Friday, December 5, 2008

Feedback from the Optical Market

Since my last post the global economic situation has got decidedly worse.

More than one bank have the government as a major shareholder, Woolworths have gone under and in the US the major car producers are going to the Fed with cap in hand.

As for the optical market feedback is varied. At least one independent practice on our books is in administration (seemed that something was up as they changed their name twice in as many years) and it seems that supplier credit is tightening (after all, say suppliers, we're not banks). Others report that they have not seen much affect - perhaps a higher incidence of re-glazes, a decrease in footfall or reduction in average order value.

There seem to be 3 avenues practices are using to maintain product through-sales during this time:

1. Niche products

Speaking with a number of leading independents these times have forced them to consider specialisms - Low Vision Aids and Sports Vision for example. But it's not that they simply fill their practices with yet more stock just to make their accountants wince, but there is a wider benefit to the practice than simply margin.

I mentioned in my last post that most businesses build by selling more to existing customers and seeking new ones. Niche products can enable you to do both with very little investment in stock and marketing.

Once you have Sports Eyewear (be that impact protection or sport-specific eyewear) you have an opportunity to:
a) market yourselves to a whole new community
b) offer another opportunity to your patients to purchase something they will use and enjoy

I am sure that I'll give more ways to use these products in future blogs - watch this space.

2. Impactive products

I opened an account with JFRey recently. They had a patient see a boutique practice on a Spanish island and loved every piece they tried on. The practice owner, long established in a Yorkshire market town, had been looking for something that would make an impact and lure high spending patients into his store.

People need eyewear (optics is supposed to be more isulated than many retail businesses - is it controversial to say "retail" business?) and even though in some cases they may not spend as much on luxury products right now, there are those for whom good value does not mean cheap.

(Luxury products are different things to different people - when I mention luxury I mean Gold&Wood, Cartier etc - not necessarily Swarofski or Chanel)

I attended an open evening of a leading independent practice on the South coast. Ten patients (all over 50 ish except one) each purchased a JFRey or BOZ frame - all retailing for approximately £300. So there are great variations across the country.

Make an impact with new, ground-breaking products like JFRey, Koali, Oga - something that is not the same as they'll find in every practice.

3. Lower value complete packages

Where many patients are saying that they are simply interested in re-glazes the best idea I have heard from a leading independent is to offer a £75 complete pair. You maintain a higher than average margin on a frame product (and make sure it is something they find attractive too) and then you are only selling the difference between re-glaze and complete new pair (whether that be £25-40). This sounds like "Well, you can have new lenses in your current frames, but why not have a complete new look for £30 more?". For many that is an easy decision to make.

See you on the other side of the crisis!