Prescription for global growth

But his casual dress and laid back style belie a precise knowledge of the optical market, an obsession with branding and a grasp of global buying trends and customer habits. 'I don't have any optometry training, my background has all been on the business side,' says the economics and MBA educated Craig.

Craig has worked at Transitions' parent company PPG since the early 1980s and started with Transitions as the managing director of the Asian business in Singapore in 1999 before moving to become the MD of the European business. In 2006 he moved to Florida as the chief operating officer before taking on the role of president at the beginning of this year.

'As the COO I was running the day-to-day operations minus the financial aspects and technology. I was really focusing on the market segments and the marketing group. In the presidency, I am really focusing on the strategy as well as the execution of that strategy and comprehensively managing the entire business,' he says.

Transitions, the joint venture between PPG and Essilor, has not only set the benchmark for photochromics, but counts most of the world's biggest lenscasters among its clients. It arguably boasts the highest profile of any optical business worldwide thanks to high profile advertising and mainstream sports sponsorship such as the US PGA Golf series. 'If you look at my competencies, relative to others in the role, I have acquired a fair amount of marketing know-how over the last few years. I am creative marketing-wise and we are a marketing company, so that is a key competency of myself. I guess I am financial but also metrics-driven.'

He sees his main role as aligning the organisation to the channel or geographic opportunities that exist for the company - 'looking at organisational behaviour and design as it relates to the organisation', he says.

In taking the helm, Craig has a clear view of what he wants Transitions to achieve. 'We are here to grow the company profitably with double-digit rates and to do that profitably as we migrate to that strategy. We will definitely be over-indexing general ophthalmic growth which, worldwide, is currently 2 to 3 per cent and we are looking at at least three times that growth over the five-year period.'

Craig also has plans for Transitions the product and Transitions the brand. This is essential as the brand's penetration into the public's mind grows.

'I want to make Transitions a more aspirational brand, to have more emotional longevity, right now it's an educational brand. If you look at aspirational brands you have Coca Cola or educational brands are ones like Neutrogena. Where we head now is to add that aspirational element to the brand for consumers and keep it educational for the eye care practitioner.'

Can you roll that out to the ECP and the consumer? 'We are not quite sure yet if you can in both channels but we are working that out.' And with the launch of Transitions VI, Craig believes the right product is in place to do it.

'Consumers want to see better functionality, convenience, comfort and protection. They are not asking for variable tint, they are looking for benefit, they are looking for comfort. Does it protect me, is it convenient, is it comfortable? If it does those three things then by definition they want variable tint.

'We don't preach the variable tint component any more per se, we don't talk about it being faster, darker and so on. We are driving the brand into "what does the brand do for me?". It is much more lifestyle driven.'

Global markets

So what will that mean for markets around the world? 'We are mostly involved in the US, strategically as well as executionally, because it was our first market. We want to continue to grow the US at double digit rates and we still have a lot of runway. We are looking at optimum penetration, but we are still well below what is considered to be the correct purchase intent and we want to replicate the market here with other markets which are similarly scaled like the UK, Australia and New Zealand.'

The US and Australia are the markets with the highest penetration of variable tint lenses and they are running in the high teens or even at 20 per cent. But that is not to say these markets are inherently more suited to photochromics or that markets such as the UK can't be as successful.

'The UK is actually migrating at the same rate as the US, given that it has had a lot less time in the market,' says Craig. 'If you trend the UK growth to the US growth it is trending even faster but we have a 15-year history in the US and about a seven-year history in the UK. The penetration rate is running close to 15 per cent now in the UK so they are migrating pretty fast.'

Purchase intent in the UK for Transitions is 42 per cent and market penetration for photochromics somewhere between 12 and 15 per cent.

He says these figures are being driven on as markets mature. 'Part of that is the emergence of the retail chain environment. Those markets are growing faster than the independent market and they are picking up the category photochromics and really putting a lot of resource behind it.'

