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Trends for Tomorrow
The crystal ball speaks - industry experts share their thoughts on where the optical industry is headed

Trend forecasting guru Faith Popcorn asks, "If you could know everything about tomorrow, what would you do
differently today?" A look at where this industry will be in three, five, or 10 years could certainly give optical retailers a leg up on tomorrow. Here is a look at the forces pushing retailing, manufacturing, and dispensing in a number of directions.

1. COUNTRY OF ORIGIN

There will be a continued shift on the manufacturing side to the Far East. "Not only China, but Vietnam and Indonesia to some extent," says Bill Thomas, executive vice president and CEO of the Vision Council of America (VCA). "That will be accelerated with transfers from Europe."

In addition, he says, brands will begin to push the idea of the quality of their item versus the quality of the place where it was manufactured.

"The other thing that could very well happen in the next five years is that we will see Chinese companies creating lenses to be delivered next day to the U.S.," Thomas continues.

"They are savvy enough and smart enough to deliver product that quickly," he adds.

2. TRIMMING THE MIDDLE

The high-end and low-end sectors of the eyewear retail market are getting stronger while the middle is seemingly going away.

"We are noticing it in retailing in general," says Nick Miletti, a member of the VCA's AR committee and director of technical support at Luxottica Retail. "Consumers are either going top end or low end. It doesn't matter what the consumer's background is. They say, 'I am going to get the best that there is.' If the product doesn't have a whole lot of value, they are going to go low end."

Miletti says he is seeing AR lenses playing well into this trend. "There is basic AR and then the upper-tier product. Really, multiple-tier product is the wave of the future. It's a very upper-end product. Most are retailing at $80 to $120."

3. LASER INFLATION

Fears that laser vision correction procedures will shut down optical retailing will not be realized. Last year just over one million people (up from 650,000 in 2003) had one eye or both eyes done—but there are still currently 145 to 150 million people that require vision correction.

This can be seen as both a benefit and a detractor. "We don't think it's an issue," says VCA's Thomas. "We know people who have laser correction buy better quality sunwear and lenses for whatever correction they may still require.

"We don't think the current laser surgery processes will change significantly in the next five years," he adds. "But in 10 years, you may have some additional technology come out."

4. CROSS CHANNEL

The industry will continue to see consolidation—and there will likely
be more of it across categories. The landscape is ripe for something like cross-channel consolidation to happen.

"The merger of Zeiss and Sola presents a unique opportunity. Both of those companies provide a
large portion to chains and mass merchants. By bringing things together in a vertical integration like Luxottica has done on the frame side, a company could guarantee themselves the best price and best selection on the lens side," Thomas says.

5. CHANGING FACE OF ECPS

"The whole matrix of eyecare professionals is changing from a white male to an Asian female and from men to women," says Thomas.

It is also shifting from independent practitioners to group practices and those who work for somebody. Eyecare practitioners are going to be driven to work for others because they don't have the capacity to do the number of exams they need to stay profitable, Thomas predicts.

6. TECH TALK

From a product front, sunwear will continue to be driven with
technology. "Five to 10 years from now we could definitely see more fusion between eyewear and high-tech," says Tibor Gross, president of the Sunglass Association of America and executive vice president and COO of Barbara Creations.

"The latest release of a sunwear/ headset product at the consumer electronics show shows us this. It is not inconceivable that you could walk into Walgreens one day and buy a cell phone attached to your sunglasses."

This market certainly could use a boost—sales decreased from $1.9 million in 2003 to $1.8 million in 2005.

7. READING CLASS

The challenge to move the aging population into the doctor's office and away from the drugstore for their reading needs continues to be a dilemma. Though PALs are the
preferred form of vision correction, readers will continue to see growth.

In fact, this market has grown from $433 million in sales in 2003 to $517 million in 2005, according to the annual VCA VisionWatch survey.

8. LOSING MARKET SHARE

Independents will have to continue to fight off forward movement by chains and mass merchants to take over their market share.

"The independent market share will continue to constrict," says VCA's Thomas. "It's about both price and convenience. The mass merchants and chains sometimes do a better job of presenting options to the consumer and marketing value-added things."

One example of this is Wal-Mart, which has been pushing to bundle AR on all lenses they sell. ECPs, however, haven't embraced the technique yet.

Independents are holding on with a 46.4 percent market share of frame dollars in 2005 (down slightly from 45.1 percent in 2003), according to the VCA's VisionWatch survey. Chains accounted for 33.5 percent and mass merchants at 10.2 percent (up from 8.9 percent in 2003).

9. FREEFORM, WAVEFRONT, AND MORE

It is going to get a whole lot more expensive to be a wholesale lab. "Processing is going high-tech," says Joe Siebert, director of operations at Three Rivers Optical in Pittsburgh.

According to Paul Zito, president of Encore Optics in South Windsor, Conn., the future is definitely in freeform. "It is going to be an equipment revolution," he says.

What this equates to on the retail side is an increase in specialty items. "We can create more unique lenses for the patient's unique lifestyle," says Siebert. "We can give the ECP the ability to do lifestyle dispensing and design a lens. It will be a one-on-one lens design. Some now say they are customized because within a progressive there are 30-some designs available. This is way beyond that."

10. CONSOLIDATING HIGH END

Like the rest of the industry, some predict the high-end will be hit by the consolidation bug. "We may see three large high-end opticals in the future," says Craig Chasnov, owner of Eyetopian Optical, which has four high-end locations in the Bonita Springs, Fla., area.

"Someone will come in and buy all these people up. This, of course, will change the way luxury vendors do business. Someone's got to cash all these people out—it's probably being discussed as we speak."

11. VISION REHABILITATION

According to the National Advisory Eye Council, more than one in 20 people over age 65 have macular degeneration. It is the leading cause of blindness and vision loss among Americans over age 60.

As baby boomers age, the number of cases are expected to double between 2000 and 2020. That's one reason why vision rehabilitation, low vision care, and related drug and surgical initiatives will be among the fastest growing areas over the next 15 years.