GfK has a good grasp of the optical market, with more than 160,000 optical retail shops around the world supplying their sell-out data for its retail panels, on top of its consumer surveys. It has been following the evolution of the market for many years, allowing it to draw some interesting conclusions.
Gianni Cossar, GfK's global director for optics and eyewear, noted in a presentation during the recent Mido trade show in Milan that its evolution has been marked by three disruptive trends in the last few years: vertical integration among manufacturers and retailers, the transformation of the store from an optometrist practice to a retailer and the morphing of the end user to a consumer from a patient.
Another important change has taken place in the client/retailer relationship because of the deep financial crisis that recently hit the European economy as well as the strong technological innovations caused by the diffusion of the internet, which have boosted the rate of transformation of the market.
For one thing, consumers have become less loyal toward certain brands, as they have come to decide which ones are “cool.” They have also become more sensitive to the appearances and to the shopping experience. Cossar suggested that brands and retailers should engage in more consumer activation and consumer loyalty programs to generate traffic to the stores, adding that exclusivity deals can help. Category management should be optimized.
Cossar pointed out that the total European ophthalmic optics market grew by about 12.5 percent between 2008 and 2017, performing better than other industries. The strong growth was led by spectacle lenses and frames, whose sales went up by 25.6 percent and 13.8 percent, respectively. Sales of progressive lenses jumped by 48.1 percent during the period, whereas sales of other types of ophthalmics were more or less flat.
Together, these two categories raised their aggregate share of the market to 78 percent from 73 percent, indicating that the “technical part” of the market has driven the industry, especially with the popularization of progressive lenses, rather than its fashion aspect. Sales of contact lenses rose by 18.5 percent. In contrast, sales of sunglasses fell by 22.9 percent.
This trend has prompted opticians to prescribe more expensive lenses, while recommending cheaper frames, as they focus on margins. The market's development has also been marked by the expansion of trade brands, or private labels, in all product categories.
In addition, house-brand frames advanced by 26.4 percent during the period, while licensed frames slipped by 6.9 percent and private label frames increased by 23.0 percent. Similarly, in the sunglass sector, house brands slipped by 8.6 percent, but licensed brands dropped at a much higher rate of 48.4 percent, while private-label sunglasses jumped by 107.3 percent.
Cossar believes that leading brands could seek to penetrate the contact lens market, pointing out that Ray-Ban has entered a co-branding agreement with CooperVision in this segment in Asia. He warned that beauty specialist retailers could steal some of the business from opticians for contact lenses and sunglasses, revealing that the phenomenon is already underway in Asia. In view of this new trend, particularly in the faster-growing emerging markets, Cossar believes that the global market may swing back from function to fashion.
More on GfK's research in the next artcile and at the end of this issue.