Trends

2009 - A year of change for imaging

AS IWRITE THIS,WE’VE JUST TIPPEDINTOTHE THIRDQUARTEROF 2009.WITHSIXMONTHSOF TRENDDATA BEHINDUS FOR THE YEAR, IT’SNORMALLY A RELATIVELY EASY JOB TOFORECASTWHAT THE FULL YEAR SALESWILL BECOME THE ENDOFDECEMBER.NOT SOTHIS YEAR. THE FIRSTHALF HASGIVENUS TWOQUARTERSOFWILDLYDIFFERINGPERFORMANCE, ANDIT’S FAIR TOSAY THE PHOTOMARKETHASNOT SEENSUCHFLUCTUATINGFORTUNES FORMANY YEARS.

We ended 2008 in negative territory – the photomarket overall recorded a poor Q4,underperforming comparable markets like Consumer Electronics and IT,both of which performed better in the run-up to Christmas.But once we passed Christmas the floodgates opened, resulting in Photo becoming the best performing sector tracked by GfK during Q1 of 2009.

Even though on a product by product

basis prices actually rose slightly in January compared to December, this didn’t stop consumers buying,and both compact and D-SLR saw a big increase on 2008.This increase will have come as a great relief to all concerned given the high inventory levels left over frompre- Christmas.Many pinned the increase in sales on consumers rushing to buy before themuch blogged about price increases fed though to retail.There’s an element of truth in this,butmore likely is the fact that a jittery consumer base was waiting as long as possible before deciding what purchases tomake at Christmas.Given that the same trend was repeated in big- ticket items like LCDTV, this would seemto be themain reason for the sales rush. In truth,although prices did indeed rise on certain products over subsequentmonths, the highest selling 2008 range products really didn’t shift a great deal in price.Only

with the introduction of 2009 ranges was the real step change in pricing seen.Prior to the new ranges, if anything themain reason for the overall increase inASP was due to consumers buying into the higher priced compacts in far higher numbers than ever before.Enthusiast compacts and superzoomcompacts at or above the £250 price point were some of the surprise winners of early 2009,and really helped to drive the compact sector high- end to substantial growth on last year. During Q1, twice asmany compactmodels were sold at £300 or above than during Q1 2008. Moving into Q3, the pressures evident

in other electronicsmarkets started to bite in the photo sector,with both compact and D-SLR salesmoving into negative territory inApril andMay.The bottomend of compact (sub £100) remained stable, and the aforementioned top end sales kept growing too.What’s been suffering is everything in-between - a classic recessionary situation where the low and high end remain stable at the expense of mid-range sales,particularly those between £100 and £200. Looking forward,we have revised our 2009 forecast for volumes downward,and despite the lack ofmajor price increases at the low end,we have increased our price expectation – in themain due to the unexpected popularity of the top-end

compactmarket.Within D-SLR, the 2009 range that started to emerge in recent months has shown a clearmove upmarket,with the £300 or below sector looking quite sparse for comingmonths – a clear shift fromthe strategy that provided somuch growth in this sector for the second half of 2009.As a result,our forecast for D-SLR volumes has been cut to only single digit growth for 2009 (an extra 25,000 units or so),but expectations of price are for broad stability or a small increase on 2008.Whether or not entry- levelmodels will remain at their forecast launch prices right up to Christmas remains to be seen however.Regardless of the expectation of a slowdown for D-SLR, our forecast for lenses remains bullish,and the ratio of lenses to bodies sold is continuing to climb in recentmonths – clear evidence that the installed base of D-SLR is becoming themain driving force rather than new body sales. So, imaging is set for its worst year for some time in terms ofmarket

development in units and value.But there are some bright spots – themaintained growth rates in lenses and strong performance of top-end compact indicates the keen DSC buyer is now maturing,and will stay loyal even whilst the mid-range occasional consumer tightens their belt.

Matt Gibbs

Account Director Photo 0870 6038209

E:matt.gibbs@gfk.com www.gfkrt.com/uk

“Onlywith the introduction of

2009 rangeswas the real step change in pricing seen.”

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