INTERNET
Taming the Internet
Many of your vendors and peers are starting to control the wild Internet with the help of a growing number of B-to-B opportunities. Here's what they say about their efforts....
By Erinn Morgan
Illustrations by Eric Westbrook

Who's afraid of the Internet? Not many, it seems. By now, most of us have spent many an evening surfing in the virtual world. A large number of us have bought novels and CDs, booked vacations, purchased automobiles, and participated in auctions on eBay. U.S. consumers have given great evidence of their fascination with the worldwide Web, and because of this, e-commerce has seen tremendous growth in the past few years.

Still, the optical industry has been slow to grasp and embrace this trend. While replacement contact lenses and sunwear have certainly reaped Internet profits for their manufacturers, few among the industry's ranks sell frame and lens products to consumers via this medium.

Additionally, while many other industries have streamlined operations through business-to-business solutions (online inventory control, purchasing, order tracking), the optical community is just beginning to look in this direction. There are many options today for online ordering-through contact lens companies, wholesale labs, lens manufacturers, and portals designed solely for this purpose. Yet, for the most part, the industry's response to this new option has been slow.

Many view it as an immense learning curve that must be conquered to get up and running with a new system. "Do I have anything to gain by ordering contacts online?" asks Chet Steinmetz, owner of Visual Effects Optical in Chicago. "No. So until I do, I will continue to make a phone call. It all revolves around time and efficiency. Until it allows me to save time, it's not going to happen."

Others who have come to rely on portal Websites for online insurance claims processing, however, say they are becoming increasingly interested in purchasing products through the Web. "If you asked me, 'What's the next thing?' I'd say online ordering is it," says Joel Zaba, O.D., of Virginia Beach. "That's definitely a short-term goal for us."

The Jury is Out

While opinions-and acceptance-are mixed about online ordering, many are convinced of the benefits of online insurance claims processing. "We currently utilize only the insurance claims filing aspect of Eyefinity.com," says Zaba. "We have so many patients and they have a variety of insurances-Medicare, Medicaid, VSP, Blue Cross/Blue Shield. The fact is that through Eyefinity you can file all of them. It's an excellent practice management tool that enables you to control the insurance because you have one particular place where you are filing claims."

Online claims processing offers excellent organizational benefits to a practice. Additionally, some note that it helps keep costs low. "It is very reasonable from a cost perspective because they have a very fair fee structure," notes Zaba. "It is financially unwise not to do it."

Several dispensers add that handling claims online can speed up payments from insurance companies. "We submit a claim and it will show up on the next batch of payments-about six months later," says Deanna Andrews, billing manager at the dispensary in the Pacific University College of Optometry.

This success has led some dispensers to open their minds to online ordering. For some, however, past experiences have held them back. "We tried it very early in the game and I think they weren't geared up yet," says Ernest Lowenstein, O.D., of Newton, Mass. "It took a long time for the product to arrive. The system adds another layer of complexity. We order from them and they turn around and order from the vendor. We order directly from frame suppliers and, so far, that has been satisfactory."

Still, many plan to test the waters in the future, hoping that purchasing products through portals such as Eyefinity, e-dr., First Insight, and Visionweb will save them time and money. "The beginning of next year we will be implementing a new computer system that will enable us to do online ordering," says Lowell Galambos, ABOC, an optician and instructor at Pacific University College of Optometry. "I will welcome doing online ordering. It will simplify things and we can teach the students how to do this as well. It will certainly clean things up here as far as the ordering process."

There are varying opinions regarding which products make the most sense to order online. Commodity items such as replacement contact lenses and re-orders on ophthalmic frames, lenses, and sunwear are the most cited by dispensers. They say they still want to personally view new products, color choices, and customized styling, whether that pertains to frames, lenses, or sunwear. The overwhelming sentiment is this: "When it comes to product you still want to see it, feel it, touch it," says Zaba. Thus, for some, online ordering may initially be relegated to re-ordering items with which buyers are already familiar.

"In the future, I believe online ordering will be part of how we do business, but we still will want to have that face-to-face contact with reps," says Zaba. "It's important now to have enough common sense to realize this is the wave of the future, but that we have to integrate it with the policies we have been using in the past."

For many practices, it will be simply a matter of time before they have the proper logistics and staff to handle online ordering. "Our computer is in a different office than our secretary," says Lowenstein. "That's another factor we have to deal with. And there's the training issue. Basically, we're not ready. We're ready for online claims processing, but not for online ordering."

Zaba points out that it is critical to find the key staff person who can handle this function. "You have to have a great optician who is great with the computer," he says. "Or have a great computer person and train him or her to be great with optical products."

So it would appear that once eyecare professionals set themselves up properly for it, the future holds only continued growth for online ordering through a combination of portal Websites, manufacturers, and labs. The membership and growth numbers reported by portals and labs are certainly impressive for the past few years.

Online Ordering Options

There are a few main portal Websites that are currently running this area of the business. Many of them offer multiple services, including insurance claims processing, personal Website development for the eyecare practitioner, and online ordering. Following is a rundown of some of the players.

Dispensers can build their own e-commerce sites at e-dr.com.

e-dr. (www.e-dr.com): Launched in July 1998, this site provides services such as e-dr.PRO, a feature that allows dispensers to build their own e-commerce sites where patients can reorder their replacement soft lenses directly. InstiFile gives them the ability to verify patients' insurance eligibility via the Web before they come in for their exams. The company is also working on a feature that will allow dispensers to file insurance claims electronically.