He sees this consolidation as crucial to global optical retailing. 'You have to look at some historical trends in developed markets like the US, Australia and New Zealand. Consolidation at key retail is moving globally - Specsavers' migration into Australia, Luxottica into Australia, the US and parts of China. Big brands are trying to scale appropriately where the opportunities are. I think large retailers will continue to take a much larger role in our industry in the next five years. With that comes opportunities as well as concerns.'

Craig has a clear vision of how he wants customers and practitioners to see Transitions. 'It is definitely a lens solutions company. It buys substrate from its customers, we then reprocess that substrate using our proprietary technology and then sell that technology as a lens product back into our customer base, our customer base being direct or lenscasters. We similarly drive brand awareness to the consumer and the trade to drive demand around the category and the brand. It is a similar position to Intel.'

That approach has seen Transitions become the fourth biggest lens player in the world. Thanks to its private status, Craig explains, Transitions is not required to provide more specific numbers about its size and prefers to scale the business in market penetration of the total lens market.

In charting its success Craig says clear lenses have to be his reference point and not other variable tint technologies. 'We measure our share as it relates to clear lenses so we talk about penetration. It is a relatively small category and an untapped category and what we want to do is grow at the expense of clear lenses to provide a portion of the consumer. We are the fastest growing company in the ophthalmic business,' he adds.

Transitions is perhaps unique in its relationships with lenscasters. They are its customers, clients and competitors but Craig insists keeping a good relationships with all of the labs and the lenscasters is achievable and essential.

'There is definitely a different strategy between Essilor, Hoya and Carl Zeiss. They are all customers of ours and we have to align around their strategies and expand their market presence and market share. Carl Zeiss is about leveraging its strong asset base, its brands. Hoya is about becoming efficient and offering the most applicable products, segmentation. Having said that we have to be applicable to what they want to achieve.'

Despite the power of these names Craig says having a single supplier of photochromic technology makes sense.

'What we provide and what we have as an advantage is a technology base which is much better than what any one company has. Transitions is unique proprietary technology and we have a strong brand. We have driven a very strong brand platform across the globe which is tough to compete with and we are spending against that on a mass scale that any one company couldn't match.'

Craig says the progression of market share has been achieved by growing Transitions as a brand and engaging with the consumer. 'We are looking at three metrics. One is financial, the return on sales. Second is growing penetration relative to purchase intent in key markets and third is growing our unaided brand awareness across the platform in our developed markets.' The last metric is currently less than other great brands, he adds.

While aided brand awareness is running at acceptable levels in developed markets like the US, there is plenty of room for growth in unaided awareness. For individual markets in Europe that means growing penetration to the US figure of close to 20 per cent. Having worked in Europe, Craig understands that means taking different approaches in different markets. He hints that for the UK that may mean sooner rather than later. British practitioners will be among the first in Europe to see Transitions VI and months earlier than planned.

Emerging markets

Over the next five years, emerging markets and established ones will both see activity. 'We will focus on the developed market where we are under penetrated where we have a lot of runway left. Even the US market, where penetration is running at between 16 and 19 per cent, purchase intent is still running very high so we will still focus resources there. We will go into Western markets, particularly in Europe, focus on those and then move into emerging markets but very specifically focused. That is the CEMTA region - Central Europe Middle East Turkey and Africa. We will only focus on key markets in that region such as Poland and the Czech Republic.'

With such a complex matrix of factors and territories there are many threats and opportunities. 'Threats are business model changes. If photochromic companies move their products and process into a different area of the value stream because we operate at one level. That is why our brand is so important. Opportunities for us are the combination of moving into adjacent market spaces beyond clear lenses, possibly the sunwear category, possibly in contact lenses, or aligning with other critical technologies such as polarisation.

'We will also migrate from a business perspective and from a supply chain perspective as the market migrates in order to complement their strategies. From a brand point of view there are trade mark issues, as the free-form strategy evolves there are margin issues and we need to make sure that we are aligning but we have a pretty good idea how we are going to do that.'

