme parks and visitor attractions for several decades. Are your Retail Publishing Solutions a combination and a development of these technologies, or are they a totally new proposition?
It’s true that technological advancements have shaken up the photo retail market. Digital photography changed everything; the way we take photos, store them and print them. When digital photography was first introduced, retail analysts predicted the decline of in-store photo retail, assuming consumers would favour home publishing. Of course this didn’t happen, and the photo-retail market is still growing today. We’ve seen that customers want to have choice when it comes to digital photography – everyone has different preferences for where to print and what to print, and the choice may vary from situation to situation, person to person. For example, pictures taken during family holidays tend to have more sentimental value than quick snapshots taken at a Sunday afternoon barbecue with friends. Retail publishing offers retailers the opportunity to deliver the broadest possible range of photoproducts for their customers, from themed photobooks for kids to greeting cards for those special family moments.
GT – Speaking as someone who hasn’t bought photographic film for years, is photographic film developing and printing still around? Do you (HP)) provide the equipment for film processing and printing as well?
Even though the market share of ‘traditional’ film continues to shrink, there are still business opportunities around analogue photography in various markets. HP does not want to exclude these customers from the new possibilities of retail publishing, so we are offering film scanning services and workflows to ensure flawless experience and integration.
GT – The big retailers are pretty demanding, when it comes to taking on new services. What kind of returns can retailers expect from an HP Retail Publishing Solution?
The benefits of retail publishing should be viewed in broader terms, because the retailer can also enjoy improved margins, an increase in repeat customers and greater customer loyalty. That said, HP RPS have proven to double to triple photo department profits and revenues in year-over-year rates, even during a deep recession, after introducing these new services to their customers.
GT – That’s pretty impressive. What kind of outlets are these figures for?
HP offers the largest Retail Photofinishing and Publishing portfolio on the market, enabling retailers to install appropriate solutions in most, if not all, of their stores, from small to large branches. Today RPS has publishing solutions in place in world leading retailing outlets and supermarket chains across Europe.
Firstly, HP RPS are proven to deliver outstanding results in terms of revenue, margin and customer satisfaction. These are all key factors, but equally important is that we are removing complexity for the retailer, helping them to manage and operate the business. All solution components and technologies are HP-owned, and this is a major advantage. We also offer environmentally-friendly HP dry printing technology and the HP Remote Management System – enabling Remote Service Management with the shortest response times and Remote Business Management, which provides detailed business reporting data to ensure more effective business management. Finally, HP RPS include a consumer workflow experience awarded the most innovative in the industry and appreciated by retailers for its leading ease-of-use, speed, and up-sell capabilities enabling them to pass these advantages and cost-savings to their customers.
GT – Can you just remind us about the HP heritage in different IT-based markets? How big are you in home and business computing, and printing? How do Retail Printing Solutions fit into HP’s overall business and your product strategy?
HP is the world’s market leader across a range of IT and Imaging & Printing market segments. For example, HP’s Personal Systems Group (PSG) has achieved the leading market position in PCs and notebooks worldwide. IT organisations around the globe rely on HP BTO Software (Business Technology Optimisation) to keep their business running – among these, 98 of the Fortune 100 companies – and it also provides the basis for RPS’ Retail Management System (RMS); and 80 per cent of photobooks worldwide are produced on HP Indigo machines. Large format printing is another area in which HP is leading the market. RPS is the logical extension to our business, whereby HP is leveraging its combined IT and Imaging & Printing expertise to deliver innovative solutions for a very attractive market segment.
HP combines a global profile with a very strong local presence. Our EMEA HQ is in Germany and the UK HQ is located in Bracknell, in Berkshire.
GT – As EMEA Product Manager, are you directly involved with the major UK-based accounts like Tesco?
Every retailer is unique in its business, positioning and requirements, and we are very active in supporting these partners. Our solution supports those different requirements and offers strong differentiation between various retail solutions. We have a local team for day-to-day involvement with customers like Tesco, but as EMEA Product Manager, I am actively involved with all of our customers and visit UK customers frequently.
GT – How big a market in value terms is Retail Publishing Solutions in the UK, compared with other countries? Why is it different?
Compared to other European countries, the UK market is ahead of the curve in terms of market value, customer experience and expectations. This is why our solutions have been so well received locally.
GT – Where do you develop the RPS technology you offer here? Where do you manufacture it? Have you tailored your UK offering for the UK market, in any way?
