Testing the resilience of optical retail

Market research agency, Mintel’s UK Optical Goods Retailing Report 2023 traces the recovery of the market since the height of the pandemic, and the challenges that remain ahead for the sector.

OT heard from Fiona McDonald, retail analyst at Mintel, about key trends in the industry, and consumer habits.

1 The resiliency of the industry

 
Looking at the market over the past few years, Fiona McDonald, retail analyst at Mintel, shared that many people were “understandably cautious” about going into practices and stores in 2021, with many people choosing to miss appointments “which obviously had an effect on the market.”

Those practices based in big cities saw sales falter perhaps more than others, she said, with low footfall due to restrictions in public movement, office closures and a shift in working patterns.

“In 2021 and 2022 we saw a good level of recovery with the market,” she continued. “This is attributed in part to a backlog of appointments, and the sales of glasses and contact lenses that would have come from that.”

“The revenue that we saw lost in 2020 would have been recovered throughout this time, so the market for optical goods will have reached pre-pandemic levels, and the effects of the pandemic are unlikely to have had a lasting impact on the sector,” McDonald said.

2 Cost concerns

 
The cost of living crisis presents the next key challenge for the sector.

McDonald noted: “the necessity of the industry does negate any kind of major fall in demand, and recovery growth is expected as we go forward.”

However, “that resilience level is being tested. Now more than ever there is this huge pressure on consumer pockets, and the industry isn’t immune to the economic climate. No-one is.”

She cautioned: “People are very wary of value and the amount of money that they spend.”

For this reason, transparency and educating the patient around what they are paying for is really important.

Additional services or offerings can, in the consumers’ eyes, “rack up the costs quite quickly,” and for budget-conscious patients, this might put them off, McDonald shared, explaining: “Giving consumers confidence in what they’re spending is really important where budgets are being constricted.”

While wary of costs, consumers are still seeking value and this remains important for the market, Mintel suggests.

McDonald emphasised: “It is important for eyewear specialists to highlight all the extra ways in which they add value.”

The patient or customer experience, including the invaluable advice and expertise they can access in-practice, is key, in addition to the products and services provided.

“It’s important to show: it’s not just about cost – here’s all these other things we can give you,” she suggested.

3 Missed appointments

The research by Mintel indicated that people are choosing to forego appointments or buy new frames as they redirect their finances.

“We’re all feeling it, and it’s very topical,” McDonald said. “Understandably, we have seen consumers cut back on spending. Mintel data indicates a gradual decline in the number of people who have had their eyes tested for the last two years.”

Mintel’s research found that nearly a third of consumers haven’t had any form of eye test in the last two years.

This figure tends to ebb and flow, McDonald explained, as patients without eye conditions or concerns will go to their scheduled appointment when they receive their reminder every two years.

“So there was a surge of appointments in 2021, when there was this massive backlog, and we’d expect the anniversary of the pandemic to kind of mirror the increase in demand,” the analyst said.

“The concern for opticians and optical specialists now, is problems going under the radar because consumers are missing appointments, or choosing not to purchase new lenses because of the financial strain,” she explained.

4 Generational differences

 
Looking at the consumer demographics, Mintel found that older generations tend to be more likely to have had an eye test, and to view it as a necessity.

“It’s those in the 25 to 44 year old category that are the least likely to have had any kind of eye test in the last two years,” she said. “Around half of the 16 to 24 age group have had an eye test, compared with 63% of this age group in 2021. So that level is dropping.”

Cost will be a factor in a number of those cases.

“Within our data at Mintel Research, a quarter of consumers did agree that they postponed an eye appointment due to the rising costs of living. As much as the industry is essential, there is a lot of evidence of consumers cutting back,” McDonald explained.

“Agreement with the statement is heavily weighted towards the younger generations, so this highlights the necessity of the industry and eye care being regarded as a health issue,” she said. “While the majority of consumers surveyed are not postponing appointments, it does underline the importance of monitoring eye health.”

The different demographics approach budgeting differently, with older consumers more likely to focus on health as a necessity.

5 Highlighting health messages

Mintel data indicated that consumers are likely to go for an eye test when they experience a change in vision.

The results indicated that younger consumers don’t see as much of a need for regular tests if they think their vision is fine: “If they don’t actively see a change in their vision, especially if they’re on a budget, they might think, ‘well my eyes are fine.’”

The fact two thirds of consumers have had an eye test in the last two years, represents a slight increase on numbers seen in the 2021 report, when many would have still been concerned about the pandemic.

“With increasing levels of working from home, people are a lot more aware of their eye health, especially when it comes to screen time,” McDonald said.

This could be a particular problem for younger consumers growing up around screens, she added.

“It is important for opticians, specialists, and those in the market to highlight those issues and encourage consumers to come in for their tests, that it’s more than just a regular check-up, but about catching issues early on.”

6 Retail therapy

Another financial dynamic has arisen following the years of COVID-19 lockdowns.

While some are budgeting due to increasing costs, on the other side, “you will get consumers who have had a tough time and want to be buying again.”

Buy-now, pay-later methods, which are already seen across retail, have a “huge opportunity” in eye care, McDonald said. “Younger consumers, especially if they are conscious about budgeting and prices, will be familiar with these methods and happy to use them.”

7 Marrying digital and physical

“In the wider industry, online has seen this lasting surge that has been a kind of legacy trend, as people move online and they are quite happy to buy online,” McDonald said, but added that this has “stagnated” in the retail sector.

When it comes to optometry, however, people are “very much” still in favour of going into the practice, research found.

“People are reliant on the advice and expertise that they get in store when we talk about the reasons why they would pick an optician,” she explained. “There is still a massive drive to go in.”

The digital space does still present opportunities for the optical profession and industry.

McDonald suggested: “While people are happy to buy their contact lenses or repeat frames online, in terms of appointments, people would much rather go into practice.”

Online can provide solutions to issues with backlogs, but she noted: “It is very important that these are highlighted as an appendage – something that helps consumers and is not a hoop they need to jump through in order to see a physical optometrist – it needs to be seen as a value added thing that they can do if they need to.”

Mintel suggested that people who regularly visit their opticians will have done their research.

“I think joining together the offering of quick and easy ways to purchase online, but still having that physical space where customers can connect with their optician and get the advice that they need and confidence in the health services they are receiving, is really valuable to the market,” McDonald said.

“It’s about getting the balance right,” she added. “I don’t think within the industry there’s going to be a huge overhaul and everything’s going to be online. That’s just not the way that the industry works and consumers aren’t as responsive to online developments within the optical goods industry as you might expect. But there are those consumers who do value the ability to shop online, and there’s that convenience factor and ease factor.”

For some in practice, the digital space can bring concerns, such as that key issues might be missed.

“But there are ways they can implement these online tools,” she highlighted, such as checking in with contact lens wearers through a consultation online.

McDonald emphasised that moving into the digital space isn’t an all-or-nothing approach, and marrying both digital and physical is important.

8 Sustainability an increasing focus

 
Sustainability is a topic that is seen across the whole retail industry, and is “peeking its head into eye care,” McDonald said.

Mintel research indicates that interest in sustainability peaks amongst younger consumers.

“Sustainability becomes a pressing issue for consumers, so there is an opportunity for eye care specialists to highlight this,” she said, adding that brands that centre themselves around ethics and sustainability will stand out, “particularly as we move towards younger consumers becoming a mainstream consumer.”

Repair and refurbishing services are increasingly appearing in the market, along with re-glazing services.

McDonald expects to see more re-glazing services in the coming months. Not only do these services help to reduce making new purchases, but for budget-conscious consumers, it can also be a more cost effective option.