Working away quietly in the northwest corner of the continental United States for the past 10 years, Retail Imaging Management Group, Portland, Ore., has flown under the radar until now. It was born out of the frustrations of a former Eastman Kodak Co. employee and has become a $16 million photofinishing service solution provider that still retains a small, tight management structure “zealously focused on in-store photo imaging.”
The story begins with Brad Eamon, who had some ideas he thought would help his employer of 19 years, Eastman Kodak, but which flew against the company business model for its photofinishing business. Eamon says he was “farmed out” to Portland and was responsible for the Kodak grocery store business.
The biggest Kodak account in that area was the Fred Meyer grocery chain. That company demanded changes in the way Kodak managed its photofinishing business. Fred Meyer owned its labs; Eamon suggested to Kodak it needed to change its approach if it wanted to keep the Fred Meyer account. The Kodak approach was successful, so it really wasn’t interested in entertaining Eamon’s suggestions, he explains.
So he resigned.
Then he went back to Fred Meyer and explained he could develop a business plan that would provide the company with an alternative, which would save Fred Meyer money.
To shorten the story by about a year, Fred Meyer accepted Eamon’s proposal. He would put together a team of dedicated people who would support only Fred Meyer stores and who would support every piece of equipment in those stores – regardless of who made them. On top of that, Eamon would untether Fred Meyer from any single manufacturer.
The key, explains Eamon, is his operation was that of a platform-independent solutions provider.
The Kodak program had allowed Fred Meyer to confidently enter the photofinishing business but locked it into Kodak-only solutions.
“So we unlocked it,” he says.
Eamon created Retail Imaging Management Group (RIMG), built a team of 12, and signed a contract to support Fred Meyer. This, says Eamon, allowed Fred Meyer to go with Fujifilm equipment.
To start with, Fred Meyer was the only business for RIMG, supported by Eamon, a partner, 11 technicians, and a manager, plus, as Eamon describes it, “a jury-rigged small call center.” And they handled 130 Fred Meyer stores.
Along the way, The Kroger Co., headquartered in Cincinnati, Ohio, bought Fred Meyer. Kroger is one of the largest grocery retailers in the country – fiscal 2009 sales were $76.7 billion. King Soopers, another Kroger company, knocked on the RIMG door, and RIMG took on this business, with another dedicated team.
Costco Wholesale Corp. now entered the picture, except RIMG didn’t get the business. RIMG pitched to Costco, but that company wanted to stick with Fujifilm. The Costco folks asked Eamon, however, if he would be interested in buying its used Fujifilm labs as it retired them.
Eamon was nonplussed. Here he was, asking Costco for its business, and Costco turns around and asks him to buy its old labs.
Costco explained it was retiring its analog equipment and getting pennies on the dollar for them. Fifty labs were going to be retired that year, with about 300 still in its fleet. If the company needed to replace a part in one of the 300, it would have to buy the part from Fujifilm. If RIMG were to buy the retiring labs and refurbish the equipment, Costco would buy back the parts and component assemblies as needed, instead of getting ex-pensive new parts.
RIMG decided to give it a try – and lost money on the deal. It opened the door to Costco, however, says Eamon, because Cost-co was impressed with what RIMG was doing.
Costco noted the card readers for its kiosks were really expensive – could RIMG find an-other source?
“We hustled, and they started buying card readers from us,” says Eamon.
Six months later, Costco called and said a kiosk is really just a computer with a touch screen – would RIMG see if it could assemble one cheaper? RIMG did.
Today, notes Eamon, the 1,500 or so kiosks at Costco “are all ours.” For the past five years, Costco has bought exclusively from RIMG. The 700-plus kiosks in Kroger stores are “all ours,” says Eamon.
RIMG has moved from being just a service organization to a solutions provider, Eamon notes.
Changes in the industry “created opportunities for nimble organizations. Instead of seeing nothing but a decline, we approach everything optimistically.” This allows RIMG to “exploit more and more niches.”
That includes becoming a call-center company. RIMG handles all the call-center work for Rite Aid locations nationwide.
Then the company added bench repair; eve-ryone was complaining it was too expensive to fix printers, so RIMG took that on, regard-less of manufacturer.
