Negotiating the New Normal

Talk about a turnaround. “For the first five months of this year,” says National Retail Federation (NRF) president Matthew Shay, “retail sales are already tracking 17.6% above the same five months of 2020.”

How is optical faring? In the wake of the Covid-19 pandemic, as of June 2021, the Eyecare Business 2021 Covid-19 + Market Trends Study found that 8% of eyecare professionals nationwide are seeing and expecting no negative financial impact from the pandemic. When comparing pre-pandemic 2019 with 2021, a fortunate 27% of practices are down under 10%. On the other end of that spectrum, 15% are down 30% or more.

Against a backdrop of the faster-than-expected economic recovery throughout much of the U.S., responses are mixed when it comes to rebounding in optical. Of those surveyed,14% share they’re already back to pre-Covid 2019 levels. Another 71% are looking for that full return later this year, while 6% say it won’t happen until 2022.

COVID CONCERNS

That’s not to say Covid is in everyone’s rearview mirror, however.

➤ In terms of protocols, as of early June, 60% of ECPs surveyed report still requiring masks for both patients and staff, while only half continue to conduct health safety checks for patients upon entry.

➤ Of ECPs surveyed, 50% say staff has expressed health concerns about being at work, while 28% of staff members say they’re concerned about enforcing safety protocols and Covid-related rules with patients.

➤ More than half (54%) of respondents report they had been fully vaccinated as of early June, and another 40% share they have received their first shot. Only 3% don’t plan to get vaccinated.

PRACTICE PROGNOSIS

Most ECPs surveyed express optimism about their ability to fully rebound and have tightened their patient scheduling.

➤ While just under a quarter (24%) schedule hourly appointments, 60% now book less time between appointments. For some, that’s the result of increased demand.

➤ For example, one Midwestern optician who works for an optometric practice says their biggest challenge is “scheduling all of the patients who want to be seen as there is so much demand.”

➤ On the other hand, online is seen by many as more competitive than before Covid. As one Southern eyecare professional says, “The pandemic has accelerated online eyewear purchasing by the consumer. Convincing them that we offer much more value for their dollars is a top challenge.”

THE ECONOMIC PICTURE

Things are popping. Literally.

At the end of May, the consumer price index (CPI) saw its biggest year-over-year leap since 2008.

➤ Up 5% YOY, that number not only surpassed expectations but guaranteed that talk of inflation will remain center stage.

➤ Another result is that the NRF just revised its year-end forecast, stating that retail sales will likely see increases between 10.5% and 13.5% this year.

➤ On the job front, the unemployment rate is doing a rapid downward dive. According to the U.S. Bureau of Labor Statistics, the unemployment rate was only 5.8% on May 31, 2021. That’s a stark contrast to the 13.3% rate exactly one year earlier, though it’s still higher than pre-pandemic levels—pegged at 3.5% in February 2020.

➤ Full-year financial forecasts continue to change as the economy gains strength. For example, the NRF announced in late May that its analysts now expect the gross national product (GDP) to end the year around 7%...much higher than the 4.45% to 5% it forecast earlier this year.

The Northeast

How ECPs on the East Coast are faring in the uncharted waters of today’s post-Covid world.

Baked beans and basketball. Both got their start in the Northeast.

The physically smallest of the four regions, it nonetheless includes some of the biggest pockets of population in the country. Though it encompasses only 5% of the land in the U.S., 20% of the country’s population calls it home. The most developed and densely populated region, it currently accounts for 20% of the country’s gross domestic product.

What about ECPs in the region? In contrast to 8% nationwide, only 4% of respondents say they’re expecting no impact on business vs. pre-Covid 2019. More of them have, however, responded by adding more higher-priced eyewear than have any of their peers in other regions (36% in the NE vs. 24% nationwide). They’re also more likely to be selling Rx sunwear online and to be posting on social media daily.

UNEMPLOYMENT

The region’s unemployment rate of 6.8% in April paints a much brighter picture than the rate of 14.1% a year ago. More economically mature than other regions, the Northeast has, however, seen fewer new business starts since Covid than the other three regions.

What about jobs? Rhode Island saw the nation’s biggest month-over-month drop in unemployment in April...down 0.7% from March. As for YOY job gains, numbers in New York were second only to those in California, and the District of Columbia and Vermont ranked second and third, respectively, in terms of the highest percentage of job gains month over month. When looked at YOY, Rhode Island lands in third place nationwide with its impressive employment increase of 17.1%.

IN FOCUS

The Northeast is actually made up of two divisions—New England and the Middle Atlantic—with the latter consisting of just three states, New Jersey, New York, and Pennsylvania.