HP RPS, from the innovative dry ink technology to the software, are fully developed and owned by HP. We have development and production sites worldwide but also employ a strong software team in the UK. We have not tailored our solution to the general UK “market”, but to UK retailers and their customers in particular. This is more important, as differentiation is a key consideration for our partners.
GT – What different set ups do you offer for different stores?
HP offers a broad range of self-service, back-of-counter and online publishing solutions with modular options to deliver both traditional and creative photo products. HP’s Express Kiosk, Microlab, Photo Centre, and Minilab solutions are easy for customers, easy for staff and easy to operate. We even support print-to-store and remote fulfillment services. The benefit of the latter is that retailers can offer the broadest portfolio without needing to actually have all the printing equipment in-store.
GT – What size of outlet would each of these solutions be right for? What floor space does each require? What area of the store should the retailer place them in? How do you work with retailers to assess the best solution for each store in their estate?
The size of the HP solution varies from small to ‘flagship’ options. Before any deployment, our account teams engage in thorough discussions with the retailer and carry out various studies to define the ideal solution for each particular store size and layout.
GT – Which retailers have you worked with around the world to explore the RPS opportunity?
HP partners with the major players in each category, ranging from hypermarkets and pharmacy chains to CES stores and specialist photography chains. We are working with Tesco in the UK; Casino in France; MSH in Austria, Hungary and Turkey; and have installed Express kiosks across the network of Real’s German retail outlets.
GT – Can you also give us an overview of your work with Tesco?
HP announced its partnership with Tesco in March 2009. The relationship will see the retailer roll out HP RPS to more Tesco Extra stores across the UK. The collaboration will allow customers to choose from more than 300 creative print projects, print photos or order personalised gifts conveniently as they shop for groceries.
GT – How do you supply your RPS products to retailers in the UK – do you supply direct or through distributors and channel partners? What sales, installation and service infrastructure do you here?
In terms of the small and independent retail business market, we have a partnership with Swains-RPS Ltd, a very capable collaborator in this space. Our key flagship accounts are managed directly but HP has also certified ACL Ltd. to handle service and support, including installation, for all our UK accounts.
GT – Any plans for offering these solutions in other places with high pedestrian traffic – railway stations, airports, ferry terminals, motorway service areas, theme parks, visitor attractions, shopping malls?
We continue to focus primarily on the retail market and with those players who are already involved in providing photo and publishing services today. High footfall alone does not guarantee a successful photo business, so we feel there are very few opportunities beyond retail at this time, but it is a space that we continue to watch.
GT – How does the consumer use this service: is it self-service, do the store staff do all the work, or is it somewhere in between? Is it a case of bringing your camera, your phone or a USB stick to the machine?
For traditional 4”x6″ photos, the customer experience can be as simple as walking up to a self-service Express kiosk and following the prompts, but as soon as creative printing enters the equation, customer support becomes more important to ensuring a smooth customer experience. We are doing both. We feel it is important to free up store staff from ‘non-productive’ machine operating and also to train them accordingly to be able to assist customers in all circumstances.
GT – Back to the consumer benefits, what do you offer shoppers in terms of ‘content’ – besides bringing their photos to be printed, can people come to the store and buy readily available images from films, album covers etc to print onto posters, mugs, T-shirts etc? What sort of content is available via your systems?
HP offers managed content but there’s an important distinction to note here versus what you have described. We have agreements with content partners and systems in place that allow us to provide licensed content services to our retail partners. We are also able to manage content and copyrights via our systems. Instead of infringing copyrights, we enable customers to enjoy completely legal and premium content. We work with various global/national content partners and have grouped this content into categories such as sports, entertainment, music, and so on. Ease of access, personalisation and ‘ready to print’ capabilities are therefore key benefits for consumers.
GT – With your system can consumers up-load their photos on line and collect the prints at your local store?
Yes, absolutely – for those consumers who prefer to assemble their orders at home, we enable retailers to offer a ‘Print-2-Store’ service that enables this convenient option.
GT – How does your print quality compare with home printing on quality photo paper? Does the ink in the photo prints fade when exposed to sunlight?
Allow me to quote independent expert Henry Wilhelm of Wilhelm Imaging Research, Inc., who stated that “HP Photosmart Express and Microlab photos printed with HP inks have the best overall image permanence of any consumer 4×6-inch prints in the entire 130-year history of colour photography”. This is based on a 200 plus years of display permanence rating by Wilhelm Imaging Research.
