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A MONTHLY BRIEFING FOR OPTICAL LABORATORY OWNERS AND MANAGERS August 2011

BOOKMARK

E-commerce, The Race for Market Share (Part 1)


It is estimated that six percent of all retail purchases are completed online. Amazon currently has over 130 million active buyers and it is estimated 79 million tablets will be in the marketplace by 2015. The reality is that the average consumer loves the convenience of online shopping and all markets are forced to quickly adapt. The optical industry is no exception and lends itself well to online sales.

What effect is e-commerce having on the optical industry?

While to date there has been little market share for e-commerce players within the prescription eyeglass business, most of the large players in the industry have recently entered the market or plan to do so in the near term. It is widely believed that the early entry companies that capture market share will have a substantial advantage over their competitors who wait until the market matures.

Contact Lens vs. Prescription Eyeglasses

Contrary to the prescription eyeglass business, the e-commerce contact lens business has been thriving for years and currently represents a substantial portion of the market. However, the prescription eyeglass business is not as simple when compared to contact lenses and should not be viewed as an over-the-counter commodity. For all purposes, the pure play e-commerce companies have a logical path to selling prescription eyeglasses. They have a pre-established customer base and virtually no barriers to entry once they establish the appropriate supply chain. Especially in the value model, these companies may reasonably be expected to succeed in capturing market share by leveraging their existing customer base.

Premium Brands vs. Value Model

There is likely to be a distinction as to how premium market share is developed as opposed to more price sensitive sales. Premium brands will likely format a different approach to entering the online market. The rationale is simple. A consumer is much more comfortable trying an e-commerce purchase if the sale is under $100 and priced below competition. The marketing of an online purchase for a digitally surfaced lens, with premium coating and a name brand frame will likely focus on service, convenience and selection, as opposed to price.This will lend itself to ECP support for brand, direct to consumer sales and enhanced follow up sales for retailers, even in the premium sector. One thing does seem to be clear: the consumer follow up purchases are almost always a higher average selling price when compared to the original purchase. Once a level of trust is developed for quality, the consumer seems to be willing try a more premium product.

Next month, in Part 2 of this series, we'll discuss in detail how a wholesale laboratory can benefit and grow from E-commerce.

—Hunter T. Puckett is Vice President and General Counsel, HPC Puckett & Company. Based in San Diego, Calif., HPC Puckett & Company specializes in mergers and acquisitions of companies in the optical sector. You can send comments or questions about this article or any other Dollars & Sense articles to Hunter T. Puckett at hpuckett@hpcpuckett.com.


WEBSightNation


Vision Monday

LabTalk Art Contest to Turn Lab Trash Into Treasures

Don't throw those finishing pads away. Turn them into works of art and enter LabTalk's Trash to Treasure Finishing Pad Art Contest. Past entries have used finishing pads to create sculptures, mosaics and paintings, all out of used finishing pads.

To enter, package up your creation and mail to: Jobson Publishing: Attention Finishing Pad Art Contest, 100 Avenue of the Americas, 9th Floor, New York, New York, 10013.

First prize is a $500 American Express Card; 2nd Prize is a $200 American Express Card; 3rd Prize is a $100 American Express Card, and honorable mention is a roll of SecurEdge Finishing Pads. All artwork will be photographed in the Jobson studio. Photos of the winning entries will be published in LabTalk and entries will be displayed at Labapalooza. Artwork will not be returned but can be picked up at the Labapalooza event at the OLA/International Vision Expo West in Las Vegas. The deadline is Aug. 19, 2011.

The Trash to Treasure contest is sponsored by DAC Vision, Saint-Gobain, and LabTalk magazine. For questions, contact LabTalk editor, Christie Walker at (909) 866-5590, or cwalker@jobson.com.

Classic Optical Laboratories Launches New Website

Classic Optical Laboratories in Youngstown, Ohio has launched its newly designed website, classicoptical.com. The new site features a blog, provider newsletters, videos, links to social media sites and a secure provider portal for the thousands of ECPs Classic serves from Maine to California. According to the company's COO, Dawn Friedkin, the site was created with an improved architecture and fresh graphic enhancements to be more appealing and user-friendly for customers and visitors alike to ensure easy access to the information they need. The redesign incorporates bold colors and graphics and completely new navigational tools.

"Our online visitors will now experience a more vibrant and seamless view of Classic and its deep online resources," stated Friedkin. "With our new marketing effort, we intend to spread the word about our lab's robust production capabilities and fully integrated information technology resulting in a partner model to best meet the eyewear needs for members of managed vision care organizations, governmental agencies, and correctional institutions, as well as direct service to ECPs and their patients."

Essilor Closes Duffens Optical Branch in Hannibal, Mo.

Duffens Optical, a branch of Essilor Laboratories of America in Hannibal, Mo. closed its doors July 29, after 63 years in business. Orders are being processed by Duffens Optical branch in Topeka, Kan.


