Show & Tell

Australian online optical retailer aims to disrupt market

The IM claims that the business will have a competitive advantage over the existing market because its virtual try-on technology is “already working and can be donstrated” and its App is “nearing completion”.“The mission is to be the first online provider with the ability to enable customers to ‘try on’ and customise their eyewear using augmented reality technology, to create a level of satisfaction that they are purchasing the look and fit of eyewear they should otherwise purchase from a physical retail store of optometrists,” the IM reads.The new business also has plans for a “minimal number of strategically placed stores” in the capital cities, which will benefit from minimal staff levels and a centralised warehouse. Its disruptive business model will have a “price advantage through elimination of costs from the traditional eyewear business model.”Interestingly, Speqs will use pharmacies to launch its first physical stores. The IM claims that it has “signed a Heads of Agreent with Discount Drug Stores Harrisdale to establish the first Speqs optometry consulting practice within the consult room pharmacy. This will allow customers the ability to have their eyes tested by a Speqs optometrist prior to purchasing their eyewear through our App.”The intention is for the pharmacies to “prove the feasibility of rolling out these practices through large chains of pharmacies.”The connection with Discount Drug Stores Harrisdale is not detailed, however the business appears to part of a larger chain of Australian-owned and operated pharmacies which commenced operation 2001, with the first store opening at Sunnybank in Queensland.The investor document goes on to detail the company’s technology: “With Speqs virtual try-on technology the company will be able to take all the necessary measurents for the dispensing of prescriptions glasses without customers having to visit a store. This will allow us to complete offers for bifocals and multifocals, which whilst only accounting for some 25% of prescription eyewear sales by unit numbers, account for 40% of industry revenue. Currently none of the existing online retailers have been able to solve the bi/multifocal measurent probl allowing us to truly be first to market.”According to the IM, current eyewear “virtual try-on” technology in the market is more of a hindrance than a help. While desktop solutions require downloading applications to run, the only mobile solution available has no automatic sizing technology and poor tracking.“Speqs already has the technology that will provide photo real appearance, with correct sizing and the ability to turn your head 90 degrees to see what profile appearance will be and are ready to commercialise. In addition the launch generation of the technology will allow appropriate measurents to be taken to provide all necessary measurents for the dispensing of prescription eyewear,” the IM reads.Backers and shareholders{{image2-a:r-w:200}}The three people behind Speqs are Mr Neven Botica, Mr Bjorn Russell and Mr Ron Ryder. Perth-based Botica is described has having business interests in mining and horseracing while Russell, also Perth-based, is a franchisee of OPSM, with three stores.Ryder has the technology background and is CEO of LA-based Image Metrics. Its website states that the business was started in 2000 by a team of computer scientists who “created breakthrough technologies based on computer vision, facial analysis and facial recognition.”The IM lists Ryder as a non-executive director owning 40% of Speqs, while Botica is listed as managing director with 22.5% and Russell is a non-executive director with a 16.5% shareholding. It is unknown whether Russell’s business interests in Speqs would affect his OPSM franchises.

When contacted for comment Russell said that the business was “in private and confidential discussion with different groups but noting really exciting to report at this stage. So no fixed launch date as yet and we are quietly in development.”{{image3-a:r-w:200}}He added that Speqs ses to have “created a little bit of excitent around the place”.Russell said that his involvent with Speqs would not affect his franchise agreent with OPSM and, regardless, “I am in the process of trying to exit those franchise agreents so hopefully that will occur sooner rather than later to be honest.”Russell did contradict the official Speqs IM saying that he had no shareholding in the company. When Insight directed Russell to the March dated investor document, which clearly lists the “current capital structure of Speqs” with him possessing a 16.5% shareholding, Russell said, “No, I don’t have a direct shareholding in it at all actually.”When asked if the IM was wrong Russell said, “We are now in June and a lot of things have changed since March. I don’t have any direct shareholding in the business.”Health fundsAdditional information contained within the IM indicates Speqs will target health funds as a way of rapidly expanding its sales and reach. It aims to do this by forming relationships with large private insurance providers and offering branded eyewear at the fully covered rebate price.For example, the IM states that should Speqs become a listed preferred provider for Medibank Private, this strategy could lead to potential revenue of up to $320 million per annum. The IM also claims this would also give Speqs the added advantage of being able to leverage these companies’ marketing capabilities and databases.“Through discussions with health funds, we have been advised that they will support our business launch though cross marketing with their mbership base. HBF, for example, has indicated they will market our model to their mbers as they see value in their mbers, particularly their mbers in rote/country locations being better services by our platform. HBF have approximately 500,000 mbers who wear prescription glasses,” the IM reads.Furthermore, under an apparent agreent with leading healthcare directory Whitecoat, the IM asserts that Speqs is positioned to become the first online retailer of eyewear whose customers would be able to claim directly from their health funds at checkout. Through this strategy, Speqs has set itself the ambitious target of achieving $25 million in online sales in its first full year of trade.In order to hit that mark, the IM has th more than doubling sales in each quarter, from a base of $1 million in Q1, through to $15 million by Q4. According to the figures, this would see the company achieve $14 million gross profit in the first year and an operating profit of $6.5 million.The IM timeline also has Speqs achieving an ASX debut in the second half of 2017 and annualised sales equivalent to 5% of the Australian marketplace by Novber.Managing director Neven Botica was contacted for comment and to provide additional information, however, he was overseas at the time of going to print and has not responded.

IMAGE: Courtesy of Facebook/Speqs

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