Having a buying strategy helps business run smoothly. Urban Edge style 7332 from New York Eye/Hart Specialties

 

 

 

Going deep? Buying wide? Planning experts recommend strategies for setting your buying plans

 

 

 

By Erinn Morgan

 

One thing is for certain with buying strategies�there are plenty of them. But which one is right for you? While some optical retailers go deep into a few brands, others offer a broad selection or limit their selection to what is offered at a discount through their buying group.

 

Read on to see what works for you.

 

The Chain: A Group Strategy

With the numbers of its members behind them, this buying group negotiates lower prices with frame, lens, and contact lens suppliers.

 

Standard Optical, which has 17 locations in the Salt Lake City area, has a focus on moderate pricing and value for their customers. Which is why owner Stephen Schubach says it made good business sense to join forces with a buying group.

 

�Belonging to Opti-Port gives us buying power,� he says. �Instead of my 17 locations or Crown Optical�s 22 locations in St. Louis, we have the negotiating power of 300 doors.�

 

Generally, there is a group of preferred vendors and members place orders through Opti-Port�s Internet portal. �Our buying routine has changed drastically. Before, we saw every vendor and we bought what we thought was right for us,� says Schubach. �Now, looking through sample bags has gone away.�

 

Standard Optical�s product assortment is a bit more deep into a few brands. �We try to consolidate our purchases to preferred vendors,� he says. He usually picks about 75 percent of his stock�65 percent of frames, 100 percent of lenses, and 85 percent of contact lenses�from Opti-Port�s vendors and buys deep. �We don�t have more than 10 or 11 vendors and they are quite happy because they get 70 to 80 percent of all our frame business,� he adds.

 

Still, Schubach does occasionally look to outside suppliers, especially if they fill a niche. �I am not likely to look at a new vendor,� he notes, �But I might if this new company has some really good product.�

 

He also brings in outside suppliers for some higher-end, branded frames.  �They are not Opti-Port vendors, but they fill a specific need,� he says.

 

The buying power of this group has also enabled them to expand into direct purchasing of cases, screws, and cleaning cloths. �We can direct import from China without any major problems,� he says.

 

�Those types of things are allowing us to compete a little better than the national chains. We do have a lot of buying power and it allows us to look like a 300-door chain,� Schubach says. �How do we compete with an ECCA or Wal-Mart if we cannot buy as well as them?�

 

1. Buying deep or buying wide depends on your market. 2. Blinde Eyewear style The Pushover from Optical Shop of Aspen; 3. FrameWorks style 409 from Hilco; below: Sophia Loren style M176 from Zyloware

 

 

Will You Grow Your Optical Business in 2007?

 

The word on the street points to the fact that you just might. The National Retail Federation (NRF) predicts that retail industry sales will increase 4.8 percent over last year. The NRF expects slow first half economic growth to give way to accelerated sales in the second half, according to its quarterly Retail Sales Outlook report. Retail sales actually increased by 6.3 percent in 2006 due, in part, to a stronger-than-expected sales surge fueled by robust consumer spending in the year�s first half. �This year, slow economic growth will be reflected in moderate consumer spending and retail sales gains,� says NRF chief economist Rosalind Wells. �The quarterly industry sales pattern will be the opposite of last year with modest gains early in the year and better increases in the second half.�  

 

 

The High-end Retailer: Into the Deep

Two luxury eyewear retailers from opposite coasts agree that buying deep into fewer brands is the right direction for them.

 

�We try to offer a lot of choice, but we do have certain brands that we do go deeper into,� says Amy Block, co-owner and optician at Block & Zuckerman in West Orange, N.J.

 

At Optical Outlook, a small high-end chain with seven stores in the Los Angeles area, owner Dan Deutsch concurs. �I am deep into fewer brands; that is my buying strategy,� he notes. �It is difficult to see so many companies and a lot of designs are very similar. Also, if you have too much, you can look like a big mish mosh store.�

 

Deutsch narrows things down, but notes, �I do look like I am a dealer for certain brands. But that works for me, especially with the people that do a good job of branding. People see a brand elsewhere and then come here to get it because we do a good job of representing it.�

 

On this front, Block & Zuckerman takes a different tack. �We try to find frames that are not branded,� says Block. �Our customers don�t want something with a name all over it.� Instead, she says, they focus on things like high-quality construction, materials, and customer service.

