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How to avoid retail's mass vanishing trick


Michael Baker

Charing Cross Photo owners Daniel Caillau and Hai Yan Yang have undertaken a massive transformation of their business to survive in changing times.

Charing Cross Photo owners Daniel Caillau and Hai Yan Yang have undertaken a massive transformation of their business to survive in changing times. Photo: Supplied

It's still early days for the technology revolution transforming the retail industry, but the changes have already placed many kinds of small businesses under immense stress.

Bookstores, movie rental stores and photo shops have been notable casualties of changes in the way people 'consume' entertainment.

Have you drastically altered your business to survive? Share your story

Many of these kinds of stores have just disappeared from both suburban strips and shopping centres.

Ten years ago if you went to your nearest regional shopping centre you would, on average, have been able to choose between three photo shops. Now you are likely to see no more than one. In smaller centres you would be lucky even to get that.

While most of these kinds of retailers have been party to a mass vanishing trick, others like them are attempting something trickier still - to transform themselves into new, leaner and more differentiated businesses that are fit to prosper in the future.

These entrepreneurs can be role models for what independent retailers need to do to stay alive and thrive in sectors that are undergoing radical change.

One possible role model is trading from a retail strip barely 200 metres long in Waverley, in Sydney's eastern suburbs.

Charing Cross Photo, owned by Daniel Caillau and his partner Hai Yan Yang, is one of a string of small businesses battling it out on a block with only modest foot traffic.

Caillau and Yang are presiding over a massive and lasting transformation of the business they have been running on the strip for 16 years.

“Once you would have called us a photo shop,” laughs Caillau. “That business has gone to chains like Harvey Norman and Officeworks that let you print photos for 20 cents or even less. We've had to move our whole business concept to a place where the Harvey Normans can't touch us.”

Around the time of the Sydney Olympics, Charing Cross Photo had 12 employees and its principal business was developing snaps for the family album.

Then, around 2004, they saw a change coming. Digitisation took over and although Charing Cross still processes photos it cannot compete on price with the big retail chains who use photo printing as a loss leader.

By 2010 the shop had downsized to a lean operation consisting of themselves and a few casuals. The owners were working 80 hours a week and they still do.

But those hours are spent very differently to what they were 10 years ago.

Says Caillau: “The first thing to understand is that if you are in this or any other kind of business for the money you will not succeed. You have to have a passion for what you are doing.”

Passion is a good start but in order to turn a deeply commoditised business like photography into a differentiated one you need to find ways of adding value that the large chains cannot.

This requires a combination of creative flair, technical know-how and willingness to experiment and change.

Luckily, Caillau and Yang seem to have all three.

First, they have shifted their sights from the individual consumer to the small business customer. Interior designers, architects, photographers and other businesses have a greater need for high-quality imaging and presentation. This gives Charing Cross an opportunity to add value along the whole production chain from raw digital file to final product, which could be anything from a conventional small print to a framed enlargement to wallpaper for a living room.

Second, they have worked hard at gaining a reputation as a high-service shop.

“We've become educators and consultants,” says Yang. “Our customers rely on the expertise we share with them that they can't get anywhere else.”

Third, their knowledge of the complex machinery they work with has been put to good use. When an office machine breaks down it costs time and money to fix it, but Caillau and Yang are usually able to do the maintenance themselves.

Fourth, they make a habit of listening to their customers. Too many businesses will only do what they are in the habit of doing and what they are already set up to do. As customer needs evolve, the business is unable to evolve with them. Caillau and Yang keep their antennae aloft, believing that an unusual customer request can be turned into a larger business opportunity.

"If you want to know what your business needs to do, listen to your customers,” says Caillau.

Fifth, the couple have made a conscious decision to become a one-stop shop for image production rather than a specialist in one area. “Being a specialist isn't enough to stay in business,” says Caillau. “We support the whole process from end to end because that's what our customers want.”

