The optical industry is going global-and has been for some time now-as the world gets smaller due to the Internet, increasing consumer demands for advanced goods, business opportunities in other countries, and the fact that trends travel at the speed of light around the world. What does it take to keep up? Is it important to be a global business? How does all this affect the optical retailer?

From left: Mas Tanabe and Jim Simon, Murai America; Pierre Mermet- Marechal, Aria; Jean Scott, Luxottica Group; Claudio Gottardi, S�filo USA; Debbie Forstenzer, Silhouette; Ann-Kristin Brendel, Brendel Lunettes; Masio Otani, Charmant Group. Missing is Ray Khalil, Lafont.

Eyecare Business invited a number of frame company executives-all with parent companies based outside the United States-to a roundtable discussion in May during the MIDO optical show in Milan to discuss the future of our global industry. The attendees included: Ann-Kristin Brendel, creative director at Brendel Lunettes; Debbie Forstenzer, vice president of product marketing at Silhouette; Claudio Gottardi, COO and executive vice president at S�filo USA; Ray Khalil, vice president at Lafont Co.; Pierre Mermet-Marechal, president of Aria, a division of Berthet-Bondet; Masio Otani, president of Charmant Group; Jean Scott, vice president of product development at Luxottica; Mas Tanabe, executive vice president, and Jim Simon, director of sales, at Murai America. Special thanks to them all.

It's a Small World

Eyecare Business: Is the industry becoming more global, and why?

Jean Scott, Luxottica: I think we are seeing the industry becoming more global in just the lack of product differences that used to exist. Especially in the American market-there used to be significantly different product needs than in the European market. All of us have probably seen that gap diminish significantly, especially in the last couple of years. People travel more now, trends move more quickly, and I think from a product perspective, it has made life a lot easier for the manufacturers.

Debbie Forstenzer, Silhouette

EB: Even in the clothing industry, there seems to be less geographic product differences. When you compare the products in shops in New York or Atlanta or Las Vegas, you'll often find the same thing. Does everyone see the same trend with eyewear?

Debbie Forstenzer, Silhouette: The question is whether it's based upon businesses becoming more global-as opposed to people's tastes becoming more similar. There are large global brands-Levi's, for example, that influence the tastes of people. I think it's not that the people's tastes or their needs have made Levi's respond in a certain way. It's the reverse.

	Ray Khalil, Lafont

EB: Is it really that the world is becoming smaller or is it just that our businesses are influencing consumers globally the same way?

Ray Khalil, Lafont: It's advertising by major chain stores and manufacturers. You go from one country to the next, and they are promoting the same thing. People tend to go toward what they see. I think it's the same for our industry, too. For example, if we all make red frames and show them in Hong Kong or Louisiana or wherever, it's going to be a trend after a while because everybody is showing that.

EB: Why do you think that the optical industry is so far behind?

Claudio Gottardi, S�filo Group: Because there are still pockets of very slow-moving trends in the optical industry. We still sell a huge amount of metal frames, square shapes, etcetera, in places like Ohio and Kentucky-and they even sell in Germany.

Masio Otani, Charmant Group: We still see some kind of localization in our industry. The markets are different in Asia, including Japan, and in Europe and America. They are still very different. I believe that for the time being this is the general course. 

Mas Tanabe, Murai

EB: Are the brands that people are choosing in different markets the same?

Forstenzer: If your market is a younger customer, they will probably think, "this is the thing my parents wear." For example, they might say, "My parents wear Levi's, therefore I won't." Well, we need to be aware that people may want to go back to a localized, individual kind of look.

Gottardi: But there are a lot of the phenomenons in the cutting-edge sports products area. A lot of the strongest trends are coming from California because California "dudes" are the ones who better represent the "dudes" of the whole world.

This is not a regional phenomenon. It's spreading fast around the world. Whatever is happening in California now is going to be happening six months from now around the world.

Forstenzer: As marketers or product developers, we have to be faster at jumping on trends. One of the things I find fascinating is that The Limited is now redefining itself. They hired a team of store and product designers that are the best of the best from the United States. They traveled around the world in a corporate jet just to get to where it was happening fast. They had a six-month plan which was, "We are going to be reinvented." I think it's our responsibility to think the same way.