Prices in the region increased 0.7% month over month, which represents a year-over-year rise of just 3.3%. That’s substantially lower than the nationwide YOY figure of 5%. As for optical, 4 out of 10 eyecare professionals surveyed (41%) expect YOY sales to land 11% to 20% below 2019 pre-pandemic levels. And less than 10% of ECPs in the region (7%) say it’s too early to tell when business will fully rebound. That’s in line with other regions, where, on average, 9% of ECPs say they don’t know.

➤ Price Points. Only 5% of ECPs in the Northeast don’t plan to change the original frames purchasing plan they created for the year. That compares with 8% nationwide, and only ECPs in the South have less intention of modifying their plans than do those in the Northeast.

➤ Frame Buying. The Northeast is right in line with national numbers re: material mix, with 34% saying patients prefer plastic and 31% citing metal. When it comes to frame pricing, however, substantially fewer ECPs in the region report no change than their peers (24% in the Northeast vs. 35% nationwide).

➤ Specialty Product. In terms of spectacle lenses, practices in the Northeast sell a higher percentage of both high index and Trivex than do those in most other regions. ECPs in the Northeast also sell a slightly higher percentage of children’s eyewear as well as both sports and fashion sunwear than do their peers in other parts of the country.

➤ The Web. Northeastern ECPs sell substantially more sunwear, both plano and Rx, online than do those in other regions. Nearly 9 out of 10 (more than all their counterparts except those in the South) also report plans to sell online within the next two years if they are not doing so already. Not surprisingly, this region’s ECPs are more likely than their peers to post to social media daily.

The West

How Western ECPs are rebuilding business as Covid loosens its reins on the region’s economy.

Living large. Whether referring to the region’s geographic sprawl or its economy, the Western area of the U.S. is doing just that.

In fact, based on gross domestic product (GDP), the state of California alone is among the 10 biggest economies in the world.

But, like other business sectors in the West, the optical arena has been hard hit by the pandemic—even more so than most other U.S. regions. In fact, almost 50% of the EB Market Trends survey respondents in the West say they expect 2021 business to be down by 11% to 20% vs. 2019 levels pre-pandemic. And, a full 52% don’t expect a full rebound to their business until the third quarter of 2021 or into 2022.

Still, throughout the Covid crisis, eyecare professionals in the West have definitely kept in touch with patients. In fact, 73% of them, versus only 53% of ECPs nationwide, have communicated with patients via email during Covid. When it comes to scheduling, they are also seeing more patients per hour than their counterparts in other regions.

As for product, Western ECPs prescribe more polycarbonate and sell way more AR than their counterparts. Whatever the product, they are, however, substantially less likely to sell it online. In fact, 61% of ECPs practicing in the West don’t sell anything online vs. only 18% of their peers nationwide.

UNEMPLOYMENT

A jobless rate of 7.1% in April is less than half of what it was a year earlier (14.5% in May 2020). Nonetheless, according to the Bureau of Labor Statistics, the Western region is home to the three states that now top the nation’s unemployment leaderboard: Hawaii, California, and New Mexico. Nevada, a contender for the top jobless spot for several months, actually saw the nation’s biggest year-over-year decline in unemployment rate in April, from 29.5% in 2020 to 8.0% this April.

IN FOCUS

When it comes to overall spending, the West saw May prices rise 0.8% month over month and up 4.7% from a year earlier, according to the consumer price index. That represents the steepest rise since August 2008.

As for optical, nearly half the eyecare professionals surveyed (48%) expect year-over-year sales to land 11% to 20% below 2019 pre-pandemic levels. And more than a quarter (26%) say it’s too early to tell when business will fully rebound. That’s way more uncertainty than in other regions, where, on average, 9% of ECPs say they just don’t know.

➤ Price Points. More ECPs in the West (17% vs. 8% nationwide) have no plans to limit or change their original buying plans for frames for the year.

➤ Frame Buying. “Just one word: plastics.” That phrase from a ‘60s classic film, “The Graduate,” applies to Western ECPs, as well. Nearly 6 out of 10 (57%) prefer plastic frames over metal or combo materials. That’s way more than their peers in other regions, where the average is 34% plastic preference.

➤ Specialty Product. As for their fastest-growing specialty area, 43% of eyecare professionals in the West point to computer eyewear. That’s more than three times the number of ECPs in other regions, the vast majority of whom name children’s eyewear as No. 1.

➤ The Web. ECPs in the West are the least likely in the country to either currently be selling or planning to sell online. Nearly 4 out of 10 (39%) say they don’t expect to do so within the next two years. Though they stood out as top email communicators during the pandemic, fully 26% don’t post on social media at all. That’s three times fewer “posters” than the national average of 8%.

