Lux and the Independent

[Chris Ryser]

fletch said:
If US Shoe owned Lenscrafter and was buying cole what would be different?

They make shoes and not optical frames

fletch said:
In 10 years of Lux owning Lenscrafters what have they done to try to put you out of business that Us Shoe would not have done!

They actually manufacture and supply the frames sold in their and also obviously in your store

fletch said:
All I ever hear is don't buy from them they are going to put you out of business! You don't buy from the competition! Etc. I have yet to see the damage in 10 years!

By buying selling their product you create earnings for them, which will be used to enlarge their share of the retail market

[fletch]

Chris!

I still don't understand your first two points! How is anything different for my business!


On your last point! Do you think that Lux takes its profits form wholesale and send it to the retail division!

I do think that the money they make form me they use to buy up other companies like Cole! And if they do buy Cole and raise prices and close some stores that is fine by me!

I would agree with everyone if Luxottica raises frame prices to me and lowered them in their retail shop! In fact they have lowered prices in many lines that I buy and raised them in their stores!

Essilor is much like Luxottica. They are buying up every lab in site! As long a they don't raise prices to me and I don't see their product much cheaper in other retailers I really don't care!

[sjthielen]

Run your business like a chain and you will be competing for patients that look for that kind of product and service. Run your practice like a specialist in eyecare and that is the patient you will attract. Luxottica can move enough product through Its new stores so they could care less if Independents purchase any product through them. I just like doing business with companies that truly need and want my business. It makes for a better relationship for both of us.

[Joann Raytar]

sjthielen said:
Run your business like a chain and you will be competing for patients that look for that kind of product and service. Run your practice like a specialist in eyecare and that is the patient you will attract.

That's a statement I agree with 100%. While we will match a coupon if it's reasonable and the patient brings it up, we don't set out to compete with the chains. This may be easier for us since the closest chain to one of our two stores is a good 30+ miles round trip. Our nearest competitor is another professional practice which prices high so we don't really worry about them too much. Our patients usually don't want to bother driving down the road to the other shop let alone a roadtrip to the mall. I guess we got lucky with our location.

[Johns]

Fletch,

US Shoe would be a totaly different situation because they are not selling any product to YOU ! Yes, they would still be competetion, but your dollars would not be in their pockets, so they would have more $$ to buy more stores to compete against you (even more).

Use Shoe = Manufactured (kind of) shoes
Lux = Manufactures (for sure) eyeglasses.

[fletch]

Johns,

I would agree if they open more in more new stores and not just in malls.

They are now buying stores that are already there!

They bought a small chain in my area a few years back! Before they bought the chain it was a low price 2 for 99 shop! Now a few are Lenscrafters but most closed!

THe chain market is so over saturated! That is why most of then post loss after loss! I still can't figure out how some of them stay in business! If they keep buying up stores and closing some down is that bad!

I

[For-Life]

I keep having to say this, but I guess I will have to repeat it again.

I do not "compete" with Lenscrafters, Sears, Pearle, ect. Yet they are the competition. Actually, we do not have a Lenscrafters, Pearle, or Sunglass Hut here, but we do have a Sears. However, just because we do not have those places doesn't mean that I still do not have to protect myself. Therefore, our store, for a whole, has not bought from Lux.

You can tell me that it will have no effect and that if I set myself apart there will be no problem, but here are a few things to ponder.

1. We have all lost customers to the chains, whether it is one customer or a lot. You still never want to lose even one client.

2. What happens if Luxottica develops a store that will be on competition with the independent stores. How many independent dispenseries do you have in your town including OD's and Opticians? Don't you think that Lux would like that market share to belong to its dispenseries? Of course they do. So they might not compete with us now, but if we keep on giving them money they might decide to do something with it. If Lux gains a significant profit, where do you think that profit will go? You can only give a certain amount of dividends. So they will put it into their research and development, probably into acquasitions or developing a new product. I doubt that new product will be frames. I can see Lux ten years from now building a new franchise of operation that can really hurt the independent stores.

