Question

Topic: Strategy

Marketing Ideas For Discount Retail Optical Stores

Posted by cambridge on 11/13/2006 at 2:30 AM ET 2500 Points
I would be grateful for suggestions for how we might better position a new discount retail optical store (which we hope to grow into a chain of stores), to differentiate our business and service offering. What should we be offering-- what can we say and do and how should we say and do this--to better position us in the marketplace?

The stores will be approximately 3500 to 4000 square feet in size and located in suburban strip shopping centers in the Southwestern U.S. We expect to enter the market gradually- with one or two stores in each area that will need to stand on their own success and enable us to grow over time. We plan to target mid-size cities with populations of 80,000 to 500,000, which will typically already have some (but not an abundance of) competitive stores. Stores will be full service, including an optometrist and optical lab on premises, and offer one hour service. They will also offer a large selection of eyeglass frames, including many designer brands, at prices that are significantly lower than other optical chains. Typical price points for eyeglass frames will be $25 to $70. Contact lenses will also be sold at very competitive prices.

The stores’ hallmarks will be personalized service, glasses prepared in one hour, large selection of frames, low prices and great quality, with satisfaction guaranteed.

I would be grateful for any ideas and suggestions relating to marketing strategies, articulating our positioning, customer acquisition and retention, etc.
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RESPONSES

  • Posted on 11/13/2006 at 2:44 AM Accepted
    Well you should select one parameter- say 1 hour turn around time as your USP. Position the store around turn around time and make all the marketing material, advertisements etc around the 1 hour timeline.

    Have in-shop cafes and reading corners to spend this 1 hour.

    To start with and get good PR at each local store opening- have a senior citizen free check up. Tie up with some local school - distribute coupons to students for free eye check up. Sponsor a local teen beauty pageant with your contact lens brand.

    Also, make sure that for a discount store you always have deals and promotions galore:

    1. Buy one pair of eyeglasses-Get the second pair FREE
    2. Pay just $29.00 for your next Eye Exam!
    3. 20% off on eye glasses set or second pair of eyeglasses free with single vision special selection only etc etc



  • Posted by wnelson on 11/13/2006 at 8:26 AM Accepted
    The optical industry is very difficult from two dimensions: Competition and insurance. From a competitive standpoint, you have many well established chains already and many more "mom-and-pop" shops all around. The market is very mature and everyone has already established the obvious differentiators like "One Hour Service." What would be different about your One Hour Service?

    Insurance makes it very difficult. Optomologists make about $45 per patient for an exam. That's it. Vision insurance is a loss-leader for the insurance industry. What they have been doing is buying optician companies and making the patients send away for the frames and lenses. The optometrists have a "display case" of frame choices, write a prescription, and send it away to the place specified by the insurance. Of course, you can offer "up-selling" and get the patient to pay out of their pocket. But, then we get back to the differentiating.

    I suggest you back down from "Urgent," step back, and take a look at the market before you proceed. This is not a marketing problem in the sense that we can come up with catchy tag lines, ad content, PR, and events. This is a business problem. You need a solid strategy to proceed. Here are some steps in developing your marketing strategy:

    MARKETING STRATEGY
    The strategy consists of two steps - analysis and direction setting

    • analysis
      • Customer and Market
        • who are your customers? what are their needs?

        • what are the influencers in the part of the decision process - those words and images that affect the emotional part of the decision making process?

        • what media do they go to to find out about your products and services to satisfy the intellectual part of the decision process?

        • how would you divide these customers into segments so you can focus on the segment that best matches your capabilities to satisfy their needs?

      • Competitors (this is really key to your problem!)
        • what are their strengths and weaknesses?

        • how well do they satisfy the customers' needs and where do they miss?

        • take a good look at how the competition is organized around the insurance industry and how the insurance IS your competition. How do they meet and fail to meet the customers' needs? What is their effect on "independents?"

      • Your Company (also very key to your situation!)
        • what are your strengths, weaknesses, opportunities, and threats?

        • what are your core competencies - what do you do better than anyone else in the industry?

        • what are your unique selling points (USPs)

    • direction setting
      • Competitive Actions
        • how can you leverage your strengths to exploit your competitors' weaknesses?

        • how can you make your weaknesses into strengths?

        • how can you recast your competitors' strengths into weaknesses?