The South

An in-depth look at how Southern ECPs are focusing on their practices and profits as the Covid crisis loosens its hold.

Diversity definitely defines much of the South. In fact, Houston and Dallas are two of the three most diverse big-city populations in the country, according to wallethub.com .

Homing in on optical, how are ECPs in the South doing compared with those in the nation’s other regions?

For one, they’re definitely more optimistic. In fact, more ECPs in the South (32%) than their counterparts elsewhere (21% nationwide) expect to experience a full return to pre-Covid 2019 business levels by the second quarter of this year.

When it comes to scheduling, offices in the South are most likely to book appointments one hour apart—not more, not less. They’re also more likely than their counterparts around the country to reduce frame purchases in 2021 by half as a result of the Covid-19 pandemic. Nearly half (44%) have expanded their offerings by bringing in lower-priced product.

UNEMPLOYMENT

According to the Bureau of Labor Statistics, the jobless rate in the South region is 5.4% as of April 30. That’s down from 12.1% last May. One Southern state, Virginia, saw the nation’s third-largest month-over-month unemployment rate decrease.

IN FOCUS

What about prices in the South? Year over year, the consumer price index increased over the 12 months through April 2021 by 4.2% and in May by 5.6%. April’s number represents the biggest YOY increase since September 2008, when the CPI rose 4.9%.

Where optical goods and services are concerned, here’s how Southern ECPs are defining their practices.

➤ Price Points. Nearly half of Southern ECPs (44%) have expanded their frame offerings through the addition of lower-priced product.

➤ Frame Buying. In terms of materials, in the South, frames at all price points are more likely to be metal or memory metal than those sold in other regions.

➤ Specialty Product. Asked to indicate their fastest-growing specialty category, just over half (51%) of ECPs in the South answered children’s eyewear. That’s more than double the number in any other region.

➤ The Web. When it comes to social media, Southern ECPs are more likely to post a few times per day than their peers in other regions (34% in the South vs. 30% nationwide). They’re not afraid to sell online either. In fact, more ECPs there sell prescription eyewear as well as contact lenses online than do their cohorts in other corners of the country. And among those not currently selling online, a resounding 93% say they will do so within two years.

The Midwest

A bird’s-eye view of how ECPs in the heartland are rebuilding their practices and profits in the aftermath of the Covid crisis.

How’s business in the nation’s breadbasket? Two of the region’s states—Nebraska and South Dakota—tied for the nation’s lowest rate of unemployment (2.8%) as of April 30.

More bragging rights? Fewer than 10% of ECPs in the other three census regions have reported no ongoing negative financial impact on business compared with pre-Covid 2019 numbers. Double that of other regions, fully 20% of respondents from Middle America report no lasting impact. And, at 22%, more Midwestern eyecare professionals report already experiencing a full rebound in business than those in other parts of the country.

When it comes to communications, however, fewer Midwestern ECPs messaged patients about Covid-19 during the outbreak than their peers, and they have also been less likely than ECPs in other regions to offer telehealth either during the pandemic or moving forward. On the other hand, more survey respondents in the heartland have offered curbside pickup and/or home delivery than their counterparts in other areas.

UNEMPLOYMENT

The Bureau of Labor Statistics pegs the jobless rate in the Midwest region at 4.7% as of April 30. That’s less than a third of the region’s 15.4% unemployment rate exactly one year earlier. See listing to the left for the states with the highest and lowest unemployment rates as of April 30, 2021.

IN FOCUS

According to the U.S. Bureau of Labor Statistics, prices in the Midwest, as gauged by the consumer price index, rose 1% in May from a month earlier and 5.6% YOY. When it comes to purchasing optical product, what and how do eyecare professionals in the Midwest region buy?

➤ Price Points. While nearly half (46%) of Rust Belt ECPs have not changed their frame pricing and inventory mix in the past 12 months, another 23% report having added lower-price-point product into their practice.

➤ Frame Buying. More than twice as many Midwestern ECPs (16%) plan to keep their original 2021 frame buying plan than do their peers nationwide (only 8%).

➤ Specialty Product. Asked to indicate their fastest-growing specialty category, 25% of eyecare professionals in the breadbasket pick children’s eyewear, 21% say computer glasses, and 17% indicate Rx sunwear.

➤ The Web. When it comes to messaging about their products and practices, most Midwestern ECPs post less frequently on social media than their cohorts in other regions. While they are bigger Facebook users than ECPs in the other three regions, only 37% sell eyewear online vs. 43% of ECPs nationwide.