Be passionate about what you're doing, evolve the customer base, elevate the service model, control costs, listen to your customers and master every aspect of your business. Not radical ideas and some of them have resonated throughout the retail industry for years. But except for cost control they are often ignored in the implementation.

As retail comes under ever greater pressure from the technology revolution, small businesses need to take more of this advice on board.

Michael Baker is principal of Baker Consulting and can be reached at and

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7 comments so far

  • Unless you sell Lattes the bricks and mortar model is now a niche retail outlet just as markets are, we've evolved from markets, through stores to a virtual retail world, why persist with an obsolete business model!?

    Date and time
    November 21, 2012, 10:48AM
    • OK, lets follow up on that Frank, what characteristics of a business, product or service type make it more or less suited to surviving in the online age?
      Cafes, lattes, are obvious survivors; there's not much fun ordering a toasted sandwich, a coffee and a slice of cake on ebay!
      Anything where the product is uniform and not time critical is in danger. If we can order a widget online for 90% of the price and have it come to us, why get in the car and go somewhere for it? So stuff like consumer products are in trouble.
      Anything where you need to touch and feel to make a decision would seem safe - unless you can touch and feel and try on and then go home and order the correct size online. Clothing is likely to be in trouble. Independent new car showrooms might be too.
      Stuff which is unique, art, op shops, and stuff which goes off quickly, like fresh food, should be safe. Used car salesman use the internet to find buyers and may no longer need an expensive main road frontage, but they're not about to give up having a yard somewhere.
      Bricks and mortar is not obsolete, it's simply no longer the only way and for many types of products and services is no longer the best way. There are opportunities out there for people who can identify the best way to sell particular products in this changing environment a year or three ahead of the market.

      Bricks and mortar not obsolete, just specialised
      Date and time
      November 21, 2012, 10:01PM
    • Selling Lattes will will soon become an obsolete business too. With the advent of coffee capsule machines putting out a coffee around 50c and now sold almost everywhere even in supermarkets a lot of consumers will opt to save the $4.00 at the coffee shop.

      Date and time
      November 22, 2012, 10:07AM
  • Under the Gillard labor Government, any small business will find it hard to survive. This government is there for all the big businesses that it cosies up to. It puts on more regulation and paperwork on all businesses, that is grossly disproportionate to small business. And as small businesses die, they are replaced by the monoliths like Coles and Woolworths who are only good for themselves and not for the general community. This once great country is going down the gurgler before our eyes.

    Date and time
    November 21, 2012, 6:05PM
    • This article hits the nail on the head. Local shops which used to provide goods and services to locals are disappearing into giant community centres like Westfield. there are fewer bakers, butchers and milk bars around than there used to be. While technology is one of the reasons, another is that goverments favor big businesses to acquire all their goods and services. And Governments like Gillard's Labor government make it harder for small businesses by significnatly increasing compliance costs in a whole range of areas. When spread over a small business these can be significant, while spread over really large businesses they are insignificant. But the public servant mandarins don't understand this, but then again they work for the labor Government, which is big business.

      Date and time
      November 21, 2012, 6:15PM
      • Could you please provide a list of bookstores that have been 'casualties of the way people consume entertainment?'

        I cannot recall any being reported. Redgroup and all associated bookstores closed as a result of a very poor business plan and structure so do not include those.

        Please enlighten me. Thanks.

        Date and time
        November 21, 2012, 9:52PM
        • Running a bricks and mortar business has become a futile exercise. The costs involved make it virtually impossible to make a wage, let alone a profit . It has little to do with business plans, customer service, modelling , it all boils down to the rising cost of doing business in this manner and the falling demand due to the increase in competition. Most small business owners are working for nothing, simply because they can't bring themselves to the change required to shut shop and get a job, most are unemployable anyway. It's catch 22, only the strong will survive, the government knows this, it's a shift in economic paradigms.
          There are no blacksmiths or chimney sweepers anymore.
          The end result will be falling commercial real estate values due to the lack of demand.
          This is not a bad thing, it's evolution, it's been happening since the dawn of time.

          Date and time
          November 25, 2012, 7:14AM

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