      • SWOT Actions
        • look for actions where strengths align with opportunities - these are the "base strategies" and you should spend most of your time/resource executing these actions

        • where weaknesses align with threats, develop actions to overcome the weaknesses - these are "survival strategies" - spend much time and resources here.

        • where weaknesses align with opportunities, develop plans to overcome your weaknesses and these become "expansion strategies." Use your "leftover" resources here.
          where strengths align with threats, develop plans here and monitor - these are "defensive strategies"

      • Product/Service Strategy
        • Given your customers' needs, your core competencies, your unique selling points, and your competitors' strengths and weaknesses, develop a product/service strategy to take advantage of your strengths to satisfy customers' needs better than your competitors

      • Position Statement - develop a statement for guiding your marketing activities:
        • Placement within a market segment – In which segments does the product/service play?

        • Placement of the product relative to other products/services categories and application – What are upstream and downstream in the supply chain with respect to the product/service? Is the product/service high value or low value with respect to other product/services used by the customers?

        • Placement versus competitors' products/services – How well does the product/service satisfy the customers’ needs versus the competition?

        • Placement of the product/services in terms of features and benefits - Is the product/service high performance or basic in features and benefits? What is the value proposition for the product/service versus the competitors?

        • Placement in the sales channel – How is the product sold by whom to whom?

        • Placement in the minds of decision makers and influencers – For those who make the “buy” decision, is the product/service critical or a commodity? Does it represent a major determiner for success and therefore involved in a major part of their daily activities for buyers and influencers?

      • Brand Strategy - Develop brand rules (this will help you look professional to combat this Goliath):
        • Name (both company and product/service)

        • Logo

        • Product/service characteristics - colors, features, quality

        • Packaging and packaging characteristics (colors, font styling, logo and logo placement)

        • Tag lines


I hope this helps.

Wayde
  • Posted on 11/13/2006 at 12:30 PM Accepted
    It appears that the key word in your plan is "discount". So you can go in and establish a bare bones price position. But in general those who are already there can match you and put you away fast with a few well timed discount mailings and promotions. So instead of saying, we are cheaper, you think of a different benefit:

    Two new you's. Come buy two new looks...ie, buy two pairs -- an everyday pair and a cool pair for socializing.

    Also, I have been to a number of places and the personal service is nice. A manager has done well to go the extra mile with our family -- working hard to get my son into the right kinds of sports glases, etc. I won't go into unnecessaary details, but they did more than was required and it was helpful in keeping our repeat business.

    But most places are focused on what they sell instead of what some customers want to buy. They need to see better, but they want to look cool.

    I can tell you as life-long wearer of glasses something that has always annoyed me. You go to get glasses. You try on new frames. There is no correction in them. You look in a mirror. If you are requiring a lot of correction, you cannot see yourself. It is all a blur. So you cannot see what you are buying and you are either taking orders from your spouse or you are listening to some stranger tell you what to wear on your face for the next year or two.

    Better to take a picture of my face in the store. Let me play with a computer with different frames. Your service people can still give me advice, we can do it together, but I can see for myself how others will see me. That would be kind of neat, and maybe I would buy two pairs, or a pair of sunglasses to with with the regular ones.

    Just a few ideas. Good luck to you.
  • Posted by cambridge on 11/13/2006 at 3:10 PM Author
    Thank you all for your excellent comments and suggestions.

    To answer some of the questions that have been posed (as well as perhaps raise others), my decision to enter this space has been predicated on experience working with other optical chains and large big box stores.

    I have found that, particularly in smaller cities, there seems to be a market opportunity for stores that focus on the lower price points. The big box retailers --Walmart, etc-- are active in this space, but tend to offer smaller selections and a more impersonal service environment.

    On the insurance question, I have established accounts with the major vision insurance plans.

    The customer segmentation and targeting question has been somewhat difficult for me to address. I recognize the importance of this exercise, but am not sure how I would do this beyond stating that our target market comprises customers who would like to get an excellent deal on their glasses, personalized service, and glasses in one hour or less. Our customers would also likely reside within a three to ten mile radius of our store (depending on our location vs. a vs. any competitors). Beyond noting that fashion forward consumers or people who desire high end designer frames are not our target market, I'm not sure if or how I would define or target our market more closely.

    I am also not sure that it would be beneficial to select a narrower target market, given that our customers will likely live or work within a small radius from our location and that our stores will be based in smaller cities. Selecting a narrower market under these circumstances may reduce our revenue base to unprofitable levels. We may need to segment our market and create different appeals for each segment. I would be grateful for any suggestions on how I should approach this.

