VCPN INTERVIEWS HILCO VISION CEO ROSS BROWNLEE TO LEARN HOW THE COMPANY FOCUSES ON NON-CORE PRODUCTS TO ENABLE ECPS TO ADD TO THEIR OFFERINGS WHILE BOOSTING THEIR BOTTOM LINE.
JOHN SAILER: What is Hilco Vision’s strategy for dividing its products into various categories?
ROSS BROWNLEE: The revenue stream for an eye doctor is typically composed of 95% frames, lenses and contact lenses. Hilco Vision operates primarily outside that core, with a deep expertise in differing but more niche categories encompassing optometric supplies, professional tools, personalized lens care, consumer accessories and vision protection (safety and sport Rx frames).
Whether addressing the supply needs of a practice to run smoothly, or over-deliver on compliance standards for sport Rx sunwear, our intent is that a practice should not have to dedicate 20% of its time to manage the complexity that comes in these non-core areas. If we are doing our job well, the ECP can have confidence to increasingly lean on Hilco Vision in these areas allowing them to focus on patient experience and revenue within the core product categories.
SAILER: Makes sense, and that places you in a unique position to see what areas are growing. Based on this, what recent observations can you make about the overall eyewear and eyecare fields?
BROWNLEE: Professional supplies represent a very stable component of our revenue. They don’t grow with great dynamism nor really drop in times of trouble. There’s a consistent need for those professional supplies, and Hilco Vision is very focused on providing a single sourcing point in that area.
We see a lot of growth in items like Rx sport, Rx safety frames and consumer accessories because while they are historically not a big focus for our customer, the ECP is obliged at the moment to look for creative ways to supplement revenue. Success for any retailer is a function of traffic that comes through your door, the amount of that traffic you convert, or the average basket size. We can help increase the average basket size and conversion.
Look at consumer accessories, for example, buying a fit-over sunglass. If someone has just spent a decent amount of money on a progressive frame, they might not be willing to have that same progressive prescription put in a sunglass; Jonathan Paul Fitovers are a great opportunity to have that great vision experience extended to optical quality polarized sunwear without compromising design.
SAILER: Which of your products are among the most popular and why?
BROWNLEE: There is a distinction to be made between “wants” and “needs.” High usage supply items such as tropicamide and phenylephrine are essential daily needs in any optometric practice. Hilco Professional tool products are consistently popular but with comparatively lower usage as our tools truly stand up to the test of time. Increasingly, however, consumer “wants” such as Croakies eyewear retainers with high consumption rate, an affordable insurance policy on a frames investment for the patient but a nice add-on to any frame sale for the ECP.
SAILER: So you’re venturing into new categories?
BROWNLEE: We reach over 25,000 customers in the U.S., but we reach them with different categories within our overall offering. The professional product category might be carried by most, while the consumer accessories category might only be carried by a portion thereof. My goal is to increase the awareness of the breadth of offer that we have as that just enhances simplification for the ECP. All of our customers buy multiple categories but in different combinations.
SAILER: You mentioned Croakies and Jonathan Paul Fitovers. Can you further discuss these products and their categories?
BROWNLEE: Those are the two most critical and recent product introductions at the company level. The market right now in every category, whether it’s frames or sunglasses or even consumer accessories, is craving authentic products. They’re craving originals…innovative originals. This drive toward authentic brands as opposed to “me too” brands is more powerful than ever before. This is why when we looked at consumer accessories, we wanted to go to the creators of the category and make those originals contemporary. Translating that to a contemporary environment is driving much of our commercial thinking right now.
We’re very excited about what we can do with Jonathan Paul Fitovers in terms of making that message increasingly relevant and have a broader audience, leveraging Hilco Vision’s reach.
The same is true for Croakies. It’s the original retainer, celebrating its 40th anniversary this year, and we want to celebrate that authenticity and broaden that to make it relevant to new demographics.
They both have the opportunity to go global, and we as a company have been spending a lot of effort in the last two years creating a global footprint. We acquired a company in Germany, two in the Netherlands and one in Hong Kong on top of our pre-existing international operations in Australia and the U.K.
Whether customers are global or local, our solutions are not constrained by geography, and now Croakies and Jonathan Paul can travel beyond borders.
SAILER: What other plans are on the horizon?
BROWNLEE: We are completely focused on taking away our customers pain points in non-core categories, and select acquisitions are enhancing our competence either within categories or in opening new geographies.
A critical enabler in helping customers navigate our offer and facilitate consolidation is our investment in digital. Whether it’s the new website offering customized, tailored promotions and benefits per customer, or whether it’s microsites that can allow regional chains to be able to manage what their individual store members are buying and allowed to buy from Hilco Vision, this allows freedom within a framework for regional chains or for optical stores with more than one location.
SAILER: So you’ll work with the headquarters of a regional or national chain and then each individual store can order independently.
BROWNLEE: Each individual store, based on the rules set by headquarters, has freedom to manage that non-core part of the business, but there is still sufficient visibility and control as to what’s determined at the parent level.