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HomemistoryOnline Optical Retail Controvesy

Online Optical Retail Controvesy

The World Wide Web – it’s the vehicle which carries business through international borders with the minimum of fuss and cuts out the middleman, appealing directly to the public. It’s the way more and more business is being done globally in every field of endeavour… and the retail spectacle and contact lens business is no different.

In this issue, we look at how the internet is affecting retail optometry in Australia, what the regulations are and what industry leaders think.

Type “spectacles and contact lenses” into Google and a cursory glance will tell you that there are scores of internet companies from all over the world selling vision products online.

A closer look will disclose that there are dozens of these companies based in Australia selling products ranging from frames and spectacle lenses to contact lenses at enormously reduced prices. But are these online companies eating into the market share of the average retail business? Conventional wisdom encourages optometrists to look at gaining a higher income from consultations – something for which they have studied for years at university.

This is only the tip of the iceberg of online contact lens and eyewear offerings. There are no doubt many others lurking in the shadows waiting to carve out a niche for themselves

But there is more to online optical stores than meets the eye. There’s the danger posed by these online operators to the client or patient. There’s the problem of quality control and redress by disaffected customers and then there’s the medical problem a client faces from an inferior product.

The Therapeutics Goods Association (TGA) is the federal authority which regulates the supply of these products, regardless of the ‘path’ to market – either through the conventionally accepted supply chain, or when supplied through online marketing organisations.

The TGA told mivision: “There are generally two different sets of circumstances surrounding online supply of these products, depending on whether the online organisation is based within Australia or overseas.

“Where the organisation is based in Australia, it may be operating as a sponsor of medical devices (either manufacturing and supplying, or importing and supplying) and must comply with the relevant requirements of the regulatory framework for medical devices, or as a distributor, in which case the regulatory obligations apply to either the Australian manufacturer or the importer.”

However, the TGA warns that where the organisation is based overseas, the TGA has no jurisdiction for regulatory oversight of its activities.

“As with any online purchase from an unregulated source, consumers should take the necessary precautions to assure themselves that the quality of the product is acceptable. Purchasing of therapeutic products by this mechanism is considered to carry unacceptable risks and TGA would advise against it.”

As we reported earlier in the year, the most recent entry into the Australian online retail space of contact lenses and eyewear is the Canadian based online retailer, Clearly Contacts, which chose a clever guerrilla marketing campaign targeting the Australian Open to introduce its brand to locals in January.

Steve Wallace, Clearly Contacts Vice President of Sales, said: “There is a large opportunity for people to save money on eyeglasses and we want consumers to be aware that it’s a choice.

“The plain truth is that glasses do not cost AUD$300 to make. That price includes large mark-ups by optical retail shops and there is an alternative,” said Wallace.

The Clearly Contacts website boasts “over 100 million contacts delivered” and presents an all- Australian front with the use of an Australian flag planted above the logo. However, the information provided in the company profile proves otherwise. There is no local Australian address. Clearly Contacts is a subsidiary of Coastal Contacts Inc., which claims to be “the world’s largest optical store” and trades on the Toronto Stock Exchange using the COA symbol.

Singapore based www.quicklens.com.au goes one better than Clearly Contacts with its claim that it has “over 150 million contact lenses delivered”. Quick Lens also goes one better in the flag stakes with two Australian flags and a New Zealand flag in its banner.

Unfortunately, customers aren’t able to contact Quick Lens by phone. Next to the phone number in the ‘About Us’ section it says: “We can not answer your inquiry at this No. Please contact us via email.”

The Medical Technology Association of Australia (MTAA) is the umbrella organisation representing, among other medical devices, manufacturers of contact lenses.

Of major concern for manufacturers of contact lenses according to a spokesman, is a lack of national regulation for the supply of contact lenses, in particular, the need for a script for dispensing.

“The controls over the sale of contact lenses need to be as rigorous as controls on the prescription for contact lenses. These controls need to be consistent nationally and include positive verification of a prescription before a contact lens is sold regardless of outlet.

“A lack of national regulation may lead to patient safety issues, even more so when the lenses are dispensed through the internet. This happens outside the good care that an Optometrist can provide in the professional confines of a consultation room.

“The recently published draft paper from the Optometry Board of Australia (Guidelines on the prescription of ocular appliances) outlines the requirements for all Optometrists (from 1 July 2010). It includes some provisions to ensure consistency nationally for prescriptions. However, it falls short of regulating at a national level the requirement for scripts for the supply of contact lenses.

“MTAA and its Contact Lens Industry Committee (CLIC) have requested that the

Optometry Board codes and guidelines be extended to include the regulation of the supply of optical appliances, specifically contact lenses.”