    Chrissie's response about e-marketing raises an interesting question: is e-marketing effective for real-world retailers who are targeting discount-oriented (and perhaps given local demographies, lower-income) customers? Full page inserts and coupons in Sunday newspapers seem to comprise the bulk of the ad spend by other optical stores. I would be interested in your thoughts on this as well as other advertising vehicles.

    Thank you again for your responses and suggestions. Please keep them coming.
  • Posted by cambridge on 11/13/2006 at 5:20 PM Author
    Thank you, proeditor.

    If we offered a guarantee offering your glasses free, if they're not ready in an hour, would this attract customers' attention and merit visiting our store? Is this a USP we could build our store around or are we better off focusing on other dimensions--designer frames for less, experience marketing-- along the lines of many of the responses above?
  • Posted on 11/13/2006 at 9:23 PM Accepted
    I have never heard of the computer thing to try on different glasses but am guessing it is out there some where.

    Mirror Mirror on the wall, who's the...

    Or,

    Icansee! Lookatme!

    Rita, maybe your math wizard can also write code and you and Cambridge can hook up and differentiate his stores with a social website for trying on eye glasses.

    Seriously, tho, shopping for glasses is not fun. If you can put fun into and and still be inexpensive but high quality, you might have a good point of difference. When you are a huge success and multimillionaire franchiser, remember us with stock options.

    Cheers!

  • Posted on 11/15/2006 at 3:46 AM Accepted
    Hi

    You plan to offer stuff on discounts specifically to target mid sized town populations who are not really willing to pay too much for something like glasses. This means that you are being their "friend" and respecting their values and making stuff affordable according to their own needs.

    Since you are being empathetic to their needs and budgets, you are close to these families and can thus position yourself as a store "close to the hearts of families" or a "complete family store".

    Giving discounts is one way of achieving this and that is what you already intend to do. Apart from this make your store look family friendly. Introduce schemes where customers can become members of your stores and then get discounts on future purchases. You can award them points equal to 10% of the purchase that they have made. Members could encash these points for future purchases from your store. This way you gain their loyalty and also make them come back again not only for purchases but also services. You could call your members "family members of the store" to drive the family store concept even more.

    Frequent cards on christmas and new year and birthdays etc to your members make them feel you are with them and for them always. Do that.

    Make your employees very empathetic to the customers so that people get a feeling of comfort and oneness even when they talk to your employees at the store.

    A complete family store that makes stuff available at affordable prices and is with you always looks like a decent positioning to me.

    Looking forward for your feedback so that I can try to help you in a more meaningful way.

    Best of Luck!
  • Posted by wnelson on 11/15/2006 at 9:35 AM Accepted
    You state: "I have found that, particularly in smaller cities, there seems to be a market opportunity for stores that focus on the lower price points. The big box retailers --Walmart, etc-- are active in this space, but tend to offer smaller selections and a more impersonal service environment." I'm concerned for you in this venture. I am reading and seeing conflicts in what you are trying to do. The market on the "low price point" side is crowded and differentiation is low. If the answer to the problem is so simple as "provide more selection and more personal service" it would seem that at least one of the outlets would try to drive this home - at the very least in advertising. Sears and Walmart marketing professionals aren't exactly uninitiated in the craft and understand positioning very well.

    The reason the stores associated with major retailers like Walmart and Sears have smaller selection and more impersonal service could be that at the "low price point" end of the market:
    1. The customers don't care because price is their key differentiator, not selection and service

    2. The costs associates with inventorying (space and inventory carrying cost) more selection is too high to be at the low cost end

    3. They are focusing on volume and low cost and more personal service costs more and slows them down.

    Price leader strategy dictates you are also the low cost leader, or you don't survive. To be low cost, you have to have a cost conscious culture in every step of your operation. This is 180 degrees away from the Differentiated strategy - which concentrates on high value added.

    Besides that, it's all about what the customers want, not what you see individually and think is the case. You can do the customer analysis now and invest wisely given the results or you can roll the dice and hope you have it right. If you roll the dice, you may hit it or you may find out you missed and have to put more money in to fix it...if you can get more money. Classic "pay-me-now, pay-me-later" scenario.

