Optical Goods Retailing - UK - February 2017

Optical Goods Retailing - UK - February 2017

Mar 2017 Mintel Lasers and OpticsN/A Price :
$ 2510

Concentration of the retail sector has continued and major suppliers have moved into online selling. The largest retailer, Specsavers, has continued to build market share, thanks to the expansion of the chain, as well as the addition of related services such as domiciliary and hearing services. In its latest move, Specsavers is determined to develop MECS (Minor Eyecare Conditions Schemes), adding to its portfolio of services. Attention-grabbing deals remain the cornerstone of promotional strategy, but we are seeing more brand building by the chains in order to reduce the focus on discounting. New opticians inside John Lewis (in conjunction with Luxottica) and the steady growth of optical chains at Asda and Tesco will intensify competition even further. Plus, online selling is continuing to concentrate into the hands of major suppliers and multiple groups; most notably many of the pioneers have been bought by Essilor. Meanwhile Superdrug has entered the online market for prescription spectacles. Inevitably the losers will be independents, which continue to see market share being steadily chipped away.

Table of Content

Overview

What you need to know
Products covered in this Report
Excluded

Executive Summary
Consumers spend £3,067 million on optical goods and eye examinations
Figure 1: Consumer spending on optical goods and services, 2011-21
16.5% growth forecast for sunglasses between 2016 and 2021
Figure 2: Consumer spending on fashion sunglasses, 2011-21
Spectacles are 61% of the market by value
Figure 3: Consumer spending on optical goods and services, by category, 2016 (est)
Ageing population expands audience for prescription eyewear
Companies, brands and innovation
66% of the market captured by the top three opticians
Figure 4: Distribution of optical goods and services, by retailer, 2014 and 2016 (est)
Highly concentrated supply chain
New Danish entrant with personality
Superdrug sells optical goods online
Emerging world of wearable technology
Specsavers brand stands out
Figure 5: Attitudes towards and usage of selected brands, January 2017
The consumer
57% of adults had an eye examination in the last year
60% of eye tests were paid for by NHS
Figure 6: About the last eye examination, October 2016
22% switched opticians for their last eye test
Figure 7: About the last eye examination, October 2016
Special deals and better staff encouraged switch of opticians
Figure 8: Reasons for switching retail opticians, October 2016
9% of all have ever had laser eye surgery
73% of adults use prescription eyewear
Figure 9: Users of prescription eyewear, October 2016
26% bought fashion sunglasses in the last year
Figure 10: Purchasers of fashion eyewear, October 2016
ABs and 16-34s are core customers for fashion sunglasses
Prescription glasses dominate the market
Figure 11: Purchases of prescription eyewear, October 2016
Specsavers is the most used optician
Figure 12: Retailers used for last prescription eyewear, 2014-16
9% are interested in ‘smart’ glasses
Figure 13: Interest in lens innovation, October 2016
People value professional fitting
Figure 14: Attitudes regarding opticians, October 2016
Target groups
Figure 15: Target groups for opticians, October 2016
What we think

Issues and Insights
What impact is online selling having on the market for optical goods?
The facts
The implications
Is laser surgery having an impact on the market for spectacles and contact lenses?
The facts
The implications
Will spectacle businesses get into the emerging market for wearable technology?
The facts
The implications

The Market – What You Need to Know
Consumers spend £3,067 million on optical goods and eyecare
Population growth will increase demand
Market for sunglasses shows steady growth
Innovation has helped to add value
Older customers will create more demand for services
More 25-34s boost demand for contact lenses
Improved consumer confidence
Market share gains