According to e-dr. President and CEO Lou Fouts, the Jacksonville, Fla.-based operation works with more than 100 optical product vendors and does business with up to 2,300 eyecare professionals each month. "We process anywhere from 17,000 to 18,000 orders per month, accumulating to nearly $2.4 million in monthly sales," he says.

Eyefinity provides online claims processing for 800-plus carriers.

Eyefinity (www.eyefinity.com): This site, which is affiliated with VSP, went live in the spring of 2000 and boasts nearly 18,000 eyecare professionals as members. The service provides online claims processing (eClaim) for more than 800 commercial and government carriers. This portal also offers eWeb, a Website building/customization service, as well as added exposure through the average of 190,000 insured patients who search the site's online doctor directory monthly. Another feature is eBuy, the online ordering system where dispensers can also place a lab prescription order. "Practices can essentially file their insurance claim and order the patient's prescription on one site," says Susan Bruketta, vice president of marketing.

	First Insight's portal site, paradEyes.com focuses on online ordering.

First Insight (www.first-insight.com): This company, located in the suburbs of Portland, Ore., was founded by President and CEO Nitin Rai in 1994 with the launch of maximEyes-practice management software for a paperless office, which also currently connects with insurance companies for claims processing. The First Insight portal site was recently launched and features paradEyes.com for online ordering and optometry.net, where eyecare professionals can create their own Websites.

Visionweb (www.visionweb.com): This site recently launched for beta testing, and a group of eyecare professionals are using it for spectacle lens orders. It is expected to be open for business sometime in the beginning of 2002. It was originally launched in 2000 by Essilor, along with Johnson & Johnson. Other partners include Allergan and Sightstreet. The soon-to-be-launched site will initially host the Websites of 20,000 eyecare professionals previously brought on by Essilor. New members can create their own sites "in about 10 minutes," according to Dennis Upah, Visionweb president. "It will allow dispensers to compete against online and 800-number contact lens companies," he says. Online ordering is also part of the Visionweb package.

The potential benefits in aligning with one of these (or different) portal sites involve saving time and money, an important issue for busy eyecare professionals. Patients, however, can also benefit from some of these sites, especially the ones that allow them to order with their eyecare professional directly and check the status of their order online.

But the benefits will only be realized if dispensers are set up and ready to handle online claims processing and ordering. Many see this part of the process as the real challenge. "One major challenge relates to connection speeds," says e-dr.'s Fouts. "Most dispensers are dialing up via AOL or on a 56K modem, not on high-speed lines." At press time, e-dr. was rolling out a new Website designed with the 56K modem user in mind. "We have to know who our customer is and realize that bandwidth has not increased as quickly as we thought it would."

The other challenge is selling products online-products that dispensers may want to see in person. "I won't buy frames online because I like to look at them and feel the quality level," says Al Armenta, product buyer at University Optical in Grand Junction, Colo.

Manufacturers and Labs Online

In addition to the launch of the collection of portal sites designed for dispenser use, some manufacturers are beginning to brave the online ordering arena. Many contact lens companies, as well as a few lens manufacturers, offer this service to their dispensing customers. Few, if any, of the frame manufacturers in the United States market currently offer product directly to their clients online.

"You have to save people time and money to be successful," says Mike Hundert, president of REM Eyewear. "If we can't accomplish either of those two things online, customers will definitely find it much easier to pick up the telephone and speed dial to a customer service rep who can help them and take orders and answer questions right then and there. This method is still extremely efficient. Until we can transfer this to the Net, it doesn't make sense."

Certain products, such as contact lenses and accessories, certainly lend themselves more to online orders. Hilco is one company looking in this direction and, due to requests from their customers, is planning on launching its own e-commerce site for optical dispensers through the Net in early 2002.

One of the strongest trends that is starting to pick up steam, however, is online prescription processing through wholesale labs. "We're doing it, a lot of it," says Marty Bassett, president and CEO of Walman Optical (www.walman.com), which has 22 labs located across the country. "We're not working through the portals, but we have set up a system of our own."

Launched in January 2001, the system is currently taking about one-sixth of all Walman's prescription orders directly over the Internet. "We started off doing about 60 transactions a day, and now we are doing 10 times that," he says. One of the factors directing Walman's online success is that most of its customers are already online in their offices. "Our customers like that they can get information on job status in the lab, and also get a much more complete prescription. On one-third of ophthalmic orders, we get a trace, and that really helps the lab and is ultimately beneficial to the customer."

Continued growth in the future is anticipated, according to Bassett, who reports his e-commerce business grew by 25 percent in August alone. "I could easily see where we would be getting between a third and a half of all our orders online."

What the Future Holds

The growth illustrated on the lab side, as well as the interest and launches in the portal and manufacturer segments, certainly suggest that the Internet is a growing player in the optical industry. Still, portal executives are making bullish predictions for the growth of this medium for the future. And many dispensers seem very interested and open to the idea.

"Eyecare professionals continue to seek solutions that simplify insurance administration, reduce costs, and increase patient visits," says Beth Smith, vice president of e-commerce for Eyefinity. "The Internet has created an opportunity to deliver these compelling solutions in new ways."

The future of the Internet marketplace will be decided by eyecare professional's acceptance of business- to-business e-commerce. Says Pacific University College of Optometry's Galambos, "Frankly, I can't see how this is not the wave of the future."