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Out of the Shadows...Into the Shadows
A decade later, EB follows up with the ECPs who've survived superstores and the threats of managed care
By Lindsey Aspinall

Another 10 years have passed and EB has followed up with the survivors once again. Of the five ECPs interviewed in 1996, three are still in practice and two have sold their businesses.

These ECPs noted that if things seemed foggy 10 years ago, they have only gotten murkier. Unlike the looming chain competition in 1986 or the HMO drain in 1996, 2006 does not have a single unifying concern. Despite their savvy survival strategies, these ECPs are unsure of what's ahead.

BROKEN CHAINS

In 1996, those interviewed said their concerns over big chains were waning and that plenty of good came from their arrival. "There's the old saying that what doesn't kill you, makes you stronger," wrote Cliff Coady, former senior editor. "All five say they became better retailers because of the strategies they embraced when superstores appeared ready to take over their world."

Today, the interviewees express that the chains not only taught them better business strategy, but also drove patients to their practice. "A lot of times, the chains actually send their customers to us because they just can't do what we can," says Carol Card of Card's Opticians in Winter Park, Fla. "There are so many specialty lenses on the market today and they don't offer them all. Chains also don't do any specialty lenses they have to drill—they'll only do their brands. If there are things your practice can offer that the chains can't, you have a real advantage."

Mark H. Cohn, OD, of Bellevue, Wash., stepped up his practice in 1986 when a Quick-Sight superstore moved in around the corner. He began offering round-the-clock and emergency repair services, and told EB that business was up around 100 percent. In 1996, he was still reaping the benefits and when we recently followed up, it was the same story.

"Ten years later, I stand by the same things I said in 1996," says Cohn. "There are plenty who come back to our practice after trying a one-hour place and say they did not really get the glasses in an hour, cannot wear what they were given, or found that the chains were actually more expensive to begin with."

While some felt the pressures of chains moving in, Bernie Winitz of Glasses Ltd., in Chicago never feared. In 1986, he reported zero problems despite the arrival of two nearby superstores. A decade later, he claimed that chains simply could not outdo the service offered by good independents.

Today, he reports that the chains have only helped his business. "The chains simply can't compete with our service," he says. "We have people who know the business, and we take great care of each of our clients. We treat them as though they were a friend or a relative."

A NEW THREAT EMERGES

With the threat of chains under control in '96, many saw managed care as the monster of the future. In fact, they expressed that the fear of superstores was at least "solid," whereas the way HMOs could change the business was foggy.

With chains, ECPs knew what the exact threat was and found ways to overcome it, but with managed care, the solution was muddled. "The whole future lies in managed care, and frankly, it's an unknown entity at this point," said David Meldrum formerly of Dunwoody Opticians in Atlanta in 1996 (while still involved in the optical industry, Meldrum has sold his practice).

In 2006, the fear of what managed care could do to independent practices has leveled out. Whereas in 1996, Card expressed that dealing with HMOs was the worst thing the practice had gone through, in 2006 she says many of her patients have decided vision insurance really isn't worth it. "A lot of people end up paying $300 after the insurance somewhere else, when they would have done better just coming here and getting a better price without the insurance." she says.

Cohn, who in 1996 said managed care was a bigger issue than superstores, says that the HMOs have not gone away, but simply forced him to set guidelines. "We decided a long time ago where our threshold was as far as the types of plans we could and could not accept for reduced reimbursement," he says.

WHAT LIES AHEAD

If the defining issues of the decades were battling chains and HMOs in 1986 and 1996, respectively, then what are the major issues of 2006? That's where the
shadows return. While the past two decades have had problems the optical industry could unite to overcome, in this new decade, there is no single unifying issue.

■ Clients. For Winitz, the battle underway is bringing in new clientele. "We're constantly looking for new blood," he says. "My clientele getting older has really affected me. It's the nature of high-end retail. You constantly have to find new ways to bring in new blood."

■Real Estate. Changes in the way retail chains select their locations is another of the day's main concerns for independents. "It's not problems with the stores, it's the street," Winitz says. "They are becoming more mall-like than entrepreneurial. The bigger guys like Banana Republic come to a hot street and start pushing the little guys out."

■ Low End. The industry is also facing challenges involving fragmentation of the market. "If present trends continue, I think we will see a shakeout in the low end of
this industry," Cohn says. "The price-only and quality of merchandise is becoming further eroded and more consolidated to the ultra low-end markets."

■ Generation Gap. Optical has traditionally been a family business, but Card notes that's changing. "Sadly, I see family-owned opticianry starting to die out within the next generation," she says. "If trends continue as they are, it seems a lot of young people feel it's not a highly lucrative business [and doesn't interest them]. There was an old saying in our family that you will always make a profit from this business, but you may not become rich. That doesn't seem to appeal to the next generation."