The online photo album market - UK

1.2 The global market's rapid growth

The graph below shows the global market size for photo printing and provides a forecast for the foreseeable future. In ****, the market was worth US$**.** billion and it was expected to grow at a CAGR of *.*% until **** when it would reach US$**.** billion.

The global photo printing market World, ****-****, USD billion Source: ****

The dynamics of the online photo albums market is largely due to the possibility for customers to create their own layout and design on the internet. The freedom and flexibility offered by these design-associated products are expected to stimulate market growth, due to high levels of customization. Indeed, they offer a large variety of features such as the possibility to have multiple images on a page, larger photographs, pages designed graphically using a computer, and added design elements such as text or monograms.

The largest market share was estimated to be North America given the rising trend of content sharing across social media platforms, which indirectly affects the growth of the photo printing market in this region. Indeed, social media poses a threat to the online photo album market. For example, the omnipresence of Instagram for online photos with over a hundred million photos posted every day in ...

1.3 The domestic market signals strength

The UK online photo album sector is very fragmented and includes a large number of companies, some of which are active in the creation of customisable media where one can print pictures (***). Even though the market is growing, it is difficult to have an overview of the companies in this sector, thus turning exposure into a major issue in this sector.

The online photo album market is closely linked to the photo printing market. In fact, the pictures and photos segment experienced the most dramatic increase in the overall printing market. It was worth around £**.*** million in ****, reaching £**.*** million in ****. Within this market, the online segment is forecasted to rise the most. Moreover, digital printing is facilitating the production of photo output products on many substrates besides paper, which is pushing the market value forward. In fact, the fastest growing products are the personalized which are printed on non-paper substrates. In this context, players have been diversifying their offer, going beyond photo albums to all kinds of derivative products as we will detail further on. [***]

More often, the Britons are wishing to share their memories with friends and family spread around the country and the world. In this context, e-albums hold ...

2.1 Demand overview and determining factors

A market dependant on smartphones

Every year smartphones gain in prominence and usage rates. They are equipped with cutting edge technology, notably phone cameras capable of taking high definition pictures ensuring that consumers don't need to buy a camera to obtain a good standard of imagery. Throughout the last decade, smartphones have supplanted "classic" mobile phones in the UK.

Competition between smartphone manufacturers has made this technological product more accessible to the general public, gradually making the mobile phone obsolete. Figures speak for themselves: the proportion of British people owning a smartphone rose from **% to **% between **** and ****. [***]

Nevertheless, it is essential that people not only own a phone, but that they use its features, including taking pictures. According to a study from the UK's communications regulator, also known as The Office of Communications, the penetration rate for smartphones in the UK increased from around **% in the first quarter of **** to **% in the first half of **** (***).

Smartphones penetration rate UK, ****-****, in % Source: ****

The figure only is even higher within certain age groups such as young adults and teenagers: **% of people between ** and ** years in the UK stated in **** that they use a smartphone. Nevertheless, that number does drop down to **% for ...

2.2 Cyclicality in industry revenue

The graph below represents the proportion of searches for a given term at a given region for a certain period of time, compared to when it was the most searched (***). Thus, a value of ** means that the keyword has been used less often in the region concerned, and a value of * means that there is insufficient data for this keyword.

Search interest for album photo UK, past * years, in % Source: ****

Over the past * years in the UK, the search for the keywords album photo has been highly cyclical; indeed, interest peaks around December, which we can relate to the celebration of Christmas and New Year holidays. This is consistent with the demand for photo albums as gifts for the festive season. Players in this industry must factor this aspect of revenue cyclicality in when looking at sales patterns and marketing strategies.

2.3 COVID-19's impact on the industry

The measures of social distancing and lockdowns imposed in the UK and other countries have also impacted the photo printing market. Since consumers have faced constraints on movement, they have failed to leave their house in order to print their photos, and instead relied solely on e-commerce. This extraordinary shift from physical sales to e-commerce as a consequence of the social distances measures is a factor to be highlighted. In sum, the critical situation is expected to incentivize customers to migrate from ordinary photo printing services to the online equivalent. It has been clear that some players are struggling to handle the reduction of demand on physical stores, which might not only push investments on warehouses and inventory storage, but also on better online platforms and innovative logistical delivery processes. [***]

To boil it down, it is plausible to assume that the industry have potential to benefit from the consequences of the pandemic, especially for players positioned in the online segment.

3.1 Organization and dynamics of the market

Disruption on the distribution of photo printing

In the overall photo printing market, there are several established channels, such as kiosks and the OTC (***) stores in order to print your photos.