3. How much longer do you think the independent stores will stay on top? Almost everything now-a-days is being taken over by the large chains, and only a few independent stores are left. Take shoes for instance. Even fifteen years ago we could still find indy shoe stores with trained professionals. Now it is all young kids, making minimum wage, selling for a chain.

We can sit here with our eyes closed, but the future is uncertain and we have to protect ourselves against that.

[Joann Raytar]

I hope no one takes offense at this but here goes ...

If we all put as much energy in securing Opticianry as a profession through education and legislation as we do worrying about what the chains are doing, perhaps we wouldn't have so much to worry about.


The big players aren't going anywhere for awhile. They are apparently very organized judging by many of our conversations. Why aren't we all putting more effort into making sure we get more organized so we have sticking power as well.

I'll stop now because I don't want to get too off topic but I had to say it.

Thanks folks. :)

[fletch]

This is like Ping-Pong

15 years ago I heard other opticians saying that independents will go the way of the independent pharmacy. I think it will take a very long time for this to happen to us if at all. This field is part fashion part medical. I go buy sneakers and fill my rx at the closest place.. When it comes to doctors or dentist I ask around to find a good one.

I try to think positive about our field. Staying on top of all the latest products. This is also why I like Optiboard. It's a great place to learn and get help from my competition!

[Joann Raytar]

Live Eyewear said:
as my company derives 90% of it's revenue from servicing the independents, and actually keeping our products away from non-independent eyecare professionals, it makes me wonder if I fight for a cause that is not actively supported by independent eyecare professionals? So, if you are an indpendent, and would not mind, please answer this question?

I think you are supported by independents. Take Varilux for example. Yes, most of the chains can get Varilux and Essilor is a big company but I would bet a very large number of independents, if not most, fit Varilux. While we don't fit Varilux exclusively, they are our "go to" progressives. Chains tend not to fit Varilux as a core progressive and most of Essilor's Varilux marketing is geared toward independents. Loyalty does count for something even on a manufacturing and distribution level.

[For-Life]

Jo said:
I hope no one takes offense at this but here goes ...

If we all put as much energy in securing Opticianry as a profession through education and legislation as we do worrying about what the chains are doing, perhaps we wouldn't have so much to worry about.


The big players aren't going anywhere for awhile. They are apparently very organized judging by many of our conversations. Why aren't we all putting more effort into making sure we get more organized so we have sticking power as well.

I'll stop now because I don't want to get too off topic but I had to say it.

Thanks folks. :)

You are right. I mean, competing with the chains is not one of my main priorities. My main priorities are developing my market, product, and education level, gaining new clientele, keeping my current clientele, making our office more efficient, and keeping an eye out for the future.

But it is like playing Monopoly. I am not talking about playing with two people, but with seven or eight people (even a better example if you look at the computer version). What happens is that everyone gets their stake, in the computer version they will get their stake, try to trade, and just walk around the board (as many stores do, with the exception of trading). Eventually a smart individual will start to buy other properties. If they do not buy others properties people will just keep on walking around the board and do nothing but pay and take rent from everyone. The person starts buying the places that can bring in the biggest cash flow. From that cash they will buy properties where they can build hotels. Eventually someone lands on a hotel run property and is bankrupt, we then get their assets. Eventually you build a larger and larger portfolio by doing these things until nobody can go anywhere without paying you the huge bucks.

It can be the same with the optical industry. There is a lot of market share out there and all it takes it someone with enough motivation, brains, and money to make major changes. It started with Lenscrafters, as Lux got their name into the chain market. Then it went to Sunglass Hut, now they have a huge sunglass store, now it is Cole. I can tell you, Sears and Pearle were not run very efficiently and now they will be. Who is next? Unless if they start buying independent stores, like me, the future is uncertain. As long as their is market share, they will want a piece. It will take time to do so, but why not.

