BusinessReport.com

When business was at its peak in the late 1970s, the showroom of Southern Camera would occasionally become so crowded customers would spill out of the front door onto Government Street. For the sake of posterity, owner Terry Lowry actually shot home movies once to document the success of the family-owned business.

“That was the heyday of retail sales and equipment,” recalls Lowry, who now runs a scaled-down Southern Camera with his wife, Margaret, and their two grown children. “Canon had just introduced the (35-mm) AE-1, and it was such a hot seller that people would come in and buy three at a time.”

It’s a good thing Lowry has the movies because the memories hardly seem real, so radically changed is the market for retail photography services and equipment. Today, the 57-year-old camera shop does just a fraction of the business it did a couple of decades ago, and the Lowry family is struggling to market itself to a smaller, professional clientele in a world that has been redefined by digital photography and the Internet.

It’s not easy, but the family is hanging on. Indeed, they are using the same tools and technology that nearly put them under to promote what they have to offer, which is high-quality photo finishing for primarily—though not exclusively—professional photographers.

“There is opportunity, but this is only a five-year plan because who knows what’s going to happen,” he says.

Lowry has been in the photography business his entire life. His father, John Lowry, opened the original Southern Camera, a camera repair shop, in 1951 at Laurel and Fourth streets. Five years later, the senior Lowry expanded into retail and relocated to the growing and bustling Government Street, directly across from Baton Rouge High School.

It was a good location with a lot of foot traffic, and it was a good time to be in the industry, which was growing fast. Besides selling cameras, the shop offered photo processing services and also sold processing chemicals and equipment both as a wholesaler to regional photo labs and to retail customers. There were plenty of those avid amateurs by the late 1960s and even more in the 1970s and 1980s as high-quality cameras became affordable and converting spare bathrooms into dark rooms became trendy.

“Photography used to be a very intensive and expensive hobby, and people were passionate about it,” says Lowry, who joined the family business in the mid-1970s after his marriage. “This was their store; the place where they’d come every week to get their chemicals and their paper.”

Digital photography changed all that almost overnight, wiping away the entire market in the space of just a couple of years. For the Lowrys, 2001 was the year everything dried up. It was about that time that the price of digital cameras nosedived from the $25,000 to $30,000 range to less than $5,000, making them available to an entirely new market. They’ve continued to come down in price ever since, and within the past two years most major manufacturers have discontinued all but one or two film cameras.

With the demise of film cameras went the market for all the processing chemicals and equipment that made up a considerable volume of Southern Camera’s retail and wholesale business. It also eliminated the need for the wide-margin servicing and repair portion of the shop’s business. But Southern Camera could have opted to move into the retail of digital cameras had it not been for the simultaneous explosion of online shopping. Just about the time customers stopped buying film, they also figured out they could save 9% sales tax by purchasing new digital cameras over the Internet.

“We were doing an awful lot of showing of these digital cameras at first, and customers would come in and spend an hour or two with our sales clerks then tell us they’d forgotten their credit cards at home,” Lowry says. “We’d never see them again.”

In the past six years, the number of independent photo shops around the country has decreased by about two-thirds, from roughly 10,000 in 2002 to about 3,000 today. It’s not that such retailers and processors didn’t see the digital revolution coming; they just had no idea how fast the train was moving.

“A lot of people expected there would be a longer cooperation between film and digital than there actually was,” says Gary Pageau, publisher of the Michigan-based Photo Marketing Association magazine, a trade publication for the photographic industry. “Once consumers made the switch to digital that was it; they made the switch wholesale and never went back.”

Daughter Lacy Baccari remembers the fall that the LSU photography students stopped coming in to buy their semester’s worth of photography paper. She wondered where they had all gone.

“Finally I asked a student, and he said they were doing everything digitally and over the Internet,” Baccari says.

To cope, the family made a strategic decision to invest heavily in digital printing equipment and began marketing their services to professional photographers. The equipment produces top-quality prints that are developed, so to speak, just like film images, using a process that involves chemicals and exposure to light. The result is a richer print with much deeper tones. An amateur might not be able to tell the difference between that and what’s done on a LaserJet, but a professional can.

Virtually all of Southern Camera’s business now comes from its digital prints and the special services it offers with them—unusual or large sizes, for instances, magnets, buttons and special albums or coffee-table style wedding books.

“It really just depends on the creativity of the photographer,” Margaret Lowry says.

The Lowrys are also using the Internet now to help them market their services to professionals. They’re reading up on search-engine optimization and upgrading their Web site. They also use the web as way of sending images back and forth to their customers. As much as 75% of their business now comes from the Internet, though most of those customers live in the Baton Rouge area or at least the region.

“We do a lot of business that we UPS out the back door every day,” Margaret Lowry says.

One of the most difficult things for the Lowrys about figuring out how to survive in the digital age has been readjusting their mind-set. Their whole business model has changed. For years, they ran a conventional retail and wholesale business that made money off sales, services and equipment. Now that’s all gone.

“We had to get past the idea that you have to have the doors open all the time and have merchandise in the showroom,” Terry Lowry says. “That was hard.”

But they are adjusting. The storefront is only open Tuesday through Friday now, though they meet customers by appointment on other days. They no longer have a sales staff. They no longer stock merchandise, save for a few random items.

Another big challenge is figuring out where the market is going next. While they feel comfortable with the niche they’ve carved doing high-quality prints, they’re not sure how long it’s going to last. For now, they’re staying in the game, enjoying the challenge, in a way. But it’s not as much as fun as it used to be.

“It’s almost like a game of last man standing,” Terry Lowry says. “But by the time we were the last man standing, the audience had up and left and we just didn’t realize it.”