Curating frames is an art, while managing their sales is a science; here’s how to combine the two to ensure that your optical is consistently as profitable as possible.
How would you care for $30,000, $40,000 or $50,000 worth of artwork on the wall in your home? Very carefully, right?
The average practice has art on its walls too – in the form of frame inventory – often in the $40,000 range. What is your strategy for caring for and curating your collection?
LET’S TALK ABOUT ART
In the case of frames we are seeking to tell a story through the brands that we carry. To do this well you need to ask yourself, “Who do I want to be?” The answer is different for every practice. For a practice that is 60% driven by vision plans, then a mix that is profitable within those plans is necessary. It is necessary, however, to also include a combination of higher end frame brands so private-pay patients feel they received good value as well.
The average practice will have 900 to 1,000 frames. A minimum of 800 is recommended. We have found that low selection translates to low capture rate.
When you invest in a frame brand, own that brand. Have 30 to 40 pieces for both men and women that showcase the selection. This gives patients confidence that you believe in the brand as well; if you trust the brand, they can too.
Many practices separate the men’s collection from the women’s collection, but this diminishes the value of the brand you invested in. Tell a complete story by merchandising all the frames from one line together. This sends a more powerful and confident message. Add signage to drive home the brand and tell the story. When you consolidate brands you become a more important customer to that brand, and that loyalty will pay off.
When you go to your favorite museum you may notice that different collections will be featured, and pieces will move from time to time. The same approach is important for your frame collections. Occasionally moving frame brands from time to time will keep their appearance fresh in your practice.
LET’S TALK ABOUT SCIENCE
Art often draws an emotional response. We often can get caught up in the emotion of a piece. This holds true when purchasing frames. What’s more, the people who make the purchasing decisions, our salespeople, are emotional by nature.
We do need to know what our salespeople are seeing and hearing from patients. Keeping up with trends is important too. But ultimately, the collection of frames we are curating is a business decision. If 50% of your office is dedicated to optical, then 50% of your rent is warehousing frames. Those frames need to “earn their keep.”
Measure your turnover rate quarterly. Take the number of frames sold per quarter and multiply that by four, one for each quarter, to get the estimated number of frames you will sell in a year’s time. Then divide that result by the number of units you keep in inventory. For example, if you sold 10 of a specific brand of frames in the first quarter while keeping 20 in inventory, the formula would be: 10 x 4 = 40 yearly units; 40 ÷ 20 = 2, which is your turnover rate.
We are looking for a turnover between 3 and 3.5. Therefore, the brand in this example is underperforming. Based on which brands are underperforming or overperforming, your frame board metrics will help you make better decisions on the brands to keep, expand or retire.
The trick to doing this well and really knowing your numbers is to keep the same number of units in inventory for six months. That base line will help keep the data consistent.
When you measure by brand, over the course of a year a story will emerge. You will see which brands are moving and which struggle. You may notice that a specific location of your optical is a “premium space” and moving a struggling brand to that prime real estate will help it achieve the goals you set.
|WHAT ABOUT SUN?
First, you need to decide if you are going to be in the sun business or not. Going half way with sun is a recipe for failure. Having six or seven lines and offering six to eight pieces for each will result in near zero sales. At a minimum, pick two lines and have 40 to 50 pieces for each. Is that a big commitment? Yes, but that is what it will take to be successful with sun.
YOUR CURATED COLLECTION
Consultants in the area of frame board management can offer excellent advice on how to get started. The key though is consistent measurement, and software is available to aggregate your metrics to help you do this.
Supermarkets measure the success of products on their shelves by looking at sales per square foot. You too need to remember you have tens of thousands of dollars in inventory, plus rent, invested in your frame collection. Keep measuring so the frames will keep moving!
Evan Kestenbaum, MBA, is chief information officer of GPN Technologies, providers of EDGEPro eyecare industry analysis software, and co-owner and business manager of Optix Family Eyecare in Plainview, NY.