On top of that, I do not see any reasons why I need Lux in my store. So if I can dictate to them these rules, then I will.

[varmint]

While we are looking at the small scale, maybe Lux is planning to buy Sears, Roebuck & Co. Who needs optical?

[Chris Ryser]

Jo said:
I hope no one takes offense at this but here goes ...

The big players aren't going anywhere for awhile. They are apparently very organized judging by many of our conversations. Why aren't we all putting more effort into making sure we get more organized so we have sticking power as well.

Thanks folks. :)

A very valuable point. Thanks

[mitchellvision]

I think that the part of this that is not being discussed is that Lux also obtained Cole Managed Care. When that is merged with EyeMed the push for monopoly begins. I talked to a doctor the other day that told me that they filed only 13 claims last month with Eye Med and had to buy $1300 of Lux product. That was 15 frames. Out of the 13 claims they sold 5 glasses. They are now plus 10 in their frame inventory. Do that every month and by year end you are plu 120. Soon your entire office is Lux product and you can't buy from another vendor. Go to a LensCreaftrer store and see that they dispense 99.9% Lux product. Doing the same at Sears and Pearle's 2200 oultets increases Lux sales to those offices buy about $17,600,000. Should be able to make up the purchase price in no time. Lux's objective is to sell frames and they will do whatever to do so. Some are complacent about this because it is only frames. If they buy an optical lens and contact lens company and tell us that we now have to sell only those, is it still okay? I like to take care of my customers and sell them the best and have Lux in the past. But it is reality check time. We are indeed fueling future acquistions when we buy and dispense Lux products.

[fletch]

mitchell,


Does that doctor keep the Luxottica product in a box and only use them for Eyemed?

I hate managed care but every year more and more people get some kind of managed care. If you are a private Optician many plans like VSP you can't get. If I could not sell Luxottica frames I would have a problem with it. Also many of the Eyemed contracts are discount plans and you file no claim. I have not yet bought more frames than I wanted! I also believe that there is a cap on dollars! We have one PT OD that takes Vision One. I hate it because he sees the patient and then they have to go to a Cole store for the frame! I hope they turn the plan into Eyemed and I could sell them a frame! Time will tell! (Some patients do give up the cole plan and buy a frame from us anyway) IF I was busy with private pay all day I would get rid of all plans.

[eyewatch]

The spin doctors are doing a fantastic job of persuading customers to "wait and see", oh it didn't matter that they purchased Lens Crafters 10 years ago...10 years ago I made more money than I do today...WHY? Because there wasn't this issue of hiring opticians at a reduced cost, Lux was just starting this debacle.
So I ask: IF the managed vision care lives were adequately handled previously by Cole/Pearle, what makes them think that they will now be sending them FROM their own locations to the independents? How does LUX benefit from having patients seen by an independent, when they are giving deeper discounts to the provider panels and selling them an item that will generate a small margin, when placed on a patients in comparison to selling them through their own opticals. If the picture is not clear, they now have access to records to show the number of managed vision care claims processed.
Tell me how am I to make payroll if the managed care programs recommend the Lux group or worse, what happens now that they can deeply discount the plans to make it impossible for me to continue to do business with the insurance plans.
I am going to find it difficult to compete in my market area, which can be targeted for expansion by my using the product
I cannot use the product and will not provide any additional information to them to help put me out of business
Don't be a schmuck, BIG BROTHER LUX is watching these sites, manipulating the input and comments...
There are many lux employees assigned to these sights to monitor your opinion.

[Joann Raytar]

eyewatch said:

Don't be a schmuck, BIG BROTHER LUX is watching these sites, manipulating the input and comments...
There are many lux employees assigned to these sights to monitor your opinion.

