Chains testing 'micro' photo lab - PHOTOGO franchise program

Chains testing `micro' photo lab

SANTA MONICA, Calif. - A minilab less than half the size of the smallest previous models is bidding to rekindle drug chains' interest in one-hour photo processing.

The machine - which at 5.4 square feet can sit on a table - is sold by Print Technology in its PHOTOGO franchise program. PHOTOGO was launched this year with the aggressive goal of 5,000 retail installations by year's end.

F&M, Perry, Walgreens, Drug Emporium, Revco, Pay Less NW and Publix, the Florida supermarket chain, have all started PHOTOGO test installations recently, sources at those chains told Drug Store News.

"Their concept and theory is an excellent one, and they're target marketing it perfectly," conceded Mike Lammers, marketing manager at competitor Noritsu.

The PHOTOGO franchise program could attract retailers through its state-of-the-art technology, training and service support. It remains to be seen whether such a program can help propel one-hour processing beyond the distinctly mixed success it has had in mass merchant stores, retailers said.

New generation

of machines coming

Industry watchers don't expect PHOTOGO to be unique for long. "I think we'll see a generation of smaller, faster machines," said Ron Koch, vp-photofinishing at Eckerd, a chain which is understandably interested in developments on this front. By a wide margin among drug chains, Eckerd is the most aggressive in minilab installations, with over 200.

Noritsu will launch what it calls a "micro-lab" at the PMA show in 1992, said Lammers. Fuji and Copal are also expected to produce small entries.

Sources agree there is room for technological advances. The PHOTOGO P135 works best with 200 ASA film, and can process seven rolls an hour.

The P135 processor lab - made by the French company Alcatel - boasts patented technology that combines film developing and photo printing into one automatic process. The next smallest model today is Noritsu's, at 12.5 square feet.

The user simply drops a roll of 35mm film into the machine, and within a half-hour, 4-inch-by-6-inch prints are produced.

"When you see it work, it is kind of miraculous," said Koch, who is evaluating whether to install two or three stores to test customer acceptance.

Another advantage is the cost: $33,000 to $36,000 for the equipment and in-store support material, compared with up to $100,000 for conventional two-piece minilab hardware.

Major chains set up tests

Perry Drug Stores, which has launched a test in six stores, figures it can pay for the hardware in a year doing just 6.5 rolls a day per store, said vp-marketing David Green. He added that Perry is already committed to rolling it into more stores under the name Perry Photo Express.

"It's clear the PHOTOGO unit can be supported by a much smaller community," observed Barry Harrand, executive director of the Photo Marketing Association.

In other programs: * F&M has started a 25-store test in Chicago; * Publix is testing in 20 stores in Tallahassee and Broward County; * and Walgreens has put PHOTOGO in four California stores, and is increasing a two-store "conventional" minilab installation to five stores;

Also, Pay Less NW is testing in four California stores, Revco in five Cleveland stores, and Drug Emporium in "three to five" stores.

Print Technology chairman Howard Ruby has predicted the sale of 5,000 units worldwide this year, with Alcatel producing 2,000 a month by year's end. Jeff Rogers, vp-marketing, said that as of July there were 120 installations.

At press time, Rogers also confirmed the company has laid off a 25-person California sales force to "refocus the sales effort solely on the major chains" nationally. Four persons comprise the remaining national sales force.

"We had a very large sales organization in-house" initially concentrating on small accounts in the Los Angeles area and California. PHOTOGO had trouble obtaining financing for the small accounts, Rogers said.

Drug chains so far have praised both the quality of the processor's prints, and of PHOTOGO's training and service.

"We've been very very pleased with PHOTOGO's support, and with the outstanding quality of the prints," said Pat Braverman, director of marketing, F&M Distributors. Braverman now wants to see what the sales results will be.

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