It is Wednesday, November 9, 2016, and the United States has just elected its 45th President.
As we prepare to enter the New Year, how that single event will impact the optical industry remains to be seen. Certainly, the pediatric provision of the Affordable Care Act could be in jeopardy, and trade pacts with Asian countries (think eyewear from China) may become onerous.
In addition to these global scenarios, there are many others that are endemic to vision care that bear watching:
The Changing Picture of Optometry. The Boomers are selling their practices and the Millennials are entering the profession. Those who are exiting are frequently selling to large, well-capitalized “roll up” organizations. From an investor’s perspective, optical is a great story: a growing, aging patient base; premium products that yield good margins; and a relatively unconsolidated retail landscape.
The graduating Millennials are frequently foreign-born women who are less inclined to work in a traditional “retail optometry” environment (although burdensome school loans may require it for a time). These new ODs, in general, are more interested in medical optometry and less interested in spending their days in dark refracting lanes.
The Managed Vision Care Juggernaut. Managed care will continue to dominate the vision correction space, covering more lives and representing an ever-growing share of practice revenues. Managed care providers will continue to seek new revenue streams in the form of product offerings and online services. Those who can work within the managed care parameters will thrive.
The Consolidation Continues. The strong “optical story” will continue to drive the acquisition and consolidation craze, as capital-intensive and public companies amass market share and enter complementary product and distribution categories. In addition to retail, product suppliers, wholesalers and buying alliances will be ready targets for the money folks. For those who presume that government will soon intercede in these activities, think again. Unless the vision care consumer is disadvantaged in some way, government is not interested.
It’s the Technology, Stupid! In the end, it’s what really drives the industry. Products that offer improved performance, unique features and benefits and consumer-centric appeal are on the horizon, and they will come to market at a faster clip than ever before. Many will represent paradigm shifts, such as new protocols for dealing with basic vision correction problems (like presbyopia and digital eyestrain). Manufacturing processes will be refined and accelerated by 3D printing, a still very formative technology.
We may be peering ahead with some degree of trepidation, but for the brave and nimble among us, 2017 holds much opportunity.
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