Trash to Treasure

Focus On

Precision Optical Group's Mike Tamerius

By Judith Lee

How does an optical lab help independent retailers compete with the "big box" optical stores?

Provide a quality product, quickly and at a great price.

That's the mission of Precision Optical Group (POG), and it's simplified every decision the company makes.

"The business becomes very simple when you make every decision based on how it's going to improve one of those three areas," said POG president Mike Tamerius.

The Creston, Iowa lab has concentrated on improving workflow and material handling. A complete conveyor system, track free tray carts and automatic lens retrieval units place orders in surfacing within 10 minutes of its arrival.

POG has the same challenge as all optical labs: implementing common manufacturing processes while producing a custom product.

They've found that about three to five percent of jobs must be pulled out of the automated process for more traditional evaluation and specialized production. The challenge-within-a-challenge is correctly identifying those jobs when they come in.

Tamerius noted that continuous improvement is the key overall, which means working at finding the smallest of improvements daily: "We question every procedure and process to find out if it still works for us."

POG's workforce drives the continuous improvement process with a dedication that Tamerius called "amazing."

"Our workers are very demanding on each other and enjoy the challenge of getting better daily. We have seen some incredible gains in our jobs-per-man-hour over the last 18 months," Tamerius said.

POG is thinking in broad strokes as well. The lab donates two dollars to a local cancer center for every pair of lenses coated with its Courage scratch-resistant coating, and intends to expand the giving to other charities.

One POG business unit is reaching out to other optical labs, providing payroll, accounting, purchasing, sales and marketing services.

"We love to help all of our business partners grow and prosper," Tamerius said. "And when we do, they reward us with great loyalty."



LabTalk Spotlight

How to Become the Artisan of the Modern Lab

By Judith Lee

Like the fine art of creating stain glass, drilled rimless is the intricate art of the optical world, fitting together small, intricate pieces to create the final vision. Even though automation can streamline the process and reduce waste, every pair of rimless frames are unique, created step-by-step with painstaking care. Independent labs report that drilled rimless represents 10 percent or less of their business, but more specialized labs are fabricating higher percentages of drilled rimless, and a leading equipment maker pins the market segment at 25 percent and growing.

"There is a custom-made, one-of-a-kind trend seen recently in fashion, cars, and jewelry," said Frank Balestra, technical director for Santinelli International. "The use [of drilled rimless] will increase further because of high tech equipment enabling customization and unique designs of rimless."

Smaller labs and retailers who do their own finishing might also see drilled rimless as an ideal niche to maintain their independence.

"Large chains like to process rimless in central labs, and that adds to the processing time. In contrast, the smaller stores and franchises can provide quick turnaround and better service if they bring rimless in-house," noted Steve Boudreau, president of Tabco Optical, which makes the Smart Drill. "If you are going to invest in finishing equipment, your setup should include a rimless drill."

To find out more about the art of creating rimless eyewear, visit labtalkonline.com and go to the FEATURES section where you will find this complete article.


EyeCare Video
Make What You Say Pay

You & Apple

One of the great joys of my business is that, while I frequently work in the digital and media space, I also get to work in other industries as well, e.g. investment banking, money management, professional services, even the pork industry! I am always fascinated by what people do and the challenges they have in selling their services or products. However while the industries differ, when these professionals tell their story, there is one failing they all seem to share...

They confuse laundry listing features, processes, models, and functionalities in excruciating detail with communicating the real source of their value: what their product or service does for the buyer. Does it increase ROI? Make buyers' lives easier? Save them money? Give them a competitive edge? Enable them to sleep better at night? Increase their revenues? Cut their costs? Increase their transparency? Help them be in compliance? Avoid litigation? Protect their share of market? Reduce time spent on routine tasks? Make them heroes to their clients? Other?

That is what people buy, not the latest wrinkle in your model. The cliche about people not buying nails for the sake of owning nails but for the holes those nails make holds true.

Take a Tip from Apple
Writer Nigel Hollis' article in The Atlantic Monthly talking about the differences in advertising among consumer technology companies echoes this point very well. "Blackberry, Samsung or Nokia ads are often laden with so much information that the recipient is left in a blaze of numbers and claims. Instead of focusing on how people interact with technology, those companies focus on features and specifications...Now think about the Apple iPad. The first ads for the iPad did not focus on the product features, like memory, speed, or slimness. Instead they portrayed someone relaxing on their sofa using the product. The ads didn't tell us what the product was. They told us how we would use it, accessing news and entertainment whenever and wherever we want." The rest, we know, is history.

Are You More Like the iPad or Samsung?
Whiz-bang technology notwithstanding, no matter what you sell, people don't care what you have, or how you do what you do until they know what it does for them. So, step back from the descriptive minutiae of your offering and shift your gaze to the bigger picture of what that minutiae means to your buyers. Showing how your offer changes your buyers' lives for the better will change your bottom-line for the better as well.

