The Photo Create Story
A pioneering family in film processing in Australia is now behind a bold venture
to become one of the world’s largest facilities for online photo gift fulfilment.
Paul Burrows travelled to Glen Innes to visit the expanding Photo Create operation.
Glen Innes, in north-eastern NSW, is a long way from anywhere by road – seven hours from Sydney and four from Brisbane while it’s at least two hours to most other major regional centres. But it’s not a long way from anywhere in the online world so it’s as good a place as any for Photo Create to site its extensive manufacturing facilities. Yet Photo Create is in Glen Innes for historical reasons as much as anything else and it’s quite a remarkable history which helps explain why such a major operation – servicing the whole of Australia – is located in the most local of locales.
But before the past, the present. Photo Create was established in 2007 to meet the growing demand for printing online photo orders which were being generated from a variety of sources such as ordering kiosks in retail outlets or at home via the Web. Currently, for example, Photo Create is handling all the ‘fulfilment’ for Big W and Harvey Norman stores and for HP’s Snapfish online photo sharing community plus a large number of kiosks located in photo stores around Australia, some owned by its parent company, the Eastmon Group. It’s the Eastmon Group that has been based in Glen Innes since the early 1960s.
From B&W To Colour
In 1961 company co-founder Howard Eastwood – who was a radiographer at the local hospital – purchased a small but thriving B&W film processing business which was servicing the town plus nearby centres such as Tenterfield, Inverell and Guyra. Howard’s partner in this venture was his cousin, Robert Lemon, and the pair combined parts of their surnames to create the business name Eastmon Photo Laboratories.
To ensure a continuous supply
of consumables Photo Create even
manufactures its own frames for photo
canvasses. This stockpile may look
like a lot, but such are the production
volumes it won’t last long.
Then, in 1970, along came colour negative film and Howard could immediately see that this was going to impact on his B&W business unless, of course, he got into colour processing. He wrote to Kodak in the USA who sent him a diagram of its new colour negative processor… a massive machine which, to Howard, looked unnecessarily complicated. He decided he could build his own colour processor and, after studying the procedure, did just that using components he bought from the local hardware store. This first machine was a bit rough and ready, but it worked so Howard promptly then built a proper one that would take the demands of commercial operation. It was, as far as anybody can work out, the first colour negative film processor to be designed and built outside Kodak anywhere in the world.
Colour film was very quickly embraced by the market and the business thrived, forcing Howard to give up radiography in 1973 and concentrate entirely on wholesale film processing. He subsequently built his own paper processors and cutters as he worked towards a more automated production facility that would be able to handle higher volumes. In 1976 Eastmon took delivery of the first high-speed Kodak film processor to be installed outside a major city, enabling the company to offer an overnight turnaround when most people around Australia had to wait ten days. Business boomed and there were numerous logistical challenges as a result, including the storage of huge quantities of paper and chemicals, accurate chemistry mixing in bulk (which required specialised equipment) and servicing the many outlying agents (so a dedicated courier company was established).
Pioneering The Minilab
The photo gift market is expected to
expand significantly over the next few
years and Photo Create sees potential
for professional photographers to use
these products either for marketing and
promotional purposes or for on-selling.
Then Howard had the bright idea of building a more compact combined processor-and-printer that could sit in the window of a photo store and deliver finished prints right in front of watching customers. Howard and his brother, Richard, completed this machine in 1977 and it was duly installed in Eastmon’s Tamworth store – effectively the world’s first minilab. It offered a three-hour turnaround and soon Richard was building minilabs for the company’s other stores in the region.
Continued expansion meant that Eastmon was the second largest consumer of Kodak materials in Australia after Kodak itself. Not surprisingly, Kodak was keen for Eastmon to repeat its success story in other parts of NSW and encouraged the company to set up in Albury to service the southern part of the state and northern Victoria. While he was at it, Howard added stores in Bathurst and Dubbo for good measure, all using processing equipment that the company built itself.
By 1983 Eastmon Photo Laboratories was operating 13 stores across rural NSW, but everybody was jumping on the minilab bandwagon so the processing business was becoming highly competitive. This led to Eastmon joining the Camera House group so its stores could also sell camera equipment and accessories. From here Eastmon moved into managing the photo operations for non-specialist stores such as pharmacies, but by the mid-1990s the arrival of the microlab had badly eaten into the profitability of this business.
A Systematic Approach
Changes in technology had always been embraced by Eastmon – and cleverly adapted to meet local demands – but it was becoming increasingly apparent by the mid-1990s that the future in both photography and retailing was going to look very different indeed. The business had, to some extent, survived on volume which, it was already clear, couldn’t be sustained so now there was a need to establish systems that would bring efficiency - and with it improved profitability – to the group.
You name it, Photo Create can probably
put a photo on it... even dog bowls!
This is where Hugh Eastwood, Howard’s son, became involved. An industrial designer by profession, he had read Michael Gerber’s book The E Myth Revisited and was convinced that running a business like Eastmon could only be done successfully through the systemisation and documentation of every facet so there were no ‘unknowns’… least of all unknowns that were costing money. Hugh was allowed to trial his ideas at the Dubbo store and quickly turned a loss-making business into a profitable one. It was enough to give him the green light to look at the group’s operations as a whole, including the support systems behind the retail outlets which resulted in the creation of networks to manage stock, sales figures and staffing. Such was the resulting success that, in the early 2000s, both Kodak and Fujifilm came knocking and wanted Eastmon Group, one way or another, to take over the running of their retail outlet chains. Hugh decided to take on Fujifilm’s Rabbit Photo stores as he was allowed to do this from Glen Innes and, at the height of this operation, 100 stores all around Australia were run from the company’s business centre in a converted mill in the centre of town.