PNI Digital Media Inc. hired RIMG to handle the consumer support for their ac-counts – Costco, Wal-Mart Canada, Costco Australia, and Costco UK – creating a “tier 1” call center, with “tier 2” and “tier 3” cen-ters supporting everything from Kodak and Fujifilm dry systems to Sony and Mitsubishi products.
In fact, adds Eamon, RIMG is the official call center for Mitsubishi kiosks and printers.
“We’re kind of morphing into a solutions provider primarily for retail. That’s our mod-el.
“The only manufacturers we do business with directly are Mitsubishi and, from a soft-ware perspective, PNI.”
Eamon says RIMG is “still small and nimble – customer focused. We understand there’s only one reason why retailers hire us, and that’s because we’re faster, better, and cheap-er. And that’s the only reason.”
With about $16 million in sales and 150 em-ployees, you’ve got to wonder how Eamon can call the company “small.”
He says the key is the management team. There are just four people, and the decision-making process is limited to four or five people. “We can decide in a day to do some-thing.”
He does note the company expansion was not planned.
“A couple of years ago, we felt we probably were not going to take on any more field ser-vice customers.” With minilabs being replaced by dry systems, “we felt we were very solid with who we have and probably not going to get any more.”
But the agnostic support, with dedicated teams, has become of more interest than ever, he explains.
Then along came Sam’s Club. “Sam’s Club didn’t know we existed. PNI was trying to sell Sam’s Club software for kiosks, but if PNI puts its software on someone else’s kiosk, the manufacturer won’t support that kiosk any longer.”
Who’s going to provide telephone support? Who’s going to fix it? These were questions Sam’s Club wanted answered.
“PNI says, ‘Not to worry, we have Retail Imaging.’ And PNI brought Sam’s to meet us.”
Could RIMG do this? It’s 550 clubs …
Eamon says they thought about it, realized it was a nationwide deal and RIMG was more of a regional player, but said “yes.” Sam’s Club has decided to give RIMG a test, a 33-store test – 20 in Chicago and 13 in southern California – liking the dedicated team approach and lower cost option. If RIMG does well, the door is open for more.
If RIMG passes the test, says Eamon, Sam’s will add another 100 clubs.
RIMG doesn’t just pick off other companies’ technicians when it takes over an account, Eamon explains. When technicians are hired, they are brought in for 90 to 120 days of training, “teaching them our way.” This includes putting them into Fred Meyer and King Soopers stores under the supervision of experienced techs.
He goes on to note, with the evolution of the minilab, the business has become more computer-based rather than mechanical. As a result, RIMG is recruiting people with strong computer-based skills “and teaching them silver halide.”
Yes, he admits, when they landed the Fred Meyer business, they “scrambled to get techs wherever we could,” hiring them away from other companies. “We don’t do that anymore.”
Both Fred Meyer and King Soopers stores are “100-percent wet labs, and only because of us.” Eamon says RIMG buys up used ma-chines, refurbishes them, and puts them in to the stores at a lower cost than a new dry sys-tem.
“For the foreseeable future, they will remain ‘wet,’” says Eamon, who figures silver halide is going to “stick around for a long time.” Costco, which deals directly with Noritsu and Fujifilm “is committed to silver halide.
“These core customers are staying with ‘wet.’”
Eamon admits the company wasn’t sure it could profitably build a dedicated service team to support a dry lab environment.
“It has been a challenge. We have had to evolve our team, but we now have a model that works very well.”
As a result, “we see tremendous opportunity in this shift from wet to dry.”
The RIMG principal says the company is competing with service organizations “heavy with wet lab folks at salary levels that cannot sustain itself in a dry lab environment. We’ve had to evolve some of our own teams.”
For Eamon, not having a national infra-structure is nothing but good news. “We have a tremendous competitive advantage from that perspective. We can change as the indus-try changes.”
He says the value of the company to a retail-er “is our autonomy and our independence. The second we align ourselves with a manufacturer, we have inhibited ourselves.”
RIMG isn’t the answer for every retailer, Eamon admits. A retailer with one to two stores isn’t going to find RIMG a workable solution, and probably having 10 to 12 stores isn’t going to justify a single dedicated tech.
RIMG “is not a universal solution,” says Eamon.