Like many industries, the business of optometry has been disrupted a lot by new technologies, the rise of the new consumer, the decline of the traditional ‘on the street’ shopper and the realisation that in general, we just have too much stuff. Yet with clever strategies, we can still win.
Following a decade of super cycle growth in consumer spending, there’s no doubt that retail is suffering – and the hope of a speedy recovery is fading fast.
Yes, consumers still have income growth. But many have become wary of the financial economy, insecure of their futures and more selective about what they spend their money on. They prefer to spend on experiences such as travel and cafes, and for convenience, takeaway foods.
They are also turning to online purchasing, which provides instant gratification 24/7, thanks to the proliferation of smart phones, tablets and other portable devices. Online retail also provides access to a global market, price transparency and discounted product, which is playing havoc on pricing strategies for traditional bricks and mortar retailers.
You can easily double your contact lens practice and the number of contact lens patients you see
As a result, bricks and mortar retailers across many categories are faced with decreasing sales volumes and price deflation – in general, retail sales online are growing close to 20–30 per cent whereas sales through traditional retailers are growing at just 2–3 per cent.
Online contact lens sales are estimated to make up between 1–20 per cent of all contact lens sales. There are no accurate estimates of this within Australia. Regardless of the specific figure, the trend is here to stay.
Play To Our Strengths
Global market forces and online businesses are making it increasingly difficult to compete on contact lens products and there seems little chance that governments will step in to regulate the market. So it’s up to us to protect this part of our business in every way that we can. We need to play to our strengths.
That strength is customer service and the good news is, it’s something customers still want and we, as optometrists, still have. We have a service and a customer relationship that online providers simply cannot – and will never – match.
But to maximise its inherent value, we need to de-link the service we provide from the products we sell.
The optometry industry needs to charge consumers for contact lens examinations so they come to expect to pay, regardless of the provider they see. If the majority of the industry does this it will change consumers expectations. In doing so, we can price contact lens products more competitively. Eventually, this will have ramifications across the profession. For too long we have educated our patients to believe they are entitled to receive our expertise and service for free via Medicare.
If optometry is to survive as a health care profession, customers will need to pay an amount that reflects the services they receive.
If optometry is to survive as a health care profession, customers will need to pay.
Dentistry conditioned consumers to expect to pay for their services, and they did it very well. A typical dentist’s bill itemises individual products and services and lists the prices alongside. Xrays, teeth clean, fillings, flouride treatment, fissure sealants… the list goes on, and the patient pays. Best of all the service is not subsidised by the product.
Room for Growth
The good news is that even if online contact lens sales erode the market by 20 per cent, we can still retain 80 per cent market share – and there is plenty of room to grow this market.
In Australia, our biggest opportunity is that only 5.8 per cent of corrected wearers wear contact lenses compared to 11 per cent in the UK and 20 per cent in the US.
By making more of a conscious effort to suggest contact lenses as an option on the initial consultation, and combining that suggestion with a free trial, we can easily turn the contact lens industry from AUD$160m annual sales to $320m. That is, you can easily double your contact lens practice and the number of contact lens patients you see.
The Way Forward
As practice owners, it’s up to us to provide leadership for our staff and our patients… to work out a plan that will achieve our goals and ensure contact lens sales remain a profitable part of the practice.
But if you think it’s all too hard and like the status quo, well… enjoy the view but don’t forget to turn the lights out when you are done.
Jim Papas has extensive experience in contact lenses, retail, business and brand development, staff training and IT. He and his companies have received many awards for customer service and innovation in retail, including BRW Best use of Technology 2011, ARA Victorian Boutique Retail of the Year 2011, Victorian Business Retail Hero 2011, and ARA Retail Innovator of the Year 2011.