 

Why does this work for their business model? �It�s just our choice�we decided we wanted to go in that direction because some customers would say, �I love this frame but could you take the logo off?�

 

Block & Zuckerman has made this move within the last few years; so far, it has proven to be the right direction. �So often the whole frame itself could be covered with the logo,� says Block. �There is such wonderful product out there and it�s a shame to clump it up with a big logo. Our

customers just simply don�t want to wear a name.�

 

With a large percentage of its inventory coming from boutique frame houses located abroad with little warehoused product in the U.S., Block notes that selections are also guided by accessibility to parts and services.

 

�Some frame companies put their own  nosepad on so you can only replace it with their own. We try to avoid that,� Block says.

 

There is one other buying strategy this shop has found to be successful. �My business partner and I make buying decisions together; and if we both like it, then we get it. If one hesitates, we just don�t buy it.�

 

Blending new styles and old favorites balances inventory and gives customers something new to see every visit. 1. Neostyle model PR College. 2. German Brillen style Munich-150-8. 3. Framescape style 5002

 

Buying Strategies Trends

 

An interview with Dan Butler, the National Retail Federation�s vice president of merchandising and retail operations, reveals what retailers in other product sectors are thinking about when it comes to buying.

 

EB: What are the most recent trends in buying strategies?

Dan Butler: A lot of what is impacting retailers� approaches to buying are approaches to the supply chain. What works efficiently so they have it when they need it and it�s not left over afterwards? There is a lot of focus on enhancing auto-replenishing systems. With fashion, you have to be forward thinking and anticipate what you think you can sell. There is a lot of focus on technology and how to capture that info quickly on what is selling. These days, it�s not uncommon for retailers to have a monthly cycle to move merchandise in and out of their stores.

 

EB: Do retailers today buy deep in a few brands or broad in many?

Butler: The department store approach in the late �80s was narrow and deep. Now, it�s: what is making your store special? In the �90s we saw a lot of sameness. Now private label is being developed because it has become very important in the last five years in helping retailers become unique. You see more retailers open up with all private label. Brand recognition is still very important to any retailer, whether they are all private label or carry national brands. Customers are looking for quality and value in the product. Those retailers who have invested in low-cost, low-quality goods are definitely struggling.

 

 

The Moderate ECP: Variety Show

The benefits of going deep into a few lines include a certain simplicity in managing your inventory, fewer companies to deal with, and stronger relationships with those that you do. On the flip side, going broad across many brands and narrow into their mix certainly gives your shop�and your customers�more choices.

 

�We definitely shoot for variety�we try to show a lot of options,� says Greg Ferguson, owner of Beach Drive Optical in St. Petersburg, Fla. �Instead of 75 pieces of one brand, I�d rather have 20, 20, and 20 from three others and have a lot of selection because there is so much great product on the market.�

 

Ferguson says his shop carries about seven to 10 major brands and then a number of off brands. �But we just don�t go deep in them. We may have five or six of these as well. We go a little bit deeper into the brands that are hot for us.�

 

At Optical World, which has eight stores in Pennsylvania, New Jersey, and Virginia, wide selection is also the strategy. �Right now we are more broad in our assortment and offer more variety,� says Patricia Cavener, general manager. �We carry about 20 lines total, and some we do go deeper into and offer more.�

 

She says Optical World�s success is due to a strong assortment. �No one else has quite the lines that we have,� she says. �Some are designer brands and some are just simply more unique. That�s the idea of the store in general: originality.�

 

With multiple product lines to manage, both shops say they find inventory management and tracking to be extremely important.

 

�We are totally computerized. Our inventory is on a spreadsheet and we watch it. If we see something cooling off, we phase that out and focus on something else,� says Ferguson.

 

Optical World�s strategy is similar. Notes Cavener: �If something is not working for you, move it out and put something new in it�s place. You just have to track it to know this.�

 

Certainly, most products�and some brands�will have a shelf life. �What we�re seeing is that brands actually get hot and cold. About two years ago, we couldn�t keep a certain brand in the store and now it�s sitting on the shelf,� says Ferguson.

 

 When it comes to inventory Beach Drive Optical operates in more of a fashion mode, since its assortment is upper moderately priced. �We like to turn it over every three to six months,� he says.

 

Even successful frames are phased out, Ferguson adds, �Because we don�t want 15 people wearing the same frame everywhere. Our customers often travel in the same circles.�

 

His philosophy of continuous change keeps a fresh stock for his clients: �Sell a frame, bring in another one. If a customer comes in six months later, they will see a whole new fashion selection.�  EB

 

 

With multiple lines, tracking is a critical tool in deciding on future directions. Shown above: Hana style 633; shown below: BCBG style Verona from ClearVision