The Association of Contact Lens Manufacturers cannot insulate any individual or business from the realities of internet trading, but we do provide the tools, programmes and promotions to help practitioners compete effectively - and many already do so very successfully.
UK contact lens manufacturers have no leverage whatsoever over the prices and margins set by distributors and retailers within just this country, let alone worldwide.
On the contrary, they compete with one another over price and innovation for the opportunity to supply individual practitioners. The 'uneven playing field' has arisen through the advent of the internet itself and affects virtually every part of the high street.
The ACLM has just completed its annual review of manufacturing statistics. From comparing these with the table of prices in optician (May 6), the following points are apparent:
- For daily disposable lenses, ACLM members' average price is lower than all 15 individual internet companies' minimum prices.
- For silicone hydrogel lenses, ACLM members' average price is lower than the average of all internet minimum prices and below over 60 per cent of individual minimum prices. Of the remainder, half are from US-based suppliers whose import taxes have not been taken into account. Of the UK suppliers, the average difference in price (compared with the ACLM average price) is just over 10 per cent.
- What are 'average' prices anyway? The difference between internet traders themselves can be as much as a staggering 289 per cent for a pair of silicone hydrogels (£12.91 down to £4.47), and the assumption of 'average' is that each internet trader is selling the same volume of lenses. This is simply nonsense - they have strategies to promote one or another type of product just like any other retailer with discounts, special offers, and so on.
- The Optician report suggests that cost price has risen nearly 6 per cent in the last year. In fact, the latest ACLM statistics indicate that the 'factory gate' cost of daily disposables has dropped by 4 per cent, and that of silicone hydrogels has dropped by 36 per cent. These compare very favourably with the reported internet price drop of up to 2.6 per cent.
- No actual purchases were made by the researchers, so there is no feeling for the quality of service, speed of delivery, hidden costs, guarantees, complaint handling procedures and so on for the internet suppliers.
Just as it did last year, the report raises some important issues for practitioners and which the ACLM has been promoting for some time:
- As a top priority, add value to your offerings so that there is little incentive for your patients to move away. Time and again research shows that price is not the determining factor in a person's purchase decision: quality, service, confidence and reliability are more significant. Because they require more patient chair time, used effectively, contact lenses are the best way to build patient loyalty. Independents really can compete against the multiples if they treat every patient in the right way.
- Don't load business costs on to the selling price of products - and charge separately for professional time. This is the only way to avoid the accusation of 'rip-off' trading in spectacles or contact lenses when your patients are comparing prices.
- Establish a closer relationship with your chosen manufacturer(s) so you can face the competition together. Remember that manufacturers are in strong competition with one another over price and performance, and they certainly do not act in unison to 'squeeze' any particular group of practitioners. Choose manufacturers whose prices match your own strategy and work with them to develop this against your competitors.
- Remember that a far higher proportion of your patients are likely to be contact lens drop-outs (although this is reducing with the ground-breaking advances in technology and the advent of new materials and techniques) rather than lost to the internet (2 per cent). Don't allow your patients to drift away. Find out why they are not returning to you for regular appointments.
The best advice to practitioners is to put the 2 per cent internet share of the market into perspective. This figure will probably rise over time, but it is not 'out of control' or a 'price war' as reported last week in optician. Be confident in your own professional abilities, and then develop a loyalty in your patients in the way that successful practitioners already do.
Of course it is not easy because the UK is a very competitive marketplace, but there is plenty of excellent business advice available to practitioners from a wide range of sources - and the ACLM will continue to help you make best use of it.
Mintel has estimated that the UK contact lens industry will grow by 38 per cent in value over the next five years. You really must plan ahead to seize a share of that growth for your own business, and not keep looking over your shoulder to let others take it from you.
Simon Rodwell
Secretary general, ACLM