GT – How does it work for the retailer – does the retailer buy the machines outright; hire them under a contract; lease them; or does HP or a third party franchisee take an in-store concession?
HP offers a number of different business models, so it all depends on retailer preferences.
GT – If a retailer wants one of your RPS systems, how long do they have to wait? How easy are these systems to install and set up?
From order to delivery, the process typically takes between six and eight weeks. Installation and set-up is handled by HP in close collaboration with the retailer.
GT – How much training do store staff need to work this equipment, and replenish ink, paper etc?
The equipment we offer is not complex to handle – no chemicals are involved and training only takes a few hours. With HP’s dry ink technology, start-up is simple, with no complex procedures or chemistry charting and no lengthy chemistry dumping and remixing if something goes wrong. HP RPS are inkjet simple, so customers don’t have to invest in training personnel on the intricacies of managing a chemistry based mini-lab. The capacity of the supplies is much higher than other systems available on the market, which results in very low intervention rates. Paper and ink, for example, can be replenished at any time, so customers can plan replenishment for periods when demand is lower and busy daytime services won’t be disrupted. This is a major advantage, and one for which we have received very positive feedback from operators.
GT – What is the typical retail price and margin on a photo print of a given size?
Prices vary from retailer to retailer, but in general these services offer very attractive margins compared with other product lines. That said, as the print business model continues to evolve away from traditional 4×6 prints to creative products, we are also seeing less preoccupation with price.
GT – Clearly, the total cost of ownership (TCO) of the machine will vary according to the location and the usage, but how does the TCO of your machines compare with other suppliers?
Due to the very low required staff involvement and additional advantages delivered by significantly reduced power consumption, little waste and zero water/chemical usage, the TCO advantages of our solutions are obvious. There are also exciting savings to be gained via HP’s ability to reduce interruptions by fixing over 70% of all technical issues remotely via our Remote Service Management System.
GT – How ‘green’ are these machines in terms of disposal of waste materials? How ‘green’ is HP overall?
At HP, we place particular emphasis on our three key sustainability priorities: climate and energy; product reuse and recycling; and supply chain responsibility. The RPS products are designed with these three goals in mind – using less power than chemical minilabs is just one part of the equation. Reducing waste materials is another key consideration. With our solutions, there are no waste chemicals to be recovered or recycled. HP’s packaging consists of materials that are recyclable – cardboard boxes for ink cartridges, for example – and both empty ink and toner cartridges are eligible for our HP Planet Partners initiative, which offers free return and recycling services for these items.
GT – What fault-fixing service do you offer: do you offer remote machine monitoring and possible failure warnings or better still, do you send in an engineer when you detect a possible fault?
Rapid reaction times are important, hence with each installation we provide the HP Remote Service Management System that enables us to respond fix most of the issues as they occur. This system also ensures that engineers receive all the critical information up front, in case they need to be called out.
GT – What are the service intervals for your machines? What is their lifespan?
We offer a preventative maintenance service, which includes regular check-ups between one and three times each year. The lifespan of HP machines is far in excess of dye sub technology and is comparable with traditional minilabs.
GT – What international technical standards are your RPS systems made to?
As a worldwide provider of IT services, HP complies with all technical regulations that are required to import our goods in the countries where we operate. These include the necessary safety and security certificates as well as eco-labels such as Energy Star where relevant.
GT – Have you won any awards for technical excellence for your machines?
Successes have included several DIMA awards for the HP dry Minilab and dry Microlab. The Retail Publishing software has also won TIPA and DIMA awards.
GT – Probably the most important question of all: how are you going to get consumers to use this service? Will you be promoting it in stores where it exists and outside, in advertising, on-line etc?
We offer multiple levels of marketing support, extending from zone 1 (the immediate lab/service area) via zone 2 (in stores to zone 3 (out of store) and where there is a clear scale of importance for these zones, we are able to support all levels. Outstanding results across the world demonstrate that we are helping retailers achieve some great results in this respect.
GT – What are your forecasts for installations of your Retail Publishing solutions in the UK? Where do you see HP Retail Publishing Solutions going from here?
We are very motivated, based on positive feedback from both retailers and their customers. Independent market commentators are pointing to HP’s Retail Publishing solution as being a market leader and our own data supports this view in terms of the number and quality of HP customers, partners and installations and their usage figures.