Feature, Report

Contact lenses: Going toe-to-toe with online retailers

Online retail has had a far-reaching impact on the eyecare sector, particularly in terms of contact lens sales. MYLES HUME looks at how optometrists can differentiate their businesses to overcome the challenges presented by new e-commerce operators.  

It is a scenario all too common for the modern-day optometrist: A patient visits the practice, obtains a prescription and is never heard from again, presumably venturing online to order their contact lenses.

Online retail has drastically altered business for traditional brick-and-mortar retailers. The issue is particularly pertinent to the eyecare sector, where lean operating structures and the developing sophistication of e-commerce platforms has increasingly eroded the income of general optometry practices.

A brief analysis of Australia’s leading online contact lens retailers explains why patients shop online. Offers of up to 20% off first orders, free shipping and returns, 24/7 customer service and a best price guarantees make it difficult for traditional businesses to attract price-sensitive consumers.

These convenient and competitive offers are driving revenues of up to $108 million for Australia’s online eyeglasses and contact lens sales industry, according to analysts at research firm IBISWorld. A 34% increase on 2013-14 figures, these statistics suggest eyecare professionals need to adapt if they are to retain and maximise the contact lens component of their business.

While online retailers can continue to expect healthy returns from disposable contact lenses, industry experts say the advent of specialised products, alongside services for myopia and presbyopia, present a new opportunity for private practitioners.

Meanwhile, other industry statistics show that despite increasing revenues, the percentage of people buying contact lenses online is now in decline since peaking six years ago, partly thanks to superior the customer service offered in the practice and technological advances supporting smaller operators. Faced with an increasingly competitive market, optometrists who differentiate their businesses can stave off the challenge.

‘Patient retention is critical’

The emergence of e-commerce, in combination with optical chains, has had a transformative impact on Australia’s eyecare sector over the past decade. According to ProVision, Australia’s largest network of independent optometrists, these changes have demanded a more tactful approach from smaller eyecare businesses.

“It’s important that practices recognise the key drivers for patients wanting to shop online, such as convenience and price, but the goal is to over-ride these drivers by establishing enough tangible value in the practice experience that patients want to return,” ProVision merchandise manager Tony Jones says.

ProVision represents 465 independent practices and supplies members with comprehensive business support. Helping optometrists navigate the competitive contact lens dispensing market is one of its services, particularly the retention of patients at the re-ordering phase.

Jones says that while contact lenses sellers have had an online presence for some time, in recent years their profile has increased exponentially.

“This increased awareness coupled with highly competitive retail pricing has seen many patients sourcing their repeat orders via an online site instead of returning to their practice of choice.

“Not only does the optometrist lose the repeat business, they are at risk of compromising the patient relationship, which has far greater implications in terms of future business growth.

“In an ever-increasing competitive market, patient retention is as critical as attracting new patients, so any erosion to online players is sure to have a serious impact.”

Jones says practice-patient continuity is especially important for contact lens wearers. Optometrists have a duty-of-care to ensure the product is suitable, particularly for first-time wearers. This hands them a key advantage over online retailers.

“The patient needs to be reassured that any questions or concerns they have can be answered satisfactorily. It’s also important that regular eye exams are part of any patient’s care plan, both to detect changes and ensure that the best solution is being prescribed.

“The patient benefits from an in-practice visit by: increasing their awareness around latest technological developments, receiving fitting guidance from trained staff, and trouble-shooting to improve the overall contact lens experience – none of which are available through online providers.”

With convenience being a key motivator for online shoppers, five years ago ProVision built a business-to-consumer online portal to help its practices compete. Called ProShop, it is a ProVision-managed online store skinned as if it were part of each individual practice’s website.

“This provides an avenue for patients to purchase products online, particularly contact lens replenishment orders, to avoid them straying to other online players that they have no relationship with,” Jones says.

“Whilst a number of ProVision members utilise this service well as a patient retention strategy, ProShop uptake has plateaued in recent years in line with overall market trends.”

The convenience factor

Mr Richard Lindsay, optometrist and director of East Melbourne practice Richard Lindsay & Associates, says convenience is a major reason why at least 80% of his patients continue to order through his practice and its website.

Established in 1998, his practice provides specialist contact lens care for patients who require custom contact lenses, while also caring for many patients with regular soft disposable lenses.