Monitoring, maybe; manipulating, no. Hopefully, those who work for any company or its subsidiaries being discussed on OptiBoard disclose their ties. Up to now, it appears that most either do or get called on their possible affiliation by savy members. Those OptiBoarders who have been members for years know what's up. Also, if you are familiar with the this site's Administrator's feelings on the matter, you would know that Steve wouldn't allow any undisclosed conflicts of interest to go unmentioned. (That is if he knew about it.)

[hcjilson]

paranoia in the air! If anyone thinks a company of the size of Luxottica, with the market share of Luxottica, would assign employess to monitor Optiboard- they really have no conception of what goes on in larger companies. If anyone thinks that the opinons of 2500 people can sway a company with 25 times those outlets in the US alone- it is indeed time for them to smell the coffee.

Get real folks. Luxottica is going in its OWN direction- without regard to us. Its time we did the same.

hj

I seriously wonder why anyone would have done better 10 years ago and is still at it today. I've heard of diminishing returns but that takes the cake. If things are that bad why is one still at it, when one could have joined the oposition and been part of the gravy train. If anyone really thinks its a gravy train, they should talk to one of the competitors employees.

[Live Eyewear]

My point is that the focus of the independent practioner should be on themselves, not Lux. Lux is a very dynamic and multi-faceted company that has taken a dominant role in almost every aspect of the supply chain... from manufacturing to wholesaling right through to retail.

They have an impressive arsenal of products, and I personally think they make some of the best eyewear in the world.

The independent should take a step back and look at the marketplace and develop a strategy. Not a strategy to just survive, but a strategy to prosper. The fact that Lux may now acquire another major retail chain is a fantastic opportunity for independents to differentitate their product line and their service to the public. More Lux stores means more Lux product is readily available. It makes it even easier for an indpendent to shine.

A little strategy on product selection can go a long, long way. Since the announcement of the Cole - Lux deal, I have heard some very positive comments from some of America's most succesful independents on how this is great for them, as it is going to be easier to compete with a Lux supplied Cole, rather than a indpendent Cole.

[Joann Raytar]

You have made a couple of great points.

You have the benefit of offering a product that is unique when it comes down to it. Your lines look noticably different from other products in your niche.

In our situation, we have a number of major frame lines in our office. We are maxed out as far as having any space to bring in anything new, so to bring in another vendor would involve selling off lines. We have had to do that on occassion but picking up another line from an existing vendor is relatively easy. Most will just do an exchange.

We recently brought in Cottet but had to drop an existing line to do it. If you don't know the rep or the company, this can be a big risk. We come closer to the fine line on losing volume discounts from existing vendors. Is there something that smaller frame companies can do to make that kind of decision easier?

[Live Eyewear]

In truth, I don't think there is much you can do to make it "easier". Running a business these days, is not often too easy. But if a strategy is in place, and implemented, over time, you will position your business so that it is self sufficient and not adversely effected by any one supplier.

For example, what percentage of people do you think buy frames becaasue of the brand name? Many retailers seem to think it is important. 2003 VCA stats report that consumers who purchase a frame becasue of brand equate to about 1% of shoppers.

Comfort and Fit dominate as influencing consumer buying decisions (41%), followed closely by style / how they look on (33%). Recomendations from friends, doctors and even sales staff only equate to 1% of the reason people buy a particular frame.

So, even if all of your board space was changed to absolute non name product... if the quality was as good, the fit and style as good, would you hurt your business? Maybe, maybe not.

But I can assure you that if your strategy is to build a strong business that is never influenced by a supplier, i.e. threatening to increase your price if you want to drop one of their lines (because of volume), then tell them goodbye.

One of two things will happen.... they'll reneg on the threat or they will lose your business all together. Either way, your business has gained the upper hand, and even if you lose a stable of brands that you thought were important, you'll soon discover there are litterally hundereds of companies that make as good, if not a better product.

Consumers who refuse to buy a frame that doesn't say "Chanel" are so few in number, that it's almost immeasurable. Show them the exact same quality and design by a smaller design house, and they will buy it.