Market Size and Forecast
16.6% growth forecast between 2016 and 2021
Figure 16: Consumer spending on optical goods and services, 2011-21
Market growth of around 3% per year expected
Figure 17: Consumer spending on optical goods and services, 2011-21
16.5% growth forecast for sunglasses between 2016 and 2021
Figure 18: Consumer spending on fashion sunglasses, 2011-21
11% market growth without inflation
Figure 19: Consumer spending on fashion sunglasses, 2011-21
Forecast methodology
The impact of Brexit
Figure 20: Alternative market scenarios for the post-Brexit optical goods and services market, at current prices, 2016-21
Figure 21: Detailed post-Brexit scenarios for the optical goods and services, at current prices, 2016-21
Little change for shoppers
Consumers are already shopping savvily

Market Segmentation
Spectacles are 61% of the market by value
Figure 22: Consumer spending on optical goods and services, by category, 2016 (est)
Optical goods market by category
Figure 23: Consumer spending on optical goods and services, by category, 2011-21
Sales of progressive lenses now larger than bifocals
Figure 24: Spectacle lens purchases, by type, (numbers) 2016 (est)
Contact lens market up by 18.8% between 2011 and 2016
Multifocal contact lenses now 26% of new fits
Toric lenses have broadened the market
Rise of daily-wear lenses means lower demand for solutions
25% of contact lens wearers are part-time
Market dominated by soft contact lenses
Eye drops growing strongly from a small base
Eye examination numbers growing gradually
Figure 25: NHS sight tests, England and Wales, 2015 and 2016
Figure 26: Year-on-year change in NHS sight test numbers, England and Wales, 2011-16

Channels to Market
66% of the market captured by the top three opticians
Figure 27: Distribution of optical goods and services, by retailer, 2014 and 2016 (est)
Specsavers grows market share to 38.7%
Boots struggles in 2016, slipping to 14.6% market share
Vision Express adds 1% to market share between 2014 and 2016
Optical Express shifted its efforts to laser surgery
Supermarkets gradually expanding opticians’ presence
Ceiling for growth for supermarkets
Sunglass concessions and in-store opticians open in department stores
Online sellers
Figure 28: Distribution of optical goods and services, by retailer, 2012-16 (est)

Market Drivers
Ageing population expands audience for prescription eyewear
Take children seriously
Figure 29: Trends in the age structure of the UK population, 2016-21
Consumers showing strong levels of confidence
Figure 30: Trends in how respondents would describe their financial situation, September 2015-December 2016
High exposure to ‘blue light’ from personal technology
Figure 31: Personal ownership of consumer technology products, September 2016
Sunnier days boost sales of sunglasses
Figure 32: Annual sunshine hours, UK, by country, 2015 and decade average to 2015

Industry Changes
Ruling warns Boots on overclaiming benefits of filtering out Blue Light
Opticians could build Enhanced Optical Services (or MECS)
Community-based eye health is popular with patients
Employers’ requirements for VDU users

Key Retailers – What You Need to Know
Acquisition is an attractive strategy
Clear differentiation for the big chains
Joint venture partnerships
Hakim growing its presence
Luxottica Retail more than doubled sales between 2013 and 2016
Growth for supermarket opticians restricted by space available
Online sellers
Specsavers and Boots ahead on trust

Competitive Strategies
Sales growth of optical chains
Luxottica is the fastest growing
Specsavers expands its reach
Vision Express and Scrivens grown through acquisition
Figure 33: Turnover (excluding vat), selected optical goods retailers, 2012-15
Concentration of the opticians sector
Figure 34: Opticians, store numbers, 2013-16
Creating differentiation
Figure 35: Market positioning strategies, major opticians, 2017
Business models
Franchises, joint venture and non-core products
Hakim Group growing rapidly
Alternative places to buy optical goods
Online selling
Essilor expands in online retailing and merges with Luxottica
The march of the supermarkets
4,500 independents

Key Suppliers to Opticians
Essilor developing online businesses via acquisition
Essilor merges with Luxottica
Specialist spectacle lens suppliers
3D printing could be a disruptive influence
Sourcing shifting from China
Smart glasses in development
Suppliers of contact lenses and contact lens solutions
Sunglasses market dominated by high volumes and low prices