Words Matter: Make What You Say Pay!
—Anne Miller

©2011, Anne Miller, author, “Metaphorically Selling” www.annemiller.com.

NEW PRODUCTS

Neptune Filtration System

Manufacturer: Essilor Instruments
Description:
Eco-friendly water filtering system for closed water circuit lens edging.
Features:
Featuring a 13-gallon water tank, the Neptune system supplies a continuous flow of water to the edger without additional water consumption. Compared to an open system, the Neptune saves 11 gallons of water per edging job. Based on 20 jobs per day, a practice can conserve approximately 53,000 gallons per year.
Compatible with all table-top edgers, the Neptune system fits under any standard height cabinet and has an intuitive touch-pad interface. It also features an optional anti-smell module that neutralizes unpleasant smells from the edging of high-index lenses. Neptune filters all edged materials—including polycarbonate and even glass. Its unique overnight filtration cycle lets practices start each day with fresh water, only needing to add new water to make up for any lost to evaporation.
The Neptune system is easy to operate, only requiring a clean and simple filter replacement after approximately 1,500 lenses. Based on 20 jobs per day, this equates to changing the filter once every two months, compared to traditional closed circuit "pump and tank" systems, which require messy and unpleasant weekly water and tank liner changes.
info@essilorinstrumentsusa.com, 855-EZ-FINISH


Maxima PALs with New 'Freemax' Technology

Manufacturer: Indo
Description:
Barcelona-based Indo is launching Maxima, a new free-form progressive lens made with the company's patented surfacing technology, Freemax. According to Indo, Freemax offers the possibility of creating advanced designs that are not possible with standard free-form technology.
Features:
Freemax utilizes a new surfacing tool developed by Indo called Max-Tool, which allows surface curves to be changed more precisely. This enables the distribution of the aberrations in the frame shape to be modified. Aberrations can be reduced between 15 and 40 percent compared with standard free-form progressive lenses, with a 40 percent increase in the lateral visual field, the company said (see photo). Lateral stability is also maximized, eliminating the "swing effect" common with many progressives.
With Freemax, objective edge thickness can be achieved on the edge of the cut lens instead of the uncut lens edge, significantly reducing edge and center thickness. Additionally, Freemax uses prism compensation to balance edge thickness, according to Indo. Maxima lenses also feature Sun Max infrared protection, which helps prevent cataracts, itchy sensations and skin aging. They are available in 1.60 and 1.67 high-index material.
www.indo.es


Advanced Rolling Spindle Membrane (ARSM)

Manufacturer: PSI
Description:
PSI is expanding its Advanced Equipment Components line with the addition of the new Advanced Rolling Spindle Membrane (ARSM) an upgrade for cylinder machines. Designed to fit Toro machines built in 1988 and later, this new membrane incorporates the same, durable, simple, notched design and polish resistant materials as PSI's OLA award winning Advanced Reception Chucks.
Features:
Constructed to roll instead of compressing, the ARSM creates more freedom of motion allowing for a smoother movement that will lead to longer life and better surfacing. Its unique notched design secures the membrane to the spindle making it rotation proof and allowing it to remain on axis at all times. The membrane is resistant to polish and other chemicals so it won't dry out and get brittle. It is easy to replace at lower replacement costs when compared with re-attachment charges or buying a new assembly, according to PSI.
Vital Stats:
PSI's Advanced Equipment Components are cost effective upgrades for cylinder machines founded on the Advance Reception Chuck (ARC). The ARC has allowed labs to save money by incorporating this longer lasting wear part. Made of high quality, chemical resistant membranes and a simple design, the ARC has fewer parts to wear out. It also features a unique notched design that keeps the chuck on-axis while providing the ability to change the membrane while the chuck is on the machine without losing its axis settings. Airlines don't interfere with how the lens moves on the lap. The ARC and ARSM can be used for both plastic and glass lens processing.
www.LookToPSI.com, 800-237-8154


Improved Trilogy Semi-Finished Lens Blanks

Manufacturer: Younger Optics
Description:
California-based lens maker Younger Optics has improved its Trilogy Semi-Finished lens blank to ease digital and conventional lens processing.
Features:
The lens blanks have been thickened in the lower base curves in order to ease processing for both digital and conventional surfacing methods. This change affects clear Trilogy lenses, bases 0.50 to 4.25, but does not apply to Trilogy lenses with 5 through 8 base curves.
Trilogy lenses, made with Trivex material by PPG Industries, offer the best combination of being thin and light, while also offering excellent optics and impact resistance. Trilogy is an ideal choice for three-piece drill-mounted frames, due to its excellent resistance to small fractures at the drill points.
www.youngeroptics.com

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Send us news about your lab's new products, services, special events, tech advances or personnel changes.

Andy Karp

Andrew Karp
Editor, Lab Advisor
akarp@jobson.com

 

Christie Walker

Christie Walker
Editor, LabTalk
cwalker@jobson.com

Visit LabTalkonline.com for additional articles of interest about labs.

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