[opticman]

In respopnse to all the fears the independent opticians or optometrists have with Luxottica taking over "The Optical World", I reply that if you let your fears take over your senses then you will lose to them. I was employed by Lenscrafters and was considered by them, a seasoned, knowledgeable optician. I was a store manager, but also was relied upon for training optical theory. You all should relax as to Lenscrafters ever being a tower of quality dispensing. The manner in which they would troubleshoot a customers problem was to remake it (a very dirty word to Lenscrafter field managers) and hope in some manner the problem would somehow go away. If not, they would refund the customer their money. New lens products are not offered and if a Varilux lens is used, the customer is charged an additional $100.00 over the price of their regular stock progressive making the lens very expensive. I am sure they will run all the stores that are taken over the same as they run Lenscrafters. Have you noticed that One Hour Service is no longer what they advertise. A custmer is now asked when they want the job delivered. Obviously, the one hour speed limit caused to many quality and remake issues and most customers are not interested in fast as they are correct.

I can understand the fears many of you have with the possibility of Luxottca having all these locations. The experence I had working for them gave me these observations.

1. They do not sell newer progressive designs. therefore you can offer New Technology.
2 . Associate turnover rate is 70% or better. Treat your staff with respect and it will come back many fold.
3. Keep you and your staff informed of new technolgy and your continuing education credits.
4. Perform truly great professional and knowldgeable customer service.

Presently, I am in a professional practice that caters to high end eyewear buyers. We attract all eyewear shoppers because of the eyewear selection we offer. We take no third party, managed care etc. and we are growing. We offer a !5% discount to those that ask if we take their plan and most will purchase from us because of our style and reputaion of QUALITY eyewear. We are selling to those who have been disappointed with the poor quality and high price they paid at the chains. Many want the new technolgy in the product we offer. The fact that the nearby Lenscrafters disappoints their customers is why they are driven to your business.

Luxottica will have more outlets to sell their frames. OK, don't sell their frames. Take in other brands. There are many other brands. OK, now you are not supporting the competition. Now you have to compete with the competition and the way you do that is with great product, great service and true honesty in your business practices.

Please understand that I am not bitter against Lenscrafters or Luxottica. I learned many things while I was employed by them and it has helped me grow the business that I am in now.

[harry888]

I don't want to be a test market for the competition.

I don't carry Luxottica because I don't want the competition to know what sells well in this area. Let them use their own frameboard space.

this is the imformation age, data is often more valuable than money.

Harry

[mitchellvision]

Fletch,

No the doc doesn't keep the frames in a box and use only for EyeMed. The point I was trying to make is that 5 frames were dispensed and 15 frames HAD to be purchased because of their contract. I hear this from a lot of docs, not just one. I gave that one as an example. I successfully managed several optical stores and understand inventory. I don't want to HAVE to buy 15 frames for every 5 I sell. It could have been better or it could have been worse. The point is that there are only so much inventory dollars and if they are being controlled by one vendor soon that vendor will have all the inventory.

[mitchellvision]

Opticman,

I too was with LensCrafters. At one of the GM Conferences my store won the Best of the Best Award in training. I had a well trained staff with about 90% ABO certified opticians. Had customers that were dispensed glasses from all walks come to us to have problems fixed. Had the highest CSats in the region. Business was booming. Loved the company until it changed with the purchase by Lux. Morale was not existant after that. I am a frame rep now and call on a lot of offices. Most of which have staff that are in desparate need of training. I usually cringe at the level of service and lack of knowledge. Before this I was a Franchise Manager with a statewide group of 100+ offices and saw the same thing while visiting them. Most of these are profitable and growing. Why? Cause they are convenient and accept the vision plans of the people that live and work around them. All have over 80% of their business in managed care. If that managed care portion of their business tells them that they have to buy from one frame company...well, I think we know where this is going.