With so much currency in the brand, growing it and protecting it is essential. Despite prompted awareness around 80 per cent in developed markets such as the US there is work to do on spontaneous recognition. 'If you look at Transitions as a brand we have done a lot of traditional media such as TV advertising and print, plus some degree of PR. However any great consumer brand evolves. In our developed markets we have 80 per cent core brand awareness with the consumer. At that threshold though we want to start focusing on unaided brand awareness, unprompted, which runs at less than 10 per cent.'

Any strong consumer brand runs unaided awareness probably around 50 per cent, he says, so there is a long way to go on this front. To achieve this Transitions will expand beyond traditional media. 'We have a marketing mix modelling here. It's a very quantitative way of approaching how we spend our money. We brought in some expertise from the packaged goods industry which does this every day. They have the resources as well as the skill sets and that model is now telling us that we are currently spending well in the US in our core range but to get a better return you have to spend in other avenues beyond TV. These will give you a higher incremental return.'

He cites investment in PR and co-sponsorships as possible vehicles. 'That is where we are migrating to accelerate the brand to focus on where we are and get a better return.' It's no surprise that Transitions became the sponsor of the PGA tour, one of the leading sporting events in the US.

Again this is a policy that Craig suggests could be exported. 'We are not that sophisticated outside of the US at this point. You could pick a couple of markets in Europe that would have that ability on total brand awareness - like the UK. The total brand awareness in the UK is running at 65 per cent so we would like to get it up around 80 per cent, like it is in the US, before we started doing that type of thing there.'

Raising awareness

In addition to the consumer there is the issue of awareness and activity within the industry and retail optics. If the job of raising awareness within optics has been achieved, why isn't that transferring to the consumer?

'We know that purchase intent is running ahead of conversion. Purchase intent is 50 per cent for Transitions VI and penetration is at 19 per cent, so there's a 30 per cent gap. Either they [consumers] are not asking about the brand or they [ECPs] are unselling it at point of sale or a combination thereof, so we have a lot of work to do at the store level to shore up the interface between the ECP and consumer. A big issue is driving much richer dialogue and content message to the store.'

Solving this issue is about trust, consistent messages and profile, he says. The key is getting the ECP on board so they suggest the product to the consumer. 'The horizon to prescribe any complex add-on to a lens has a direct correlation to time. That to them is return and so they give themselves a certain amount of time to convert a consumer. That means that there may be ECPs who are not prescribing because they think it takes too long or they haven't bought into the idea of the benefits for their customers.'

In both developed and developing markets the job of working with ECPs remains the same. In the UK, he says, that will mean explaining the technology which has been evolved to give end consumer benefits which are not being capitalised to their true extent. 'There's a lot of opportunity. The consumers better understand the benefits of the technology over previous generations of products. I think we want to be truly propagating that message into key constituents to make sure they are reinforcing the fact that the technology and the brand is a valid offering in today's environment.

'What is frustrating is the variability between the optical channels. Penetration runs as high as 75 per cent in some stores down to basically nothing. It's tremendous variability that frustrates us because we don't understand or have that figured out yet.

'There are a lot of reasons for that, one is history, one is experience, one is the retail channels. Some turn over retail staff quickly, typically they may have less engaged retail staff than independent ECPs.

'Education is typically less than in an independent ECP, that is why we have to bring the messages into the stores in a much more sophisticated consistent way. Then it becomes a reliable and representative message.'

Craig clearly has a colossal and complex job to do. But behind all this talk of brands and metrics he has a secret weapon, belief. When asked if he thinks everyone should be prescribed Transitions lenses there is no hesitation. Transitions is a first option for an everyday pair of lenses that is suitable for everyone all year round.

'Probably prior to Transitions VI there were some limitations with the technology but with Transitions VI we are providing all of the key attributes of a lens and more. We don't see why a doctor would not want to prescribe a Transitions lens.'

? Photos courtesy of Gene Shaner