Launch Activity and Innovation
CrossEyes plans franchise expansion in the UK
Figure 36: CrossEyes, Richmond, 2017
Superdrug launches online opticians
Snap (formerly Snapchat) revives the idea of smart glasses
Figure 37: Snap smart sunglasses, 2017
Future trends for smart glasses
Figure 38: OrCam smart spectacles, 2017
Safilo developing wearable technology to improve mental focus
3D printing could revolutionise supply
Virtual ‘try-on’ will help online to grow
Screening schoolchildren

Advertising and Marketing Activity
Advertisers spent £56.5 million in 2016
Figure 39: Above-the-line advertising expenditure on optical goods and eyecare, 2013-16
The ‘big three’ dominate advertising spend
Figure 40: Above-the-line advertising expenditure on optical goods and eyecare, by company, 2016
Figure 41: Above-the-line advertising expenditure on optical goods and eyecare, by company, 2013-16
Advertising specifics
Specsavers continues its popular ‘Should’ve’ campaign
Vision Express strikes a serious tone
Boots’ feelgood advertising
Optical Express highlights surgery as easy and affordable
Nielsen Ad Intel coverage

Brand Research
Brand map
Figure 42: Attitudes towards and usage of selected brands, January 2017
Key brand metrics
Figure 43: Key metrics for selected brands, January 2017
Brand attitudes: Specsavers stands out for innovation, great customer service and trust. Vision Express is reputable and Boots is a trusted brand
Figure 44: Attitudes, by brand, January 2017
Brand personality: Specsavers’ personality is vibrant and fun, while Boots’ greatest strength is accessibility. Optical Express is tired and lacks appeal
Figure 45: Brand personality – Macro image, January 2017
Brand Personality: Specsavers is trendsetting and welcoming, while Boots is cutting edge, stylish and reliable. The weakest brands are Tesco (basic) and Optical Express (impersonal)
Figure 46: Brand personality – Micro image, January 2017
Brand analysis
Specsavers’ powerful image combining style and fun along with trust and great value creates broad appeal
Figure 47: User profile of Specsavers, January 2017
Tesco Opticians is accessible but basic, highlighting an opportunity to build a stronger image in the opticians market
Figure 48: User profile of Tesco Opticians, January 2017
Boots Opticians is trusted with a good reputation and delivers good service
Figure 49: User profile of Boots Opticians, January 2017
Vision Express appeals to young upscale adults
Figure 50: User profile of Vision Express, January 2017
Optical Express has highest appeal among affluent 25-34s
Figure 51: User profile of Optical Express, January 2017

The Consumer – What You Need to Know
Over half had an eye test in 2016
22% switched opticians for their last eye test
Young, affluent consumers most likely to have had laser surgery
26% bought fashion sunglasses
Prescription glasses dominate the market
Plenty of opportunity to increase sales values
The big three opticians face competition from supermarkets
Style is a key draw for spectacles shoppers
Professional fitting gives stores an advantage over online

Eye Examinations in the Last Year
57% of all had an eye examination in the last year
Figure 52: Eye examinations in the last year, 2014-16
Over-65s a core audience for eye examinations
Figure 53: Eye examinations, by age and socio-economic group, October 2016
9% of all have ever had laser eye surgery
Figure 54: Laser eye surgery, by age, gender, socio-economic group and financial situation, October 2016

About the Last Eye Examination
60% of eye tests were paid for by NHS
Figure 55: About the last eye examination, October 2016
22% switched opticians for their last eye test
Figure 56: About the last eye examination, October 2016
Special deals and better staff encouraged switch of opticians
Figure 57: Reasons for switching retail opticians, October 2016

