A steady market
Mintel's February Optical Goods Retailing report highlights that very little has changed in the sector over the last five years, and makes predictions on what the market will look like by 2019
30 September 2015
Demand for optical goods “has changed very little” over the last five years, according to the latest report from leading market intelligence agency Mintel.
Concentrating on the period between 2009–14, Mintel’s Optical Goods Retailing report, which was published last month, estimates that consumer spend for the sector reached £2,930m in 2014. Also making its best and worst case predictions for the market come 2019, it states that market value could stand between £3,254m to £3,773m.
Dividing the consumer spend on optical goods and services by its five categories, Mintel estimates that in 2014 spectacles accounted for 60% of total spend, contact lenses for 19% and eye examinations for 16%. Contact lens solutions and eye drops complete the remaining 3% and 2% respectively.
While little has changed in the sector between 2009–14, according to Mintel, the growth which has occurred has been helped by demographic shifts in the UK’s population, overall population expansion and a growing number of people aged 55 years and over.
Senior retail analyst for Mintel, Jane Westgarth, explained: “The market for optical goods is mature and has exhibited very slow growth in recent years. A small improvement in the economy and higher levels of consumer confidence has helped to sustain demand. However, this is set against a background of an ongoing battle for market share among the major retailers.”
While the market is dominated by the sales of spectacles and contact lenses, the latter has been the fastest growing segment, with “a shift towards wearing daily disposable lenses, which attract higher average spending than for monthly disposable lenses,” Mintel reports.
In addition, a gradual increase in the average transaction value of spectacles, contact lenses, eye drops and the eye examination has been observed. The eye drops segment saw the largest growth at an increase in spend of 23.1%; this was followed by contact lenses (18.2%), eye examinations (16.5%) and spectacles (7.4%).
On the High Street
Providing insight into marketshare on the High Street, Mintel estimates that in 2014, Specsavers branches accounted for 35% of optical outlets, followed by independents (29%), Boots (15%), Vision Express (12%) and Optical Express (2%).
However, it is Mintel’s view that Specsavers is reaching saturation in terms of the number of outlets and geographical coverage it has in the UK and therefore continued growth for the multiple is not expected. It points out that, by contrast, with fewer stores, Vision Express and Boots still has scope to expand.
Making maketshare predictions, Mintel wrote: “Although Specsavers will remain a dominant force in the UK, it faces tough challenges as Boots and Vision Express continue to grow their store chains and as the supermarkets become a more established presence in optical goods retailing.”
Focusing on the independent sector which represented 29% in 2014, Mintel admitted: “Pressure on smaller chains and independents will continue to be fierce and we expect numbers to continue to contract.”
Perhaps unsurprisingly due to its marketshare, Mintel found that Specsavers was the most used opticians (445) in a survey of more than 1,000 people who had purchased vision correction in the last year. While Boots and Vision Express also proved popular, accounting for 16% and 10% respectively, independents also held their ground at 15%.
Yet, in terms of online retailers, Mintel believes “online sales have taken off slowly,” accounting for just 3% of the marketshare. Explaining the reason for this, the Mintel report says: “Retailers have hung onto contact lens customers by tying in essential eye check-ups with direct debit schemes, making it less likely that people will pay for an eye examination in-store but then buy their lenses from a cheaper online supplier.”
It added: “For spectacles and sunglasses, people want to try them on to get the right fit and look at themselves in the frames before making a decision to buy. Consequently, online spectacle sellers remain relatively minor players in this market place.”
According to statistics gathered by Mintel through an online survey, 60% of adult respondents have had a sight test in the last 12 months. Of that 60%, over half said that they had taken advantage of a special offer.
Positively, loyalty was high among those who had an eye test in the last year, with two-thirds of those going to the “optician they always use,” Mintel found. Yet, of those who switched opticians, 11% said they did so because of a special offer.
Reinforcing the loyalty message, 62% those who purchased eyewear did so from the optician they always use. In addition, very few people appeared to shop around, with just 9% saying they visited more than one retailer to ensure they got the best deal.
Furthermore, of those who had an eye test in the last 12 months, just 19% who required vision correction had not made a purchase.
Ms Westgarth explained: “The market is awash with special offers and discounts which remain the major route to attracting attention and persuading customers to switch.”
With a changing population, looking to the future, Mintel states that by 2019 the number of people aged between five to nine years will have risen by 8.9%, as well as those aged 11 to 14 growing by 11.1%. Therefore, demand for children’s eyecare and glasses will increase, the report says.
From the young to the old, the population of people aged 55-64 years old will also grow by 10% over the next five years, Mintel states, with the number of those aged 65 plus additionally growing by 9.1%. As a result, because the majority of people over the age of 45 require vision correction, demand for spectacles and complex lenses are expected to grow.
Concluding with two main considerations for the sector which will affect market share Mintel highlighted attracting customers from other opticians and retention of existing customers. “This means that we will continue to see promotional tactics designed to persuade customers to switch opticians,” the report stated. “Relationship marketing, including loyalty deals for existing customers, will be an increasingly important tool in the marketing mix.”
- Readers who wish to purchase the Mintel report in full can receive a 10% discount by referencing the code: OPTTO10.