Frame inventory
Develop partnerships with vendors who are knowledgeable of optical shop needs
Dispensing Solutions
Ten years ago, I wrote an article on inventory management for an educational magazine. The article began like this: Everyone agrees times are tough and yet there are optical retail shops that are seeing stronger sales than ever. Do they have a crystal ball? Or are they simply working smarter?
The rocky economic ride to which we were referring is certainly a factor today. This, of course, makes customer and inventory knowledge essential to grow our optical retail businesses. Despite the ups and downs in the economy, there is still tremendous growth potential because of our ever-changing demographics-the vast majority of baby boomers are presbyopic; LASIK and refractive surgery patients will become reading and sunglass customers; and eyewear and sunwear in general are on the rise as fashion accessories (whether prescription or not).
For those of you who are already operating an optical retail shop, it is not necessary to go through the basic steps of a demographic study. Instead, ask yourself this question: how often do you review your findings from the original demographic study to see if your inventory is continuing to hit the target?
Review capture rate quarterly
I asked this question of six members of the American Association of Dispensing Ophthalmologists (AADO) to see if we could reach a conclusion on the timing for this exercise. The results: the consensus finds reviewing demographics in the ever-changing 'retail world' to be an ongoing process. One of the most effective ways to determine if your inventory is 'hitting the mark' is to review your capture rate quarterly.
Operating a retail business is challenging. Researching your market and observing other retail establishments can provide a wealth of information. Focusing on the following topics can put you light years ahead of your competition.
How should we allocate space to maximize sales? 'Real estate' in your optical retail location is valuable. Take the time to understand your 'flow' of traffic. The best product available will not perform to its potential in the wrong location. Why We Buy by Paco Underhill provides an insightful look at the 'art of shopping' and is a valuable read for anyone operating a retail business.
What merchandise should be featured in windows or premium locations throughout your shop? How often should they be changed? Your demographic research will help guide you to the answers here. Your vendors should provide you their 'target market' information for a collection or brand. Make sure your relationships with vendors are partnerships, not simply someone from whom you purchase a product. 'Partner' as defined in Webster's dictionary is 'a person associated with another in a business arrangement on the same team.'
Are you making the most of the products you carry? A knowledgeable staff (including yourself) is invaluable. Consumers are confused these days. Answering questions knowledgeably on pricing differences, quality, and material choices will differentiate you from your competition.
As with any retail location, the inventory mix is your lifeline. I asked our AADO panel:
* How often do they review this mix?
* What information do they take to a vendor meeting?
* What do they expect the vendor representative to bring to the table?
Michael Horan Jr., affiliated with Stephen Sullivan, MD's Eye Health Vision Centers (in Rhode Island and Massachusetts) offers this insight. Eye Health Vision Center utilizes a planogram inventory system. In addition, the center works with a limited number of vendors. A committee consisting of the frame buyer, store manager, and the regional manager meets with vendors monthly. During this monthly meeting, they focus on selling performance, any retired product, and the consistency of their overall board mix. The vendors are expected to offer statistics on their 'top 20,' information on new collections or additions to current collections, and recommendations from these two categories for any inventory adjustments that should be made.
In addition to the sales statistics they bring to the table, Dwayne B. Baharozian, MD, from Family Eyecare Center, Westford, MA, requires the representatives calling on his practice to be knowledgeable of the marketplace and its needs, and to facilitate efficient transactions with their respective companies, whether it be receipt of new product or the return of a retired item.
A partnership
Never assume. Please take the time to have a business discussion with each of your vendors. Let the vendor representative know what you expect. Ask questions and understand the policies of the companies with which you are doing business. Again, partnerships that are entered with an open dialog and understanding of each other have a much greater opportunity to succeed.
Among the AADO panel surveyed for this article, there is an interesting mix of practices and optical retail locations. Each has different expectations in regard to turning over inventory.
Turning over inventory
Martin Wilson, MD, and Katherine McNelis, COA, specialize in pediatrics at Kids-Eyes Inc., Devon, PA. The turns in an optical retail location specializing in products for children will be lower than the average adult shop. About one to two turns per quarter for their shop is adequate, noted McNelis. In fact, they know that their inventory is on 'target' with their customer base because they frequently hear that the product mix is 'the best' their customers and their parents have ever seen. In addition, opticians from other practices often will refer their young patients to Kids-Eyes; there is no better testimonial to a great product mix than referrals from your competition.
Jim Meyers, OD, expects the entire inventory to turn at least four times per year. Each vendors' sales are evaluated; these evaluations are the basis used for the allotment of board space a vendor will receive.
