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ECPs Explore the E-Commerce Equation

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NEW YORK—From the earliest phases of the internet, traditional brick-and-mortar retailers have felt the world shift as the digital revolution in e-commerce has reshaped everything from the distribution of books and music to birthday wishes and entertainment.

In recent years, however, as social media and e-commerce have become much more a part of everyday life, fueled by peoples’ familiarity with technology and smart phones’ mobility, things continue to change. Online-only players have taken to opening full-time physical retail locations or popup stores. Those in the traditional retail space, like major department stores, national mass merchandise retailers and car dealerships, have invested heavily in their own online commerce presence. In health care, insurance companies, hospitals, caregiver groups and pharmaceutical distributors have bolstered their own online commerce and communications capabilities.

Independents, practitioners and smaller retailers, have started to improve and enhance their web presence as search, referrals and social recommendations take precedence in bringing, directing and facilitating customers.

It used to be that when e-commerce was mentioned as a next step, that was where independent optical retailers and ECPs drew the line. They wrestled (and still are) with providing PDs to inquiring consumers, with people coming into their stores asking for fixes of poor quality or problematic eyeglasses ordered “online.” And, the matter of delivering service for Rxs, particularly for ophthalmic progressive or multifocal lenses online, or matching the proper frame choices for those, is still an issue for many, even as Virtual Try-On (VTO) methods and technologies improve.

But things are changing.

While national and regional optical chains say they are currently working on researching “solutions” to the online e-commerce challenge, there are now also more independent optical retailers and ECPs who have started to dip their toes into offering an online, e-commerce solution for their practices or optical stores and dispensaries. (see story Page 48)

Essilor offered its first MyOnlineOptical (www.myonlineoptical.com) solutions to ECPs four years ago. That provided a chance for ECPS to choose the brands to feature on their site, they received customer service, fulfillment and processing and MyOnlineOptical (MOO) provided profits to the practice and took a transaction fee. One year ago, MyOnlineOptical added a second business model choice and offered a monthly subscription fee for its service. There is a smaller fee in this approach, to help ECPs manage fixed costs and offer credit card transactions; in this case the dollars back to the ECP are a bit higher.

According to John Walborn, who oversees the MOO program, “Our goal has been to help ECPs present a way to expand their offerings and market to patients. The decision making within the process is theirs to make; we offer resources to help them make the decisions and we’re seeing that there are a range of things they might want to choose. Some want to mirror the products in their stores; others want a different online experience or different product categories and want to offer only unbranded products online. The idea is that they maintain control and make the decisions and we facilitate.”

Walborn also pointed out, “Many more practitioners have participated in contact lens ordering/replacement lenses online and those are now are starting to re-examine their options in the eyeglass, sunwear or accessories arena. We are really offering the tools, the supply chain and an efficient fulfillment organization to them.”

The other thing Walborn emphasizes is that the brands requested by the ECPs are vetted with vendors. And that these requests for independents’ online shops are handled completely separate from Essilor’s other lines of business, including the freestanding e-commerce websites it owns (including FramesDirect, EyeBuyDirect and the company recently announced the pending acquisition of Coastal.com). “We approach vendors for approval for MyOnlineOptical sites.”

At VSP Global, there are two programs, Eyeconic and eStores, currently offered “to help build a bridge between the expert service of private-practice eyecare and the convenience of shopping online for eyewear,” the company points out. Eyeconic, which launched in July 2011, provides VSP members and consumers, who are looking to purchase online, a site to purchase glasses and contacts. Eyeconic pays VSP doctors a professional support fee when patients purchase from Eyeconic.com. The site refers online shopppers to VSP doctors either through their order or via the “Find the Doctor’ locator directory on the site.

Eyeconic features contact lenses and products from the Marchon and Altair portfolio of frames and sunglasses. Doctors who prefer to offer their own online solution can also partner with eStores, which is linked from their own practiced website and branded to that ECP. Those eStores also offer flexible product pricing, set by the ECP.

A VSP spokesperson shared some facts. All 30,000 VSP doctors are eligible to receive payments through Eyeconic. Any consumer can purchase contact lenses through Eyeconic. As of today, nearly half of VSP’s 64 million members have the ability to apply their benefits to purchase contacts and optical through Eyeconic and, today, nearly 3,500 VSP doctors are actively participating through Eyeconic and eStore solutions. This is an increase of 400 percent over the past 12 months.

