Posts Tagged ‘Specsavers’

Raising the glasses bar

July 21, 2010

Almost eighteen months ago, I blogged about the trouble faced by Australian optometry chain OPSM (and their Italian parent Luxottica) from the challenge of low-cost newcomers such as Specsavers.

It would seem we’re finally seeing the strategic response of OPSM, a new, innovative store concept launched this week:

“The OPSM Eye Hub, which opened yesterday, is designed in the shape of a retina, and offers next best thing to augmented reality – a simulation machine so people can road test their choice in eyewear in action such as jogging, along with playback mirrors so people can view videos of themselves sporting glasses while not staring forward”

You can read more of the spiel at their dedicated website. This is a classic differentiation ploy, as the firm attempts to make customers willing to pay a premium for bells and whistles.

As spectacles (and sunglasses) are clearly fashion items, it certainly makes sense to try and build a brand and experience that moves away from solely price considerations.  Utilising technology and store architecture are both viable ways to create a clear point of difference from others.  Destination stores (e.g. Apple’s temples) and retail theatre may well be the next phase in once staid optometry market.

From an International Business perspective, it is fascinating to see that Luxottica is allowing subsidiaries to experiment in this manner. Might this be an innovation that gets rolled out around the international network in the future (a la McDonald’s roll out of the Melbourne-initiated McCafe concept)?

A competitive spectacle

February 24, 2009

There was an excellent discussion of the Australian spectacles market in today’s Age newspaper.

A previously docile market dominated by a very large player in the midst of hundreds of effectively sole traders has been shaken up considerably by the entry of British outfit Specsavers.

The incumbent giant is the Italian firm Luxottica who added the OPSM and Laubman & Pank marques to their globally known Sunglass Hut brand via an acqusition in 2003 (as discussed in my chapter in a book called The Internationalisation Strategies of Small-Country Firms).

They may be #174 in Deloitte’s Global Retail Powers rankings, but have clearly struggled when challenged by a lower-priced, more streamlined competitor. Luxottica are a curious player in the optometry business, as they were once only a manufacturer and have vertically intregated forward into the retail business, without obviously passing on any cost savings to consumers. Their stores are typically positioned as quality, fashion-conscious purveyors.

opsm storeIn contrast, Specsavers have grown fast in their home-country, Ireland, Spain and Scandinavia through a more thrifty range of offerings and aggressive pricing. It is fascinating that Australia has become such a big target for this mob (we may soon by 15% of their business). Presumably this reflects their own observation about the easy goals that can be kicked on this previously high-margin playing field.

As the article notes, Specsavers are not the only new entrants. Woolworths is experimenting with even more pared back concern through their Big W variety stores. This may well also be a testing ground for Woolies as it prepares itself for another inevitable attempt to tackle the pharmacy regulations and become even more Wal-Mart-like.

It was always going to be hard for Luxottica to build considerable barriers to entry in this business, as there are a lot of optometry outlets (and optometrists) to be snapped up by an aggressive entrant. The challenge is now to adapt their business strategy to this new competitive dynamic.

As a glasses-wearer, I say bring it on!