	Ann-Kristin Brendel, Brendel

Pierre Mermet-Marechal, Aria: Only 10 years ago you could still find very different markets within the United States-African-Americans, Asians, Latinos-each with a very particular style. They would buy certain looks that were true to their segments of the market.

That has changed. Today the African-American population has a tendency to wear more mainstream styles-and so do the Asian and Latin communities. Miami [where Aria is based] has a huge Latin market which is no longer so radically different from the rest of the U.S. market. Obviously, we are seeing this all around the world, and I think the continuation of this trend is probably something that we can all count on.

EB: Do many of you have products that you sell in Europe that you don't sell in the United States? Do you have specific brands that you won't bring over to the U.S. because they won't sell here but will sell internationally?

Ann-Kristin Brendel, Brendel Lunettes: Very few. It's becoming more about color and sizes than anything else. And it's about fit.

	Pierre Mermet-Marechal, Aria

Jim Simon, Murai America: That's the thing that is different in the Asian market from the North American market-some styles have to be adjusted as they just don't fit.

Gottardi: There is also a brand uniqueness that is marketed in different locales. For example, we have Nine West in the United States, but we don't have Nine West in Europe. So, you can still address needs for the market based on information, market positions, and price positions. For example, in the Asian market you can often demand a higher price for quality products. But the same product in another market could not get the same price.

EB: Will all this continue as we progress another five or 10 years into the future?

Khalil: I think it depends on what segment your target market is. If you are in a high-end target market, you don't develop products that have to appeal to all peoples in all countries. For us, different products sell to different markets. At Lafont, the United States is quite fashion forward compared to the rest of the world, even Europe. In fact, we produce most of our plastic for the United States.

HIGH END TRENDS

EB: How is the higher-end business in the United States versus the rest of the world? Are we trendier?

Mermet: Nobody really has total leadership. Japan has a definite influence and so do France, Italy, and Germany. The U.S. has definite input there as well. One trend will start in Japan, another had started in the U.S., and now and then something will come from Germany, but in the end who is really the leader? It is very hard to tell.

Gottardi: The consumer.

Mermet: Yes, and it changes from one year to the next. It's not something that is steady. You have action and reaction on a constant basis.

Gottardi: Wouldn't you agree that trends are also based on the activities of the consumer, like the trends in sunglasses and in the high end? The trends of technology are determined in Japan, and the trends of the specific looks and the outrageous new shapes are coming from America. Everyone brings a piece to the pie.

Otani: No one here is saying that it would be good if there was international product. Although it would be so much easier for us as manufacturers-there would not be so many new styles and SKUs.

Simon: For the high-end market that we play in, we have to maintain an individual appeal. When we lose that, we become too mainstream, and then there is no interest in our product.

EB: This doesn't really relate to globalization, but in the clothing market the trends are filtering down so fast. It starts at the top and quickly makes its way to the H&M, Target, and GAP levels. Is that happening in optical as well?

Jean Scott, Luxottica

Forstenzer: Yes and no. The only thing that I think prevents some of that is when technology is the reason for the passion. There is more time involved in getting that technology to the consumer.

Gottardi: You are also dealing with a seasonal and regional market. The reason why these things are happening is because the regional environment is a seasonal environment, so every season they have to reinvent themselves and do something new. The same thing is happening to us in the optical industry. It comes into the market and goes out in one, two, or three years later, depending on the consumer's clock. In the sunglass market, we have exactly the same thing but faster. We have to reinvent the wheel all the time. We have to go out and beat the street and beat the market on what is the next trend.

SHORTER LIFE CYCLE

Scott: Now that there are all of these influences, I think our product life cycle has shortened dramatically. There is much more trend information coming in, and the product life cycle is shorter to recognize all of this input.

Forstenzer: I do believe that our life cycle on the product has shortened, and there is always the expectation for that newness. But by the same token, I think we frequently cut off the life cycles of a product faster than our customer is ready to relinquish it. But the retailers also ask you to do that-if you don't have a 15 percent follow-through in two week, adi�s.

Scott: It's interesting that this is happening at the same time our purchase cycle hasn't shortened. So, where is the drive and the momentum coming from?

Gottardi: The customer just has to acknowledge it. It was one thing to produce a trend in the '70s versus a trend now. Robotics, computer-age science, the Internet, and how fast we can send designs and ideas from one side of the world to the other have changed everything. Technology makes the process so much faster, and then we can meet the market so much faster than we previously could. So, we are producing a phenomenon more than a market.

