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We all know about Jessops recent slide in the sharemarket and their problems over the key Christmas trading season. Here's an interesting article about it's biggest online competitor I picked up on Internet Retailing Magazine;

Camera retailer plans new site for increased growth

Thursday March 15 2007

As photographic equipment retailer Jessops warns of lower profits due to a slow down in the market for digital cameras one of its competitors online, Warehouse Express, continues to grow. Warehouse Express is forecast to reach a turnover of £100 million by 2010 and has just appointed Michael Ross (founder of figleaves.com), to the non-executive board to help it achieve that.

Chris Langley, Chief Executive of Jessops, said: "In the short term we are taking further actions to minimise costs and control working capital. In addition, we will accelerate and build on some of the initiatives we have been exploring for the continued development of the business, such as online digital printing, new consumer electronics ranges, and rolling out our ‘buy online/collect in store’ offer."

Jessops warned that the volume of sales by value for digital compact cameras in the UK was down 10.8% in January, memory cards were down 14%, camcorders down 16.8% and digital SLR camera sales were up only 14%, compared to the 30% plus monthly sales increases typically seen during 2006.

Warehouse Express has seen its turnover increase from £22.9 million in 2005 to £35.3 million in 2006 and is on course for £54 million. This growth is forecast to continue as a new site goes live and the company expands across Europe.

The e-retailer has undergone a lot of changes since being bought from its founder. In the past 18 months, a new warehouse has opened, call centre hours have been extended, the order cut-off time for next-day delivery has been set at 4pm and the employee count has nearly doubled.

Chief Executive Colin McCarthy, who joined the company 13 months ago from Screwfix Direct, said that the business had reached a transitional position. The founder knew the market and grew the business fairly quickly. The operational and customer service areas were two parts of the business which he has tried to expand and improve. They are the two areas “which can make or break a business,” he said. Since joining, he has focussed on the team, warehouse and call centre, but the web concerned him “from day one”.

Some quick fixes are currently being implemented on the site (frames and scroll bars are to disappear to help the site increase its position in the natural search results). “We are losing new customers because it’s not easy to find products,” said McCarthy.

A functional design specification has been written for a new, UK site and McCarthy anticipates being able to invite 3 or 4 companies to pitch in April. A group of 10 or 15 customers will also be invited to input in the new site.

The launch of the UK site will be followed by a multi-lingual, multi-currency site to handle the growing number of European orders – around 40 a day are currently taken through the UK site. He anticipates both sites going live in the next 12 months.

The majority of Warehouse Express customers are ‘serious hobbyists’, although some professionals do use the site. The introduction of multi-delivery options (any day of the week and timed delivery), he hopes will enable the company to offer a service which the professionals will use. “Professionals need the stuff now,” he said.

The company uses Parcelforce for overseas deliveries and Citylink for UK deliveries and its swap-out service, enabling returns to be collected and replaced at the same time. An average of 1,200 orders are despatched each day (the daily rate ranges from 900 to 1600 orders), with an average order value of £300.

On the marketing front, the company has recently upped its spend with Google from £20 - £30k (resulting in £350k turnover), to 30 - 40k for a £1.25m turnover. It also includes advice from professional photographers in its email campaigns and sends out three catalogues each year to its 150,000 customer-database.

McCarthy plans to introduce customer reviews onto the site, to run alongside the forum, start a camera club online in the summer and set up a series of roadshows. Digital prints for next day delivery, memory card express and speedy delivery of lower-end digital cameras will allow the company to “drill into where the mass market is without devaluing the brand for the serious hobbyist”.

Warehouse Express will be a company worth watching. It continues to be awarded the accolade of online retailer of the year, every year, by Practical Photography and Digital Photo magazines and ranked at 62 in the Sunday Times’ Fastrack 100 (which lists companies with the fastest growing sales over the last three years).

Emma Herrod

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Mnnn... I am always amazed to why every single mini-lab owner is not doing trade on the net? I have recently help to set up a e-commerce site for a Lab Owner, that is close to going live, and I bet in a years time, the site will have paid for its self, and will be in profit, but also generating profit that would not have been found in the brick n mortar business...

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