Going Online
Photo Create has a facility dedicated
to manufacturing photo canvasses.
By now, Eastmon was also exploring the potential of digital print-ordering kiosks to revive its photo processing business, but not just having one unit standing largely unnoticed in a store, but a bank of three or four which would attract more attention and, potentially, more orders. The old pioneering ideas of Howard Eastwood lived on even if he decided to retire from the business in 2001 (although he still takes a keen interest in its operations).
Hugh Eastwood wanted his own Eastmon-branded stores – of which eight remained – to have distinct product lines to what was on offer through the managed Rabbit Photo outlets so, in 2006, Photo Create was established primarily to make the photo books and gift products which were ordered via the kiosks. An HP Indigo press was installed for printing the photo books, but once again Eastmon’s relationship with a supplier was destined to go much further. HP was looking for a facility to provide the fulfilment for its recently-acquired Snapfish business and, impressed with the Eastmon ways of doing things, offered Hugh the contract. With vast experience in wholesale film processing, Rob Tolmie [now managing director of Photo Create] had been assisting Eastmon with its transition into the digital era… and his advice would be critical.
Some of the crowds that turned up to tour the new
Photo Create facilities when they opened recently.
The company is the biggest employer in the town.
“Our retail model had always been ‘volume is vanity, profit is sanity’,” Hugh explains, “because, in retail, that’s what we did – we tried to have higher margins and less volume. In other words, we saw ourselves as a premium-type product. But Rob said, ‘That might be fine in retail, but in the wholesale environment volume equals market share equals possible profit… and you can’t have the third one without the first one’.
“We decided then that we’d not only open up Photo Create to Snapfish, but to the whole market because, if we didn’t, they would do it anyway and create a competitor. So we then ran as hard as possible and got as many people on board as possible because it’s a volume-driven business… and we also realised very quickly that it’s a very capital intensive business too.”
Expansion
Photo Create now occupies a number of what Hugh Eastwood lightly calls “sheds” in Glen Innes, but which are essentially purpose-built factory units housing the various different elements of production – ‘straight’ online photo orders (which includes everything from playing cards to posters), photo books, canvases and gift products plus, of course, warehousing all the consumables.
Initially established to service the online photo ordering
requirements of Eastmon Group’s own retail stores, Photo Create
has rapidly expanded to meet the fulfilment requirements of
larger chains such as Big W and Harvey Norman.
The latest Photo Create catalogue lists over 500 gift products, encompassing everything from keyrings to teddy bears, footballs to drinks coasters. Given the number of additional variations possible in photo book designs and formats, canvas sizes and the like, there’s probably over a thousand possible variations in end product. Remember too, that there are hundreds of order points around the country. Not surprisingly then, networks and systems – and very complex ones at that – are what keep this business operating at the levels of efficiency needed for profitability and to ensure customers get exactly what they ordered. Of necessity, the Eastmon Group includes its own IT company.
Just as was case when it ramped up its wholesale film processing business, there have been numerous logistical challenges to overcome, not the least being the levels of stock that need to be held. For example, just how many blank soccer balls are you likely to want from month to month… or stubbie holders… or beer steins? The Eastmon approach is to be in control of as much as is possible so, for example, one ‘shed’ is dedicated entirely to making the wooden frames for the canvas orders so Photo Create isn’t dependent on an outside supplier.
Delivering on the promise is the key to this business and Photo Create works to a strict two-day maximum turnaround of orders. The rest is up to Australian Post who despatches a special truck to Glen Innes twice a day from the main regional mail centre at Tamworth.
In the run up to Christmas, Photo Create will employ up to 400 casual workers to meet the extra demand (and operate seven days a week), but in terms of its full-time staff the company is already the region’s biggest commercial-sector employer.
As the Christmas period demand escalates
Photo Create will employ up to 400 extra
casual workers.
Just like colour print film in the early 1970s, this is a business with potential for huge growth over the coming decade which is why Eastmon Group has just completed a major expansion of Photo Create, turning it into one of the biggest operations of its type in the world. By the time the rush for Christmas begins this year, Photo Create will have the capacity of 14 HP Indigo presses (compared to just three last year) to meet the expected increase in demand for photo books. Much of this demand will, of course, be driven by promotions mounted at the points of sale.
However, the seasonal aspect of both the online photo printing and photo gift businesses – where demand peaks massively at Christmas with smaller ‘spikes’ around Mother’s Day and Father’s Day – means there’s the potential for plenty of excess capacity during the rest of the year. This has lead Photo Create to explore a range of other markets, including the professional photography sector, to keep its printers busy.
“We’re deliberately positioning ourselves at the affordable end of the photo book market for professionals,” says Hugh Eastwood. “We don’t intend to compete with the pro labs in this area. We’re not a pro lab. What we’re offering is a fast turnaround and lower prices so photographers can use these products for a range of purposes… either as promotional items because they can afford to give them away to clients or as saleable items. We think that when photographers see what’s available in our gift range and in our printed products such as cards and stationary, they’ll see the potential for adding new areas to their businesses. And because we’re doing such high volumes, we’re always going to able to do these things for a much lower cost than they could ever do themselves.”
Hugh says it’s rare to see an order for one photo book and Photo Create’s customers are already typically ordering multiples to give away to family and friends.
“It’s not uncommon to get orders for ten or 20 of the smaller format soft cover books and these are great value so I can see professional photographers using these for a variety of purposes, but what we’re offering in general is a huge choice of very affordable ways for them to market their work, either to add value for existing clients or to help them get into new areas.
“We think the pros will find their own uses for these things, they just need to understand what’s available.”
