2011 is predicted to be another difficult trading year according to several optical retail group organisations in New Zealand, when asked how optics would fare over the course of the coming year.
Weak sales figures in the run-up to Christmas are being seen as an indication that retailers face more tough times, even if this year turns out to be better than last.
A common opinion among those interviewed by NZ Optics was that they are pleased that 2010 is behind them and they feel optimistic about 2011 as confidence starts to return to the market, although consumers will continue to be cautious in their spending.
“It’s widely recognised that 2010 was a tough year for NZ retail generally and economic recovery will be a slow process. Optical, like all retailers, certainly felt the flow on effect from households tightening their belts,” said Chris Beer, CEO Luxottica Asia Pacific, South Africa and China.
“As confidence starts to return I am cautiously optimistic about 2011, and we do expect growth in our NZ businesses.
“Customers are being pretty discerning with how they spend their dollars. We’re seeing a move back to quality in both lenses and frames, with global designer brands becoming more of a focus, and, not surprisingly, people are looking for great service as well as value in their purchases.”
Chris Clark from EyePro said he’s ‘cautiously’ confident that a degree of stability will return to the industry in 2011.
“Growth, if any, will be slow but fingers crossed there will be no further downslide. We need to work on strategies to get the optical spend higher up the shopping list. There’s no doubt that price deals have grabbed the attention of many consumers and there is an increasing expectation of being offered something special. This doesn’t necessarily mean price though, and consumers haven’t taken long to work out that you get what you pay for. Quality is the key for the future,” he said.
Pete Campbell of Visique supports the view of many economic commentators when predicting this year will be a slow ride back.
“I feel it will be another year of cautious consumer spending and they will be very much focussed on debt reduction. 2010 was a tough year, particularly the back end of the year, and I’d like to be optimistic but I feel 2011 is likely to bring little change.
“In my opinion, in tough economic times the consumer becomes much more value (quality v’s price) conscious, price is unlikely to be a sole factor in the purchase decision. This applies to all sectors, not just optical,” he said.
Contrary to what others experienced in 2010, Specsavers report that they had an extraordinary year and are predicting significant double digit growth for their practices in 2011.
“Kiwi’s are appreciating that professional eye care together with affordable fashion doesn’t need to cost a fortune,” said Graeme Edmond, managing director.
“For 2011 we see the NZ public continuing to embrace high quality service and strong value. We look forward to the year ahead with confidence as we believe 2011 will shape up to be a strong year for the optical industry in NZ.”
In 2011, said Greg Nel on behalf of the Cornea & Contact Lens Society, internet sales of contact lenses will remain a challenge for practitioners but most now have ways of safe guarding this part of their business.
“The fact that contact lenses are available online, and that this is a successful business model, is a sign of how ubiquitous good contact lens design and material technology is; so sophisticated that they have become a commodity.
“Online contact lens purchases can probably no longer really be considered a ‘threat’ because most practices have adopted defensive strategies. However, the game has changed. At the very least, there are very few patients that are not aware that their optometrist disapproves of them buying their lenses online.
“Some practices have an online site in a ‘if you can’t beat them...’ approach, as all the corporates do. Many contact lens practitioners have improved their communication and systems; placing less onus on patient diligence as far as re-order cycles are concerned. The improved patient education and practice management systems that this implies has to have a positive long term affect on compliance, the cancer of contact lens wear.
“I suspect that the result is that the numbers of contact lens wearers buying lenses online has about topped out. NZ is a pretty static market,” he said.
One of the challenges that the NZAO Council sees for optometrists is their ‘chargeout rate’ and the opportunity for billable hours, as well as educating the public on the value of a comprehensive eye exam and what it entails.
“There can be no doubt that it will get harder to provide quality care as the time available per client reduces. Shorter overall time for taking history, talking to the client, completing relevant examinations, synthesizing the available information, reaching a diagnosis and discussing a management plan leads to a reduction in both quality and value.
“The NZAO is committed to advocacy, and education of the public regarding the value of comprehensive eye examinations to reduce the incidence of preventable blindness and also to ensure clear and comfortable vision for every person in NZ. In our quest there will always be a role for individual member optometrists, as they are uniquely placed to inform and educate one on one every client, every day.”
One exciting event New Zealanders can look forward to later in the year is the Rugby World Cup (RWC) which some pundits believe will help lift the economy. An influx of tourists will be helpful but more importantly retailers hope that it will improve sentiment of the population.
“The World Cup is likely to have a positive impact on the NZ economy. With more shoppers around, particularly in regional areas, we do expect to see an increase in sales in both our optical and sunglass ranges, in addition to our usual summer trade,” said Chris Beer.
“I think that the hosting the RWC will definitely lift morale, but it’s questionable whether it will stimulate spending in the retail sector,” said Pete Campbell.