Further, VSP said that 31,000 VSP members used the site to ‘Find a VSP doctor’ and half a million people visited Eyeconic in 2013; about 3 percent purchased on the site. In addition, VSP doctors received professional support fees totaling nearly 25 percent of Eyeconic’s total revenue. From January 2013 to December 2013, Eyeconic monthly sales grew by 275 percent.

Michael Hansen, who is president of VSP Global’s newly created Retail Development division, noted, “Eyeconic was created to help ECPs compete more effectively in the retail space. And it’s designed to drive solutions to enhance demands among consumers in ways which benefit that VSP provider.” He added, “This year, we’ll be exploring more strategies to help them be more competitive. We expect significant growth in the next 5 years in this category.”

Iristocracy.com, a new consumer eyewear online site which bowed last year, showcases a curated collection of eyewear and fashion accessories along with a 3D try-on capability. Natasha Vora, co-founder and CEO, emphasizes that the site “respects and values the role of eyecare professionals in its communications with consumers who shop at the site.”

The site advocates eye health and explains itself as ‘prescription free,’ which means the company encourages online eyewear shoppers to have their prescription filled with an eyecare professional. For those who do so within 30 days of their order ship date, they can receive a $50 Visa prepaid gift card from Iristocracy in the mail after they have scanned and emailed or faxed the company their lens receipt. Vora is looking to expand her roster of participating ECPs and plans to develop an extensive directory and locator soon.

Further, Iristocracy has started working with some independent optical retailers. Says Tal Landau, store manager/optician with upscale Glasses Ltd., Chicago. “What intrigued us most about Iristocracy’s business model was the virtual inventory that we were able to access, such as, Cazal, Ziggy and others. The virtual try on feature was uniquely different that anything we had seen before.”

He added, “We are using the Iristocracy computer/kiosk in our doctor’s office and it is shown to our clients that haven’t found a frame from our in house selection or to patients that are getting an eye exam. Our most common consumer comment regarding the site is that they wish to try on for fit and comfort with the actual frame. Upon expressing this concern, the team at Iristocracy quickly provided us with 12 actual frames that are for sale on their website that we keep in our store.”

Glasses Ltd. is also testing another approach to offering a more extensive collection for online ‘opportunities’ for its clients. Its new 3-For-3 program points customers who visit its website to the home pages of many elite vendors in its high-end optical mix. If customers see something they like, Glasses Ltd. will order three frames for them and ship them to the customers for home try on – at no expense. The program has just started. Said Landau, “ This was part of the recent website upgrade and is still too new to comment about at this point. We’re exploring.”

Stephannie Keller, who runs MyEyeStore, a Minneapolis, Minn.-based company which also helps ECPs develop their own online sites/e-commerce stores, is one who says that working in hand with frame, sun and optical products suppliers is critical to how her clients’ ECP sites operate. Keller, an optician, who has been in the industry for 18 years, owning and running a Pearle Vision franchise, came to the company several years ago. She said, “All the product costs flow through us. So we customize what each of our clients is looking for and we negotiate with the vendor. We are very transparent and can work with any supplier for frames, sun, contact lenses, other categories, too. The vendor determines their own rules of engagement for the client.”

MyEyeStore has worked with independent practices and groups who might offer the full gamut of product choices in their online store or just categories of products that are not often emphasized in their physical dispensaries. Plano sun, over-the-counter readers, sports vision goggles, and a burgeoning vitamin and nutraceuticals business are part of several sites.

MyEyeStore’s online sites for ECP clients run on a monthly service fee. “Regardless of what product or service you’re selling today, you’re going to need to be a part of e-commerce,” said Keller. “This is not going away, it’s ramping up more and more every year.

One thing that Keller emphasizes is that MyEyeStore is not involved in selling to consumers. “We don’t inventory product. We ship to the patient. But all is designed to come from the practitioner or the optical with their branding, even the packing slips have their name. It takes communication by the practice in the beginning to tell patients about it. The real value for the practice is in terms of image and incremental sales—the best is when a practice gets an order from a patient at 3:00 am. They are saving a lot of staff time on fulfillment issues and everyone’s looking to find a way to utilize their staff in more productive ways today.”

MyEyeStore is currently live online with about 20 e-commerce stores. Said Keller, “Three years ago, there was a feeling among independents which was ‘We have to do something, but we don’t know what.’ Now our phone is ringing. People need to get in the game. Practices want to hang on to their patients. The conversation about e-commerce among independents is top-of-mind today.”