Online Aussies

Australian websites selling optical appliances at a cheaper or discounted price is on the rise. Results of our online trawling includes examples such as www.colouredcontacts.com.au operated by Online Retail Pty Ltd, a company based in Victoria which operates a number of online retail stores including a florist and… a lingerie store. However, there are a number of local companies offering consumers contact lenses and eyewear including a few based in Queensland:

  • www.eyecontacts.com.au which claims to be “Australia’s preferred online contact lens shop”;
  • The family run www.contactlens.com.au from the Sunshine Coast which offers a 1300 number and tells us we can “save on every order”; “Australia’s Number One Source for Contact Lenses and Vision Care Products”, www. contactsonline.com.au, which offers customers a mobile phone number to call for enquires, and
  • www.eyesonline.com.au which says it’s the “Premiere (sic) Online Supplier of Disposable Contact Lenses in Australia”. This company hails from Beenleigh and tells its customers to: “Please do not ring the Beenleigh practice if you are a webb (sic) patient.”

The recently launched www.mylens.com.au can justifiably claim it is “Proudly Australian” as it is based in Artarmon, Sydney, as can www.contactconnection.com.au, owned by Eyedeal Pty Ltd., who offer a North Sydney PO Box but no phone contact and claim: “We are a 100 per cent Australian owned and operated private company which was first founded in 2007.

This is only the tip of the iceberg of online contact lens and eyewear offerings. There is no doubt many others lurk in the shadows waiting to carve out a niche for themselves.

Whilst most absolve responsibility for faulty products, they do dovetail their offerings with the following disclaimer: ‘For proper information and advice about your contact lenses please see your eye care practitioner. Make sure you always have your eyes examined regularly. If you feel any pain or discomfort with your contact lenses please remove them immediately and see your eye care practitioner.’

Essilor, one of the largest optical multinationals, has joined the online market in Australia after having first launched “myonline.com” in North America. This site offers independent optometrists the opportunity to create their own online store so they can offer their own customers an online option to order products.

According to Essilor’s Australian CEO, Pascal Toneatti, the idea is to also “give them (independent optometrists) the opportunity, at minimal cost, to participate in selling to their patients on the Web.

“Based on experience so far, it appears to be an effective platform, allowing business owners having an established practice to set up their own virtual shop as an extension to their practice.

“We are looking at tuning it to the needs of our local market and will then offer it to Australian practices. Initial trials could start before the end of the year; at this stage we are looking at practice owners willing to go through the learning with us, and welcome expressions of interest.

“The cost of the service to the practices is still to be defined, and certainly is intended to remain minimal in order to ensure profitability is reached with a small number of actual online spectacle sales,” Mr. Toneatti says.

Another multinational, Luxottica, said “the online offering is really about convenience for our customers to familiarise themselves with our broad range”.

However Luke Cahill, Professional Affairs Manager for Johnson & Johnson has a different take on the situation.

“Many reps are reporting optometrists’ concern about the internet. Trade laws mean Contact Lens suppliers can’t limit supply, but we see the risk of complications such as eye infections due to lack of advice and less than optimal care regimes after buying online which is bad for everyone,” says Mr. Cahill.

“As an organisation, we’re concerned about the risk of reduced compliance that may arise with the emergence of online vendors. It’s important we stress the health and safety benefits of regular reviews with their optometrist. Suggesting patients buy contact lenses in larger quantities from their optometrist is one means to assist compliance because you preclude their ability to stretch their last pair”.

What They Said

The proliferation of online dispensers has caused a deal of angst and comment from the Australian industry.

Andrew Harris, president of the Optometrists Association of Australia (OAA) is someone who believes optometrists should be charging more for consultations to increase revenue. He also acknowledges the problems that online eyewear can cause.

“Ordering glasses online would appear to be fraught. It’s near impossible to know what a frame will look and feel like unless it’s sitting on your head. Choosing and measuring up lenses can be a complicated and exacting procedure. Perhaps there is a way it can be done effectively online but I think along with Santa Clause coming down your chimney it’s pretty unlikely.

“I think more contact lenses are being ordered over the internet. The evidence seems to suggest these patients have more problems with their contact lens wear due to dropping off on their follow up care. Obviously it is important that all patients get the appropriate eye care and that remuneration for consultations allows for this care to be delivered effectively and sustainability. What I’m saying is charges for consultations should reward the practitioner for the work, expertise and equipment they bring to the service”.

Optometrist Jim Papas from Eyeclarity agrees. He believes that the future of optometry lies in regulation of prescriptions and services fully reflecting the cost of their provision.

“Optometry is experiencing extensive changes caused by the growth of the global market place and the development of the internet and technology. It is not the only industry which has had to confront these changes and many industries have also experienced such changes,” he says.

“The advent of such change has meant the goods have been more widely available to competition and commoditisation. This is an irreversible change which means that industries like Optometry need to adapt to the future”.

Finola Carey, the executive director of the Optical Distributors and Manufacturers Association (ODMA) commenting only on the purchase of spectacles online (not contact lenses and solutions) says buying glasses online tends to turn spectacles into just another commodity.

“Dispensed prescription eyewear requires explanation of form and function and this is given during the selection and delivery process and that can be limited when buying online. Spectacles need to be accurately fitted. Lenses nowadays are much more technologically advanced. They are lighter, clearer, thinner, and safer and need to be more accurately fitted. This just cannot be done via the internet as the client needs to be accurately measured”.

She points out that glasses are a tactile commodity and vary greatly in materials used, style and other technological features. The frame and the lenses together need to be matched to offer the best solution for the clients’ needs.