EB: Is the consumer buying the new products as we are producing them? And how does this affect distribution?

	Jim Simon, Murai

Gottardi: Companies are promoting the changes, but if the consumers weren't there and demanding it, the offers wouldn't be there. It's like a computer-if you buy it today, six months from now it's obsolete, or at least they make you believe it's obsolete. The faster you can change the consumer's idea of the product, the faster the consumer will go after your product.

Getting The Message

EB: Do you also feel that you need to do more marketing in the current business climate?

Gottardi: No.

Otani: No.

Khalil: I think advertising is very important today because everything revolves around the media. The more you are out there and people recognize you, the more they will ask for your product. How does the consumer know a new computer came out? Some-body has to tell them. So some form of media has to tell them that this is the newest, latest, and greatest eyewear.

Simon: We actually find that we can't overexpose our product. When we do, we lose a certain luster to the customer. We want a balance.

The Danger of Sameness

Claudio Gottardi, S�filo

EB: Is there a threat of eyewear becoming too homogenous? Should there be more differentiation?

Khalil: No, there will always be segmentation.

Mas Tanabe, Murai: Yes, it is still different in the United States, Hong Kong, and Tokyo. You definitely have different needs.

EB: Are there any markets throughout the world that you feel have particular business opportunities right now?

Brendel: The largest companies have been global for a long time, but now even the specialty companies are no longer based in one market.

Global Retailing

Mermet: The retailer has had a major impact on our need to constantly come up with new products. For example, our reps will visit a store that might be sold out of two or three products that they did very well with. Obviously, then you would expect them to reorder, but they don't. They did well with that particular product but then they want to go on to the next.

I hear that from most major markets. I don't think it's strictly a U.S. attitude.

Scott: It's prevalent in France and Italy as well.

EB: Has it always been that way or do you think that the retailers themselves are adapting more of a global mindset?

Mermet: It doesn't apply across the board, but many retailers are becoming sharper than they were 10 years ago.

Scott: Yes, and when they discover EDI, we're all in trouble.

EB: As a retailer becomes more aware of global trends, are they less affected by country of origin choices?

Gottardi: Once the price starts going down, you have more to deal with on products coming from all the different regions.

	Masio Otani, Charmant

Forstenzer: The question becomes whether that's the retailer's opinion or the consumer's. Basically, the consumer is being trained today that product manufactured in China is okay. There is also much manufacturing occurring in China for the ready-to-wear industry so the consumer is being trained that it's acceptable, and they are less concerned with it. They think that if Calvin Klein manufactured something in China, then it must be good.
Khalil: I still think it's price driven. You can't expect to buy a $100 sweater and a $1,000 sweater both made in China.

Forstenzer: It does happen.

Simon: It's a cycle and it works itself through. Ultimately, the product that is made in China will reach a level of acceptance by the consumer in the same way that Japanese products did.

Gottardi: It's the philosophy of who is standing behind that product. Who gives you the guarantee? If Motorola was made in China, then Motorola made sure there were quality checks, and so the product must be okay.

Khalil: But in areas like high-end optics such as telescopes, the less expensive lines are made in China but they go out of their way to make it clear that the higher-priced goods are made in Japan or Germany. I think a product's country of origin is still important today, but maybe not in 10 years.

EB: How is the Internet going to impact the optical industry?

Khalil: Right now the Internet is very price-driven. People will go to the store and see something they like and then go to the Internet and see if they can get it cheaper. So we get hit a lot for that. It's something that is very difficult.

EB: Do any of your retailers sell your products online?

Khalil: Yes, but usually consumers have to go to the store first. We are not dealing with a durable good that you don't have to try on.

EB: What about companies such as EyeWeb, and eye.com?

Gottardi: It will be easier for people like that. But I think we will see more happening with sunglasses on the Internet. We have about 300,000 hits a month at Smith Sport Optics. That's because of the trendiness of the product.

Mermet: The Internet is going to be a factor. No new thing coming into the industry has ever taken the whole pie by a long shot, but it is a factor.

Forstenzer: It's one of our strong marketing tools.

Otani: You definitely don't want to wait to get on the bandwagon. FB