However, the channel with highest potential going forward is online (***). The websites providing photo printing services are increasingly involved in entirely customizing the articles, and websites have the benefit of offering an illustrated representation of the final product. This has created interest among the target audience as they get to know the illustration of the end product and can further modify according to their preferences. Thus, a booming e-commerce sector is massively propelling the market for photo printing worldwide. The online distribution channel includes the sales of photo products or printing using company websites or mobile applications via an online medium. Estimates state that this segment will account for around **% market value share by the end of ****. A few companies spearheading the online photo printing and merchandise sector includes Snapfish, Cimpress N.V., Bay Photo Inc., and Shutterfly, Inc. [***] Finally, as we stated in the previous seciton, this distribution channel has also benefitted from COVID-**, further channeling its' growth.

Competition relies on differentiation

For a few years now, many mobile ...

3.2 The first mile

The first mile includes all the stages from the reception of the order on an online website (***). First mile management for online sales players is becoming a major growth lever for small and medium-sized businesses that do not yet have the logistics resources or shipping volumes necessary to benefit from solutions and advantageous rates. This segment is relevant since photos can be ordered and sent this way.

PostNord, the number one logistics company in Sweden, states: "The first mile is a key determinant of customer satisfaction since it results in a positive or negative experience. The only physical point of contact between an e-merchant and his customers is delivery; the first mile is proving to be the major challenge for SMEs-VSEs in e-commerce. As of ****, it was found that **% of the respondents deemed it is very important to be able to choose where the products would be delivered, whereas **% claimed about the importance of the delivery price and **% about the how fast the process is." [***]

The table below shows the professional rates applied by the UK Post Office offers for parcel collections, across measures and weights. For parcel’s over the size or weight of a medium parcel, it will be ...

4.1 A diversified offer

The overall photo printing market is segmented into Prints, Wall Art, Cards, Photo Gifts, Photo Books, Calendars, among others. Moreover, throughout the years, many players have been positioning themselves in the segment of photo albums that are customisable and ordered online. Nowadays, there are hundreds of options for these services which makes the choice difficult and hard to find a photo book that matches one's expectations. However, the occasion for which the album is ordered can differentiate the final product: some of them are more suitable for a wedding, the birth of a baby, Valentine's Day, Mother's Day, and other holidays.

In addition, there is an increasing number of apps offering innovative printing ideas and designs. This is the case for example with Cheerz, PhotoBox and Printic. The players are focusing on new product innovations and developments by integrating advanced technologies and features in their products. For instance, Prynt offers customers a smartphone extension that prints photos in real time, just like a Polaroid (***). Shutterfly offers the largest selection of photo gifts, with flowerpots, blankets, cell phone cases, pillows, shower curtains, and even food bowls for your pets. Moreover, some players focus on convenience and competitive prices. For instance, Cheerz shipping ...

4.2 Price Analysis

Some services such as Amazon Prints and Snapfish produce *-by-*-inch prints for just £*.* a piece. Local pickup options tend to cost more given the convenience they bring. When consumers demand a better image and paper quality, customers should expect a *-by-* price to rise up to something around £*.* apiece. Many online printing services offer lower prices on bulk orders meaning that if the client orders more than a certain amount, the cost per print may be reduced. It is also common for players to offer introductory deals and discount codes regularly. 

Covers: soft, hard, canvas, leather, glass…

The most standard photo book is the softcover photo book. It is the least expensive photo book on the market because it is the most simple and cheap to design. For the slightly more upscale books, there is a hardcover book. This book is a little more expensive because of the additional materials required. Finally, there are also offers for more original and sophisticated covers such as canvas, leather, glass or other high-quality materials.

Making your own book (***)

Almost all of the services can print books featuring customers’ photos. Clients are normally able to assemble their album as they wish, personalizing every page ...

5.1 Regulatory framework for online photo printing

The British law governing the conduct of online business is defined in a number of different regulatory texts. Some of them are specific to online business, while others apply to all commercial activities. The main regulations are as follows:

Consumer Rights Act ****: implements the EU's Directive ****/**/EU into UK law, consolidating the existing consumer protection law legislation, providing consumers a number of new rights and remedies. The Data Protection Act ****: updates the Data Protection Act from **** in the UK, complementing the European Union's General Data Protection Regulation (***) which governs how a firm must deal with personal data of clients, including the provision of mandatory information online, the obligations and liability of content and hosting providers, aiming to increase confidence in the digital economy. E-commerce Regulations ****: implements the EU's Electronic Commerce Directive **** into UK law. The Directive was introduced to clarify and harmonise the rules of online business throughout Europe with the aim of boosting consumer confidence. It governs the way online businesses communicate with any potential customer accessing their website. Privacy and Electronic Communications Regulations ****: It governs customer's specific consent regarding the use of cookies on the user's machine. Consumer Contracts Regulations ****: implements most provisions of the EU’s Directive ****/**/EU, ...

6.1 Segmentation

• Snapfish
• Bonusprint
• Cewe
• Photobox
• Photomaton
• Pixum