“We can’t really compete with online distributors on price. Our attitude is not so much to compete, but to focus on service, in other words, convenience, and online is just as much about convenience as it is about cost.”

Lindsay says optometrists should embrace the fact some patients will only visit to obtain a prescription. For those patients he focuses on providing a quality service and charging accordingly, knowing that dispensing income is only part of the contact lens business.

“If someone chooses to get their contacts online, that’s their prerogative, we just want to make sure we see them on a regular basis for their care, and then we charge appropriately for that,” he says.

“Contact lenses can be profitable, but you have got to charge for your services and accept the fact that some will go online and, if they do, you should make every effort to make that patient feel welcome to come back for their regular follow up.

“If you make them feel uncomfortable or unwanted because you’re upset about them going online, of course they will go elsewhere, and you’ll lose that patient and potentially others they may have recommended.”

While overcoming the price challenge could be difficult for some practices, Ms Soojin Nam, an optometrist for independent optometry group Eyecare Plus, says there are now options for practices to price match internet retailers, as well as offer free home delivery.

“There are also many patients who would prefer to support their local optometrist,” Nam says.

“Online retailers will continue to provide the convenience that some people need but as the need for customised eyecare rises, there will be a greater awareness of the different options available that would be best suited for their specific situation. The better the differentiation, the better educated the patient will be.”

At the other end of the scale, optical chains are focussing on ensuring patients can access contact lenses in a way that best suits them. Specsavers, a market leading in the Australian contact lens market, is one such example. Its model is based on a strong over-the-counter and online offering, supported by its optometrists and dispensing professionals in-store.

“This in-store and online approach has been the mainstay of our approach to contact lenses since 2012,” Mr Steve O’Leary, the company’s director of product and contact lenses, says.

“We have seen our market share grow to market leadership by volume in both categories as a consequence, at around the 40% mark in each. A model that allows our patients to buy online and manage any issues with no-cost aftercare in the Specsavers practice of their choice has facilitated our success and lifted patient satisfaction to new heights.”

Multi-million dollar industry

In its report titled Online Eyeglasses and Contact Lens Sales – Australia Market Research Report, market research firm IBISWorld found online eyewear and contact lens revenue reached $108 million this year. In Australia alone there are now 47 businesses operating in this space, and from 2015-20 the segment has grown at an annual rate of 5.1%.

According to Inside Retail, based on a 2014 IBISWorld report, revenue was previously $71 million, equating to a $37 million increase during the past five years alone.

Analysts said online retailers continued to reap the rewards of having low operating cost structures. This enables them to aggressively discount products, while brick-and-mortar counterparts are faced with high labour and utility costs.

Today, IBISWorld reports the online eyewear and contact lens industry in Australia may only just be getting started, but warns more disruption is on the horizon.

“The online eyeglasses and contact lens sales industry displays low market share concentration, with only one player commanding a market share in excess of 5%.

“The existing large networks and strong reputations of incumbent operators increases the entry barriers for prospective industry participants. However, as the Australian industry is still in its infancy, new companies still have the opportunity to gain first mover advantages.”

Despite analysts are predicting a profitable short-term for e-commerce operators, other figures suggest it may have already peaked.

Jones points to a survey conducted by Delta MV Market Research for contact lens manufacturer CooperVision ANZ in November 2017 as evidence patients did not believe an online purchase was a better overall value option.

“When asked where they most often buy their contact lenses, in 2017 only 21% regularly purchased online. This has dropped from 26% in 2013 with a steady decline seen over the intervening years,” he says.

“When patients were asked why they don’t buy online, the key reasons given were: better customer service was provided in practice, they could mostly order via a practice website 24/7, and the interaction from buying in a practice enhanced their contact lens experience.”

Specialised products go mainstream

Manufacturers  are also playing a part in the patient-practitioner relationship as more specialised products, that can’t be provided online, are pushed further into general optometry practices.

Optometry Australia (OA) chief clinical officer Mr Luke Arundel highlights soft multifocal contact lenses for myopia control and presbyopia as an example.

“With an aging population, multifocal contact lens fitting will become more important in providing a full range of visual solutions for patients. Likewise, with myopia set to affect half the world’s population by 2050, the demand for myopia control lenses will continue to rise,” he says.