    Wayde
  • Posted on 11/15/2006 at 12:54 PM Accepted
    I would start with a model like Costco. The only thing you have that they don't is 1 hour turn around time. That is if you truly are a discount provider. Frankly I find the Optical industry to be a huge scam. If you can instill a sense of faith and trust in your customer you will be miles ahead of the competition. I can get a pair of Dolce and Gabanna glasses with UV coated, scratch resistent lenses at Costo for $144.00. Beat that with one hour turn around. I'll never shop anywhere else. The eye exam is $95 for contacts, $75 for glasses. My contacts were $64 for an entire year of disposables.

    It would have cost me 3 times that at Lense Crafters, and all the other mall scammers optical shops.
  • Posted by cambridge on 11/15/2006 at 6:33 PM Author
    Thank you all once again for your excellent suggestions and advice.

    If I was to summarize some of the things I have been hearing (if only to make sure that I am reading/listening correctly):

    1. Pricing should be readily understandable and transparent --to establish and strengthen customer trust and relationships. We should also offer easily understandable collateral materials and take the time to educate customers about the differences in the various types of lenses available to them. There is a perception among some consumers that optical stores engage in bait and switch tactics. We will need to prove that we're different.
    2. Customers at all price points are fashion conscious with regard to the frames they put on their faces. We should offer and advertise designer-look alike or designer frames at discount prices.
    3. A new discount retail optical store will need to address customer concerns about the quality of the frames and lenses being sold. Offer top quality, name brand lenses to allay this.
    3. Create positive experiences that make the shopping experience easier as well as more entertaining, including Jamie's suggestion of taking pictures so customers can see what they look like in different frames. I have seen this used in a few stores, but they don't seem to advertise the service, perhaps out of concern about tying up salespeoples' time when there are several customers waiting to be served.
    4. Advertising -newpaper, direct mail, billboards, email(?)- should incorporate continuing communications and discount price offers.
    5. Reaction on this forum to the importance of the one hour feature seems to be mixed, with some suggesting this would be a great selling point and others dismissing it as a gimmick stores offer but don't live up to. (Which leads us to the question, would this be important if it wasn't a gimmick?)

    This brings us to Zahid's and Wayde's recommendations about understanding our customers' needs and wants before we move forward. As I had noted in my previous response, I am in accord with the theory but unsure how I should go about doing this in practice. Please see the earlier author response I had posted.

    If I'm not asking too much, please indulge me by continuing to keep your ideas and suggestions coming. They have been exceptionally helpful in shaping my thinking. I am truly very grateful to each of you.
  • Posted on 11/18/2006 at 3:16 AM Member
    hello,

    i have some ideas that might help just give me some time before you close the question because i cant write them now...

    i will get back in the afternoon..

    Thank you
    shouq
  • Posted by cambridge on 11/19/2006 at 2:46 PM Author
    I continue to be overwhelmed by the incredible depth of kindness and help I have received on this forum.

    To respond to some of the more recent postings:

    Molly, thank you for the suggestions on targeting ads to different customer segments as well as web-based marketing and referral programs. Mike Page's post contained links to some terrific websites by optical stores.

    Karen and Kathy both highlighted the critical importance of training sales staff to listen to customers and enabling them to assist customers in choosing frames that are right for them. Continuing education programs and weekly sales meetings will need to be a key component of our stores' operations. Each new shipment/style of frames will also require our working with our sales staff to ensure all of us understand styles that will serve particular needs and personalities. Follow up telephone calls and emails by sales staff to customers 2 to 4 weeks after their purchase will enable us to better guage how we're meeting our customers needs with our recommendations.

    Karen, thank you again for all of your advice. The LensCrafter -style absolute guarantee is certainly the way to go for us--particularly given our focus on smaller markets, where reputation, word-of mouth and referrals will be key to our success. We had planned on offering contacts at online prices, but will take up your suggestion of advertising this more extensively (including on the web). We should give people the ability to order online (as they have become used to elsewhere), but enable them to pick up lenses at our store --providing them with quicker service than other online retailers can offer. I had seen the Consumer Reports article but am glad that you prompted me to read it again.

    Thanks again for all your help. At Shouq's suggestion, I will continue to keep this question open for him as well as others.
  • Posted by cambridge on 11/21/2006 at 11:02 PM Author
    Thank you all once again for taking the time to share your thoughts and advice. I am indeed very grateful. Your suggestions will go a long way in helping us develop and implement our marketing strategies.
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