“Glasses nearly always need final adjustments during the delivery process to meet their intended performance. In addition, lens form and function is extremely detailed and there are many options that need to be considered to meet the vocational requirements of any consumer. This is especially so with complex and multifocal type prescriptions,” said Ms. Carey.

Cam Battaglia, CEO, ProVision Eyecare says online retailing is a permanent fixture of the broader retail landscape and like almost every other industry is being challenged by low cost online options that are impossible to compete against on price alone.

“However there are so many more aspects to the purchase of eyewear and therein lies the opportunity. The in-practice experience offers consumers a whole raft of value adding benefits in a way that an online shopping experience cannot. Expert advice and fitting, validation of lens prescription, adjustments, warranties, non-adaptation and replacement policies, as well as after sales servicing are some of these,” says Mr. Battaglia.

“We need to educate the consumer that when it comes to their eyewear, cheaper is not always better. At the end of the day, eyewear needs to perform a critical function for wearers – clear vision. For people turning to the internet, there is no guarantee that even this will be achieved. Whether it is product quality, lens selection, fit or authenticity, a lot is left to chance.

“From a ProVision perspective, we’re focused on highlighting to consumers the undeniable advantages of purchasing from their trusted optometrist”.

Michael Jacobs, CEO, Eyecare Plus says there are two major reasons why patients buy contact lenses online – convenience and price.

“The independent optometry practice finds it difficult to compete in either of these categories. They aren’t open 24/7 and they usually aren’t as cheap as the major online suppliers. Of course we could cry foul – why hasn’t the OAA done more to get better regulation? Why do the contact lens manufacturers continue to supply the online resellers,” he asks rhetorically.

“The truth is that optometrists are going to have to redesign their business model so that product mark ups are not their primary income”.

Mr. Jacobs warns that contact lenses manufacturers are “signing their own death warrants” because optometrists will stop prescribing contact lenses if there is no income from them and without a prescription there is no sale.

Optometrist Jim Kokkinakis from The Eye Practice warns that the sale of lenses over the internet builds apathy towards the products and their medical implications.

He points out that the typical patient who purchases online will be using older products and the prescribing optometrist will be less likely to recommend any upgrades as they become available.

“I have upgraded most of my patients to daily disposables, so see very few problems, but a recent microbial study revealed that patients who suffered from sight threatening events using contact lenses were significantly more likely to have purchased their lenses off the internet – it breeds apathy,” says Mr. Kokkinakis.

He points out that Canada has deregulated the online market and a prescription is not even required.

“My gut feeling is because severe infection is uncommon, the market will slowly evolve this way unless a politician’s child is blinded by buying product off the internet,” he says.

One high profile optometrist, who asked to remain anonymous, told mivision: “The internet cannot be controlled by any retailer or group so it is a matter of ‘how can I take this new form of commerce then turn it into my advantage.

“The business of optometry has changed dramatically and will continue to change as has our consumer behaviour. Who amongst us has not shopped on the internet for convenience or price or both? When a wearer of contact lenses is educated they are easy and safe to use, lets keep our patients wanting to come back to us by providing service that is better than satisfactory it is brilliant/superb/outstanding/OMG.”

Ms. Kylie Liddell, ANZ Product Manager (Retail Eye Care), Allergan Australia is another advocate of optometrists looking at the costs of their consultations.

“I think it’s paramount that product recommendation is based 100 per cent on patient needs, not how much margin can be made on a product or how much bonus stock is on offer. Eye Care Practitioners have invested years at university and working in practice and are considered experts when it comes to eye care. Obviously, it’s these clinicians who are best equipped to answer patient questions and guide patients on the best product/s to address their needs.

“I’m not convinced companies that trade entirely on the internet are based on this premise, particularly when many online sites are geared to appeal to time-poor, price-conscious consumers (aren’t we all) to make a quick buck by under-cutting established optometry practices”.

Ms. Dorothy McDiarmid, director of Advanced Medical Optics believes that the internet supply of optical products is not only a shame for the industry and the profession, but can also be a real issue for consumers.

“With regard to spectacles, if the prescription is not filled correctly, the patient may never know and will never appreciate the loss of vision they are experiencing. This could affect night driving, reading using a computer and many other areas of their day to day life. No one is looking after the quality of the spectacle lenses or frames either, the consumer may be getting much cheaper specs, but if the quality isn’t there then they are just getting what they paid for.

“With regard to contact lenses, this is a much more dangerous area and if the consumer is not seeing his/her optometrist on a regular basis they are taking risks with not only their sight but their vision. It can also leave a consumer with the wrong idea about contact lenses, if no one is overseeing the fit and the consumer is not happy because their lenses are not comfortable then they just simply drop out of contact lenses and no one is a winner”.

Ms. McDiarmid says regulatory authorities should make prescriptions compulsory for contact lenses and ban spectacles from being ordered via the internet.

“Who does the final frame fit and ensures that the lenses are correct? Who makes sure that the contact lenses are what was prescribed and that they fit well?” she asks rhetorically.