Trends 2010 - Imaging sales remain strong
A YEAR AGOWHENWRITING INTHIS PUBLICATION, IMENTIONED THAT FORECASTING SALES INTHE CURRENT CLIMATEWAS INCREDIBLY TRICKY.NOTONLYWEREWE INTHEMIDSTOF A RECESSION,WE WERE ALSOSEEING UNPRECEDENTED (AT LEAST INRECENTMEMORY) CHANGES TOTHE PRICING STRUCTUREOF THEMARKETPLACE.
Volumes in the first half of 2009were
not great,but the tendency to trade upwards to higher-spec or performing models,and the inherent rise inASPs meant that value performancewas actually rather positive.None of this forms a comment on the profitsmade at any stage of the supply chain,butwhat’s obvious is that despite the tough consumer climate,people spentMORE on photo products in 2009 than they did in 2008. This fact remains now,with sales in our
basket of key imaging products coming in at £1.54bn for the year to June 2010, representing growth of about1%.Some productswithin this basket of course performed better than others,but the good news is that the core product sold bymost photographic specialistswas at the upper end of the growth spectrum. Consumer confidence has of course been
low,and to produce any sort of growth (as indeed digital cameras did in 2009,up by 2.4%) during a recessionary period is something of an achievement.This growth has been driven by the top end of the marketplace -£500 plus for changeable lens and £200 plus for the fixed lens sector.
Anybodywith experience of both the
recent and 1990/1991 recessionswould agree that the economic fundamentals are very different.Currently unemployment is low in relative terms,and interest rates are at a record lowof0.5%compared to14%in 1991.Clearly the drop in economic output has impacted bonuses,pay reviews and such like,but balancing that is the fact that the largest single itemof expenditure for mostUK households is housing,and these costs have dropped.So confidence is low, willingness to spend is low,but disposable income for the average household has up until nowincreased.This is backed up by evidence fromtheGfKNOP consumer confidence index showing that 44%of households are currently able to“save a little or a lot”,compared to only 15%that state they are“drawing on savings or running into debt”.So despite the general lowconfidence resulting in a downturn in spending, it seems consumers have beenwilling to spend on aspirational,enthusiast products – inmany ways people have beenwilling to treat themselveswith their available spend. When looking forwards though, the
indicators are far less positive.Following the election, there has been amarked increase
“Traditional SLR cameras have maintained nine periods of consistent value growth now, with newmodels continuing to push the higher pricebands.”
DuringQ22010 one-third of the sales for fixed lens occurred above the£200price point,andfor changeablelens thesharesold above£500was71%-upfrom55%ayear ago.Sopeoplehavebeentradingup–and this inaperiodwhenapparentlypeoplewere tighteningtheirbelts.This trendof trading up seems to haveoccurredinanumberof productcategorieswithinimagingand elsewhere,butwhat’sthereasonbehindit?
08 Pixel Imaging Guide
in the percentage of households believing their financial positionwillworsen over the next12months.The prospect of rising interest rates and taxes is clearly themain factor behind this,andwith consumer confidence stillweak, is this likely to result in a further drop in spending intentions?One can only hope this prophecy is not fulfilled, since particularlywithin the imaging sector,a number of product trends point towards
continuing growth potential. CompactSystemCameras have emerged
in the past year as a significant newsegment withinDSC.As of June 2010,CSCs had a 13%share of changeable lens cameras, and represented a little over 1in every100 cameras sold.This share is a little under double that of a year ago,and shows how quickly these cameras are establishing a niche in themarket – particularlywithin the £400-£500body segment,which over the past18months had previously seen a decline in importance. In fact,duringQ2 2010, this segment has provided incremental growth to the overall changeable lens sector.Notwithstanding the growth of CSCs, it’s still important to recognise that traditional SLRcameras havemaintained nine periods of consistent value growth now, with newmodels continuing to push the higher pricebands. Outside of the cameras sector,a number
of accessories are beginning to showsome positivemovement.Tripods,which formuch of the last two years has recorded a volume decline has nowmoved back into growth. Volume sales for the year to June 2010 are down by4%to just under400,000 units,yet in June,volumes rose by10%on June 2009.Valuewas up by a substantial18%, perhaps indicating a resurgence in this sector following the strong consumer spend on changeable lens bodies over the past18 months.Aswell as tripods, lenses have returned to an upward curve,with sales in
June up by7%on last year.One factor it’s worthwatching is the trend for a number of the newerCSCs to be sold as a twin lens kit including both a zoomand pancake lens. So the imaging sector as awhole
remained relatively strong through 2009in contrast to consumer electronics, IT and the like,and despite the negative consumer outlook there is no shortage of product development tomaintain consumer interest in the sector through2010.
MattGibbs
AccountDirector Photo MattGibbs
AccountDirector Photo 0870 6038209
E:
matt.gibbs@
gfk.com www.gfkrt.com/uk
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