Optical Services 2017 a view to Profitability



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Optical Services 2017
A View to Profitability


  • According to Vision Monday, a leading publication for the eyewear industry, total US vision care revenues for the 12 months ending June 2017 were $40.17 billion, a 16.6% increase from the 12 months ending June 2016.




  • Eyeglasses accounted for 55.6%, or $22.32 billion in revenue. Contact lens revenue increased the most, +3.1%, to $4.89 billion. Sunglasses revenue increased +1.9% to $4.21 billion. Revenue from eye exams also increased.




  • The top 50 U.S. retailers increased their 2016 share to 36.7% from 35.3% for 2015, for an estimated $12.813 billion in revenue. The top 10 US retailers also increased their share, to 31.6%, for 2016 from 30.5% for 2015. Mass merchants’ share was 9.7%.


Top 10 US Optical Retailers, 2016

Retailer

Revenue

Retailer

Revenue

1: Vision Source

$2.63 B

6: Visionworks of America, Inc.

$917.9 M

2: Luxottica Retail

$2.40 B

7: MyEyeDr.

$411.0 M

3: Wal-Mart Stores

$1.73 B

8: Refac Optical Group

$280.0 M

4: National Vision, Inc.

$1.15 B

9: EyeCare Partners

$275.0 M

5: Costco Wholesale

$961.0 M

10: Eyemart Express, Ltd.

$245.0 M

Vision Monday, May 15, 2017 Issue
Eyes on Contact Lenses


  • ABB Optical, a company that distributes optical products to two-thirds of US optometrists, said in its industry report that among its customers, there has been almost an 8% increase in contact lenses, particularly daily disposables, which increased 23%.




  • Sales of toric contact lenses increased 11%, driven by daily disposable torics, and multifocals increased almost 17%. Reusable contact lens sales decreased 0.4%, but are increasing with recent new monthly spherical, toric and multifocal product introductions.




  • The Optical Business Barometer gauges the business outlook among independent eyecare professionals on a scale from 1–5, with 5 being the best. The OBB was 3.94 for Q1 2017, an increase over Q2, Q3 and Q4 2016, but a decrease from Q1 2016.


Eye Care Business Insights, 2017

Question

Answer

Sell twice as many sunglasses during summer

  • 36%

Keep same hours during summer and winter seasons

  • 95%

For second pair of glasses bought, evenly split between eyeglasses and sunglasses

31%

Plastic is the most popular frame material

  • 69%

Aesthetics is most important to the customer when choosing a frame

  • 46%

Vision Monday, April 21, 2017 and August 14, 2017 issues

Mass Merchants’ Revenue Increases Decline


  • Mass merchants and wholesale clubs with optical departments increased their 2016 optical revenues 4.0%, or $3.372 billion, but considerable less than the 15% increase during 2015.




  • This sector’s revenues represented 9.7% of the total US vision care market and 26.3% of Vision Monday’s top 50 retailers. This was a slightly lower share for the top 50 than for 2016, meaning that they are gaining share from independents.





Mass Merchants and Wholesale Clubs, 2014–2015

Store

2016 Sales

2015 Sales

2016 Units

2015 Units

Walmart total

$1.767 B

  • $1.746.0 B

  • 3,227

  • 3,228

Wal-Mart Stores

$1.575 B

  • $1.554.0 B

  • 3,000

  • 3,000

National Vision

$192.0 M

  • $192.0 M

  • 227

  • 228

Costco Wholesale (Luxottica Retail)

$961.0 M

  • $915.2 M

  • 491

  • 475

Target/Super Target

$285.0 M

  • $225.0 M

  • 476

  • 390

Sam’s Club (Wal-Mart Stores)

$158.0M

  • $160.0 M

  • 575

  • 582

Shopko Stores

$98.0 M

  • $94.0 M

  • 140

  • 140

BJ’s Wholesale (Refac Optical Group)

$87.5 M

  • $86.7 M

  • 203

  • 201

Fred Meyer (National Vision)

$15.0 M

  • $15.0 M

  • 29

  • 29

TOTAL

$3.3715 B

  • $3.242.0 B

  • 5,141

  • 5,045

Vision Monday, May 15, 2017 Issue
Optical InSights


  • Although Warby Parker, the online optical retailer, was not included on the 2016 top 10 list, it was #11, with $220 million in revenue, double that from 2015. Starting January 1, 2018, United Healthcare members can use their benefits at Warby Parker.




  • During November 2017, Healthy Eyes Advantage (HEA), a buying group of four optical providers, started to serve more than 10,000 members. HEA will give independents lower prices and marketing support to help them compete with the big retailers.




  • According to an EyeCare Business survey, the biggest threat to optical retailers is online companies, 30%; managed care, 22%; BOGO pricing, 14%; big box retailers, 11%; and the economy, 11%.


