Optometric Management Tip # 186   -   Wednesday, August 10, 2005
Competing With Optical Chains

I’m clearly aware that eye care professionals who work in all modes of practice read this newsletter. That includes the three Os in every setting, from private practice to educational institutions to military clinics to optical boutiques to discount super-stores to retail optical chains. I have no bias toward a practitioner in any of these settings and I value that entire readership very highly. The eye care marketplace is broad and variable, and there is a need for various categories of service at various price ranges. Excellent clinical care can be delivered in a retail store and sub-par care can be delivered in a private office.

So why would I write an article that would seem to help professional practices compete with retail chains? Because it seems to me that the private ODs need the help. I may write a future article addressed to retail opticals on how to compete with private practice doctors – but they seem to already have a good handle on that! The difference springs from the fact that we are looking at business strategies, and retail chains are generally good at business. They typically have full time, well-trained business executives in the organization. They may have marketing and human resource departments. They were developed as a business from the ground up. The typical private optometric practice, on the other hand, has a doctor at the helm who spends at least 80% of his or her time examining and treating patients. These doctors have no training in business and often very little interest in it.

Focus Group Study

A major corporate supplier in the eye care industry recently conducted a series of consumer focus groups to study the buying habits of patients. This study provided lots of enlightening data, including what consumers consider to be the competitive advantages of optical chain stores. These perceived advantages were: I would have to agree that optical chains make a strong showing in these areas; the data is believable. The consumers also perceived some competitive advantages for the private practice docs, such as personalized care and continuity of care. But let’s take a closer look at the competitive advantages of optical chains and see if private docs can compete in those areas.

Marketing and Merchandising

Yes – private practitioners can compete here if they want to. The marketing goals may be different, since one company may want to focus more on retail fashion and the other on medical care, but let’s look at the optical departments only. Private doctors could put more time, talent and resources into their optical displays. Starting with the display units and furniture and continuing to the use of props and designer logo materials, private practice opticals can be made to look as hip as a high-end department store.

Product Selection

Yes – private practitioners can compete here if they want to. I take product selection to mean choices. Consumers love choices of frame styles, lens features, and even contact lenses. The most visible of these three main product lines are frames. Private docs can have a large frame inventory in a large floor space. It would involve a larger financial investment in inventory and it might even require a larger facility, but it can be done.

Convenience

Yes – private practitioners can compete here if they want to. Convenience covers a lot of ground. One aspect could certainly be office hours, and another might be parking and ease of access. The typical private practice can easily lose in a comparison of these factors. Instead of the relatively irregular hours that many offices are open, chain stores are open during normal business hours, and much more. Consumers today have busy schedules and they reward businesses that meet their needs. Private docs could be open every day from 9 to 5 plus some evenings plus Saturdays. Sure, it would take a bigger staff, and many staff members and doctors don’t want to work evenings or weekends, but it could be done. The same goes for parking and other conveniences.

Efficiency

Yes – private practitioners can compete here if they want to. This factor seems closely related to convenience, but it may be more directed at an on-time appointment for an exam that doesn’t take too long and glasses and contacts that are made and dispensed quickly, without hassle. Competing here may be as simple as revamping some policies on appointment scheduling and pre-testing delegation, or could be as involved as installing an in-office optical lab and hiring a staff to operate it. Contact lenses can easily be dispensed immediately because everyone has access to trial lenses, but office procedures must be efficient enough to allow it.

Price

This is the one category in which I don’t think private practices should try to compete. We should remember that price is definitely a factor where perception may not be reality. Many optical chains stores in large shopping malls are actually more expensive than private OD dispensaries. But there are also chain optical stores that offer prices so low that private optometrists marvel at how they can do it. My point is that private ODs can price their services and products quite high and still find a receptive market, as long as the service and product quality is also quite high. When you think of service, don’t just think clinical care, but also customer service in the traditional sense. We don’t have to compete on price. Good value means different things to different people, just as we see in other industries. There is a market for Holiday Inns and Ritz-Carltons … gourmet restaurants and fast-food chains.

Private practice doctors can successfully compete in four out of the five competitive advantages cited for chain opticals, if they want to badly enough. Even without the competitive aspect, investing in those four factors results in loyal patients who refer others.


Best wishes for continued success,

Neil B. Gailmard, OD, MBA, FAAO
Chief Optometric Editor, Optometric Management