Users of Prescription Eyewear
73% of adults use prescription eyewear
Figure 58: Users of prescription eyewear, October 2016
Over 75% of over-45s need help with their eyesight
Figure 59: Users of prescription eyewear, by age, October 2016
Demand for glasses will grow as the population ages
Prescription sunglasses no longer a luxury
More contact lenses suitable for over-45s
Comfortable eyes
Opportunity to expand contact lens wear
Figure 60: Users of prescription eyewear, glasses, prescription sunglasses and contact lenses, by age, October 2016

Fashion Sunglasses and Contact Lenses
26% bought sunglasses in the last year
5% claim to have bought fashion contact lenses
Figure 61: Purchasers of fashion eyewear, October 2016
ABs and 16-34s are core customers for fashion sunglasses
Figure 62: Purchasers of fashion sunglasses, by age and socio-economic group, October 2016

Purchasers of Prescription Eyewear
Prescription glasses dominate the market
18% of those with a prescription bought contact lenses
Figure 63: Purchases of prescription eyewear, October 2016
22% of wearers bought two or more products
Figure 64: Purchases of prescription eyewear, repertoire, October 2016

Retailers Used for Prescription Eyewear
Figure 65: Retailers used for last prescription eyewear, 2014-16
Specsavers is used by 49% of those who bought glasses
Vision Express captures 15% of contact lens purchasers
Independents used by those with healthy finances (14%)
Contact lenses (5%) more likely to be bought at online pureplay than glasses (2%)
Why online sales have not performed better
Tesco outruns Asda
Figure 66: Retailers used for prescription eyewear, October 2016
37% of those who switched from another optician bought at Specsavers
Figure 67: Retailers used for last prescription eyewear, same or switched, October 2016

Interest in Innovation
39% of 16-34s are interested in reducing digital eyestrain
18% would like a blue light filter
41% of over-65s interested in multifocal spectacle lenses
22% of younger Millennials interested in smart connected glasses
More opportunity to add value to spectacle lenses
Interest in photochromic lenses is high
Figure 68: Interest in lens innovation, October 2016

Attitudes Regarding Opticians
Style comes above price when choosing glasses
Desire for fitting services will keep people away from buying online
Some will be lured to buy online to make savings
23% like the idea of a self-test app for eyes
30% delay an eye test until they think their eyes have changed
26% believe independents look after eyes better
Barriers to wearing contact lenses
Laser surgery is a key competitor to contact lenses
Figure 69: Attitudes regarding opticians, October 2016
Target groups
Figure 70: Target groups for opticians, October 2016
Expertise matters more as consumers age
Figure 71: Target groups for opticians, by age, October 2016
Cost Conscious attracted to buy online
Figure 72: Target groups for opticians, retailers used, October 2016
Brands Matter display lowest loyalty to opticians
Figure 73: Target groups for opticians, switched/used the same optician, October 2016

Appendix – Data Sources, Abbreviations and Supporting Information
Market sizing and segment performance
Abbreviations
Consumer research methodology

Appendix – Market Size and Forecast
Market forecasts by segment
Market forecast – Spectacle frames
Figure 74: Consumer spend on spectacle frames, 2011-21
Figure 75: Consumer spend on spectacle frames, 2011-21
Market forecast – Spectacle lenses
Figure 76: Consumer spend on spectacle lenses, 2011-21
Figure 77: Consumer spend on spectacle lenses, 2011-21
Market forecast – Contact lenses
Figure 78: Consumer spend on contact lenses, 2011-21
Figure 79: Consumer spend on contact lenses, 2011-21
Market forecast – Contact lens solutions
Figure 80: Consumer spend on contact lens solutions, 2011-21
Figure 81: Consumer spend on contact lens solutions, 2011-21
Market forecast – Eye examinations
Figure 82: Consumer spend on eye examinations, 2011-21
Figure 83: Consumer spend on eye examinations, 2011-21
Market forecast – Eye drops
Figure 84: Consumer spend on eye drops, 2011-21
Figure 85: Consumer spend on eye drops, 2011-21
Forecast Methodology

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