Independent Optical Retailer Revenue Breakdown, 2016

Product

% of Total Sales

Lenses

37.6%

Frames

28.0%

Examinations

  • 22.9%

Contact lenses

  • 10.4%

Sunglasses

0.8%

OTC readers

  • 0.2%

Statista, 2016

Clear Product Trends


  • The sale of blue-light blocking lenses will increase during the next year, say 84% of eye care professionals (ECP) surveyed. In the South, sales of blue-light/digital eyewear are more than the sales of sunglasses.




  • The fastest-growing categories according to ECPs are Rx-ready frames, 29%; Rx sunwear, 29%; children’s frames, 11%; Plano sunwear, 9%; and sports products, 6%.




  • The most popular lens material during 2016 was polycarbonate, 74%; followed by high index, 45%; CR 39, 44%; and Trivex, 28%.


Eyewear Marketing Stats, 2016

Marketing Practice

Percent

How ECPs market their practice



- Online

  • 29%

- Social media

  • 20%

- Other (includes newspaper, radio, TV, word of mouth)

  • 23%

- Direct mail

  • 10%

- Print

  • 9%

- Email

  • 8%

Actively market contact lenses

  • 66%

- Favorite contact lens marketing is point-of-purchase displays

54%

Say direct-to-consumer advertising is important

23%

EyeCare Business, January 2017
Visions of the Future


  • At the International Vision Expo held during September 2017, the trend in frames was pink and other playful colors. Bars across the tops of frames continue as a fashion trend. Wood frames were also popular.




  • New lens technology to reduce eyestrain from digital devices was released, including a progressive prism design to relieve binocular misalignment and single-vision lenses with extra accommodative power for fatigued eyes.




  • Shamir announced its WorkSpace lens, a virtual-reality video experience that “takes the viewer through a variety of daily outdoor activities highlighting the advantages of each lens.” The purpose is to make it easier for the ECP to sell specialty lenses.


Facts About Kids’ Eyewear, 2017*

Metric

Percent

Sell eyewear for infants and toddlers

  • 45%

More than 10% of all eyeglasses are sold to teens (ages 14–17)

  • 55%

Say a good warranty is most important for selling eyewear to tweens (ages 9–13)

78%

Sales of children’s products as percent of total gross sales

  • 22%

Created a separate area for children

  • 67%

Say point-of-purchase materials were most helpful when selling to children

  • 39%

Vision Monday (Jobson Optical Research), July 2017 * of those selling to younger than 18 age group
Additional Analysis
Data from the newly released Buffalo, NY Fall 2017 survey from The Media Audit reveals some interesting correlations and contrasts between adults 18–49 and adults 50+ who plan to buy glasses and/or contact lenses during the next 12 months and their average weekday TV viewing.
Adults 18–49 and 50+ Who Plan to Buy Glasses and/or Contact Lenses

During the Next 12 Months, by Average Weekday Hourly TV Viewing, Fall 2017

TV Viewing Periods

Adults 18–49

Adults 50+




Percent

Index

Percent

Index

5:00 AM–7:00 AM

18.2%

157

14.0%

100

7:00 AM–9:00 AM

18.5%

139

15.7%

76

9:00 AM–10:00 AM

16.7%

139

15.5%

92

10:00 AM–11:00 AM

12.6%

139

6.9%

52

11:00 AM–12:00 PM

12.8%

142

11.3%

67

12:00 PM–1:00 PM

10.3%

99

22.7%

119

1:00 PM–2:00 PM

14.5%

141

18.2%

97

2:00 PM–3:00 PM

10.0%

89

11.1%

67

3:00 PM–4:00 PM

18.0%

147

8.5%

47

4:00 PM–5:00 PM

17.8%

109

14.2%

68

5:00 PM–6:00 PM

24.6%

119

29.6%

96

6:00 PM–7:00 PM

46.3%

149

34.2%

84

7:00 PM–7:30 PM

50.3%

148

27.2%

61

7:30 PM–8:00 PM

54.1%

144

33.5%

70

8:00 PM–10:00 PM

48.6%

155

29.4%

69

10:00 PM–11:00 PM

30.8%

154

26.3%

107

8:00 PM–11:00 PM

68.9%

140

73.8%

107

11:00 PM–11:30 PM

32.7%

137

27.9%

102

11:30 PM–1:00 AM

22.5%

136

17.4%

126

Based on The Media Audit’s Buffalo, NY Fall 2017 survey
What’s interesting – and somewhat counterintuitive – is the large indices for adults 18–49 throughout all morning hours compared to adults 50+. Not surprisingly, adults 50+ spike during the 12:00 PM–1:00 PM period. The younger age group of adults then deliver both large percentages and indices from 3:00 PM into late night while adults 50+ are just average during this period, although their largest index is 11:30 PM–1:00 AM.


Sources: Eyecare Business Website, 11/17; Statista Website, 11/17; Vision Monday Magazine Website, 11/17; The Media Audit, 11/17.
Updated: November 2017
© 2017 Media Group Online, Inc. All rights reserved.




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