“The advent of soft myopia control contact lenses has very much taken this facet from contact lens practices involved in speciality contact lens fitting and orthokeratology into mainstream practice.”

These burgeoning markets, at opposite ends of the human lifecycle, have seen the arrival of products by Visioneering Technologies (VTI), mark’ennovy and CooperVision.

Mark’ennovy’s Asia Pacific managing director Mr Chris Harous says the release of the company’s MYLO myopia control contact lens is a “a game-changer” for practitioners.

“This process of contact lens fitting, prescribing, dispensing and aftercare has the ability of taking contact lenses from just another retail commodity product back to a prescribed medical device that starts and stays with the eyecare professional, from the first consultation to ongoing treatment of their patient,” he says.

VTI’s senior vice-president of sales and marketing Mr Tony Sommer also believes specialised products, such as his company’s NaturalVue multifocal for presbyopia and myopia, present a new opportunity for independent optometrists.

“Our company is one of few that focuses on the independent practice. We don’t offer NaturalVue to retail chains such as Specsavers or OPSM, but may make exceptions on a case-by-case basis for independent franchise owners,” he says.

“Our products require the practice to spend time educating the patient on their use, and are only available to independent optometrists. Myopia progression control cannot be purchased from a website.”

Sommer says VTI has made it relatively straightforward for optometrists to prescribe NaturalVue. This involves an online accreditation process with a questionnaire and videos, which takes about 40 minutes to complete. This allows the practitioner to secure a firm grasp of the fundamentals and allows the company to qualify the account. The final step is a visit by a sales representative for fit set installation and in-person training.

“The fundamental issue is that a contact lens is a medical device, not a razor blade or toothbrush. As such, its fit and efficacy must be evaluated by a trained professional. Websites are built for convenience of commodity purchases – not fit and evaluation of a medical device,” he says.

“I think online retailers will be as successful as they are in other industries, particularly for spherical lenses. However, lenses that are more specialised in nature, such as those for myopia progression control, will be a key pillar in a successful private practice.

“Remember, many practice management consultants counsel that the way to beat a ‘big box’ or an online retailer is to offer products and services that they cannot – such as specialised lenses and outstanding patient experience.”

Closing a legal loophole

Looking ahead, Arundel predicts the convenience and economy of online retail will continue to be an attractive option in increasingly time-poor societies.

While there is little doubt e-commerce retailers are here to stay, what is less certain is how regulators will respond to a market that has become vulnerable to counterfeit and unapproved products.

The US and Europe have adopted quite different approaches to the regulation of contact lens sales. In the US, tightened Federal Trade Commission legislation means sellers can only supply contact lenses if they are presented with a valid prescription. Europe has gone down the path of deregulation, with some countries even allowing contact lens sales through vending machines.

In Australia, the rise of unapproved contact lenses from overseas providers has been a cause for concern for OA, which has begun advocating for stricter regulations.

“Best practice for online retail would be to confirm validity of the prescription from the patient’s prescriber, or require an upload of a valid prescription, as is common in the US,” Arundel says.

OA is aware of patients accessing websites to swap their prescribed contact lens for an alternative product without undergoing an appropriate review to determine if it fits and provides optimal performance.

Patients can access these products by ‘self-validating’ that they have a prescription.

Arudnel says purchasing unapproved and counterfeit lenses from overseas presents a risk. A 2017 Journal of Forensic Sciences study testing 300 pairs of these types of lenses found 48% of the non-prescription cosmetic lenses and 60% of the counterfeit tested positive for microbial contamination.

Research published in the journal Ophthalmology by Australian researchers has also identified the purchase of contact lenses over the internet as a risk factor for microbial keratitis.

Subsequently, OA recently lodged a formal submission with the Australian Therapeutic Goods Administration to close down the legal loophole surrounding plano contact lenses not being regarded as a medical device.

“We are also working with state governments to explore opportunities to pursue online retailers supplying contact lenses without a valid prescription, as in some states this carries a $30,000 per offence fine,” Arundel says.

While the issue of industry regulation will remain up for debate, optometrists can be certain that online retailers will continue to assert themselves in the market, particularly in the disposable lens category. For practices, particularly independents, trying to maintain customer loyalty, offering expert knowledge, care and service that cannot be matched online is the best option for both the business and patients.