Vincent Young, MD, and his optician Donna Davis, ABOC, strive to offer the most diverse product mix to their broad patient base at Albert Einstein Medical Center, Philadelphia. Dr. Young and the optical shop staff look for a 'successful style' to produce a minimum of two turns per week. Davis said that Dr. Young expects to be informed on issues involving the optical shop and for the shop to offer enough variety to please their diverse patient base.
Dr. Baharozian expects the most popular styles to turn six to 12 times per month. The necessary, but less popular styles should turn three times per month.
'We drop-ship all frames directly to the lab (rather than physically removing them from inventory) to ensure the entire inventory of popular frames is available for viewing at all times,' he said. 'I am confident that adopting this 'inventory attitude' has allowed the practice to achieve these types of turns.'
Visual merchandising
The AADO panel provided tips about visual merchandising.
Horan summarized the philosophy of Dr. Sullivan's optical retail shop: Keep it simple. Group your product by categories and collections. Remember too many point-of-purchase (POP) displays create confusion and clutter. Keep it clean, simple, and organized.
Dr. Meyers, affiliated with the Arkansas-based Boozman-Hof Regional Eye Clinic, pointed out the need for the consumer to understand that the retail shop is competitive in both selection and pricing of product.
Dr. Baharozian stressed that the shop should be inviting and appealing, premier product should be showcased in prominent locations, frame boards should be fully stocked and organized, your staff should be helpful and friendly, and everyone on your staff, including the physician, should be wearing the most current styles.
McNelis added that organizing the product by brand and/or type, such as sun/sports with visual aids and POP displays from the manufacturer, enables the consumer to understand what he or she is seeing. Keeping displays fresh and organized and, of course, changing displays seasonally will make this easier.
Offering patients the convenience of an on-site retail optical shop is a decision many practices are making. The time and energy you and your staff have spent providing the highest quality eye care can come full circle by making this decision. The result is, of course, the combination of the best eye care and the best, most appropriate eyewear.
As is true with any retail establishment, offer a variety of well-merchandised products and invest in a knowledgeable sales staff to assure your patients do, in fact, become satisfied customers.
[Sidebar]
Top 10 tips for displaying frames
1 Research and understand the 'flow' of your shop. This is the traffic or shopping pattern most often observed.
2 Utilize the point-of-service (POS) and point-of-purchase (POP) elements offered to enhance your top collections.
3 Maintain complete collection offerings on display. One or two pieces missing from a display can offer a confusing message, either 'the best shapes are gone' or you are selling out of an older collection.
4 Every frame you offer in your optical retail shop should be kept clean and in standard adjustment.
5 Your sunglass offerings should be maintained year-round. There is no season for eye protection and the comfort the right sun lens can provide.
6 Take a walk through a moderate- to high-end anchor or the cosmetic department to understand the impact of 'brand merchandising' or the more popular new term, shop in shops. Repeat these easy-to-understand concepts in your location.
7 Remember for each customer who purchases a frame, choosing the appropriate lens options should be simple and easy for you to discuss and then make your recommendation. These options can be made easily from a lens menu at each dispensing area.
8 One of the most overlooked sales in the optical retail community is accessories. Fun, elegant, or functional items to enhance the performance of your new eyewear should be offered in your location: a variety of beautiful cases, pre-made reading glasses with a 'better than average' lens in different shapes, sizes, colors, and the eyeglass chains and cords to keep them handy. These are all items that your patients are purchasing somewhere. Why not from you?
9 Manufacturers' brochures should be kept in one or two areas. You should understand the features, advantages, and benefits of any product you are promoting. These areas should be kept organized and changed periodically as new products from your chosen vendors become available. Again have mini-training with the vendor representative to ensure your staff of a knowledgeable answer to a consumer's question.
10 How your staff closes the sale on delivery of the new eyewear can single-handedly increase your overall sales. An informed customer should leave the shop with new eyewear that he or she understands completely. He or she leaves with the eyewear, an information card from the lens vendor, a bottle of the cleaner, and the cloth you have recommended, which has been imprinted with your shop information. Your final words should be 'You look great. I am sure you will receive many compliments on your new glasses.' -Catherine Skelton
Displays should include complete collection offerings. (Photo courtesy of Marchon)
[Sidebar]
One of the most effective ways to determine if your inventory is 'hitting the mark' is to review your capture rate quarterly.
[Author Affiliation]
author info
Catherine Skelton is managing member of Catherine Skelton LLC, a sales training and business strategy company in Grand Rapids, MI. With 28 years of experience in the optical industry, she is an ABO-certified speaker and trainer for all channels of the business.
