Uk Prescription Spectacle Market Commerce Essay

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The introduction of the Opticians Acts in 1958 by the parliament led to the creation of the general optical council (GOC) to regulate the optical professions and put an end to the disputes and debates caused by the public complains about the lack of competence of the non - medical practitioners in testing eyesight. In order to protect the public, the main purpose of the GOC has since then been to promote high standards of education, formation of students and introduce a disciplined framework amongst opticians.

After the 1958 Optician Act only optometrists registered with the General Optical Council were allowed by law to conduct eye-tests and only optometrists or dispensing opticians were allowed to sell spectacles. The same act of Parliament prevented opticians from advertising their services therefore large firms with many branches or franchises did not dominate the business and competition between colleagues were seen as distasteful.

The most obvious change in the market since the 1980's deregulation was to allow advertising and marketing of goods and services. "It was a great temptation to come back into optics. We were the first to advertise, have showrooms and let people know what our prices were. Buying glasses then was quite expensive so people were not visiting opticians. There is a health aspect as well, so we wanted to get people to visit opticians on a regular basis and provide more choice at affordable prices for everyone." said Dame Mary Perkins, founder of Specsavers the biggest optical retailer in the UK.

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The current Opticians Act 1989 which replaced the act of 1959 has been amended in 2005. According to the Act and the powers given to the GOC by the Parliament, any optician has to be registered and recognised by the council to practice; moreover even the selling of spectacles has to be done under the supervision of a registered optician. Actions that would be considered as criminal offences could be:

SECTION 24: dispensing sight testing without being registered

SECTION 25: fitting of contact lenses without being registered

SECTION 27: sale of optical appliances which do not meet legal requirements

SECTION 28: use any of the titles dispensing optician while not being appropriately registered.

The principal modification of optician law - the optician act from 1989.

This involved making it a legal requirement that the ophthalmic optician give the customer a paper prescription, so that they could take that and buy their glasses anywhere (which was under the 'general supervision' of a dispensing optician), not just at the place where their eyes were tested. Regulator the General Optical Council came up with the specifications of exactly what a prescription had to contain and this was made into law by a government regulation. That was an opening opportunity to the online trade. In 2005 for the first time Prescription glasses were sold online - the chance was given to people to bypass traditional high street opticians, buy glasses directly from the manufacturer, and pay far less (that was us, by the way).

2. The Electronic Commerce Regulations (EC Directive)

In 2002 were introduced the Electronic Commerce Regulations to promote e-business and protect consumers and their privacy. The regulations apply to businesses that sell goods and services and advertise on the internet or by email or text messages.

The regulations require online sellers to:

Provide their customer with a printable receipt (with company name, place of registration, registered number, details of any professional body with which you are registered, VAT registration number) once an order has been placed.

The possibility to print out the Website terms and conditions.

Provide details such as the technical stages to conclude a contract.

Allow the customer on the website to go back in order to correct any mistakes made in the order before is placed.

3. Distance Selling Regulations 2000

The Distance Selling Regulations 2000 were introduced to protect consumers who are not physically present with the seller at the time of purchase. That covers the selling goods or services to consumers by internet, digital television, mail order, including catalogue shopping, phone or fax giving to the consumer the right to:

be given clear information about the goods or services before buying.

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receive the goods within thirty days unless agreed otherwise.

a cooling off period of 7 working days where they can cancel the contract for any reason and receive a full refund within 30 days for the cancelled contract.

As for the rule applying to high street purchasing goods in distance selling must be of satisfactory quality and fit for purpose.

4. Competition Law

Any business should be aware of the competition law so as to meet the requirements first and know its rights and protect its position in the marketplace.

In the UK sets of competition rules apply in parallel. Anti-competitive behaviour which may affect trade within the UK is specifically prohibited by Chapters I and II of the Competition Act 1998, the Enterprise Act 2002 and also by Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU).

UK and EU competition law prohibit two main types of anti-competitive activity:

anti-competitive agreements (under the Chapter I and Article 101 prohibitions); and

abuse of dominant market position (under the Chapter II / Article 102 prohibitions).

Both UK and EU competition law prohibit: agreements, arrangements, concerted business practices which appreciably prevent, restrict or distort competition and businesses with significant market shares unfairly exploiting their strong market positions.

Some consequences of breach:

fines of up to 10% of group global turnover

expose to actions for damages from customers and competitors who can show they have been harmed by the anti-competitive behaviour

being disqualified from being a company director and lead to criminal sanctions.

Main Threats and Legal Issues

1. Main Threats

The deregulations of the Optician Act 1958 has opened up the prescription spectacles market and encouraged competitions among the retailers. The introduction of the internet has brought an unpredictable competitor at time of the deregulation, the online opticians. Ever since, the market demand of prescription spectacles at High Street Opticians have plummeted while the demand on the new online entrants have continue to shore. Below is the illustration of the market demand of prescription spectacles of both markets after the amendment on the original Optician Act;

After

Before

Deregulations

Lower prices glasses offered by online retailers contribute to the growing trend of shopping online.

More and more consumers are now opting to buy glasses from the online opticians because of the lower prices offered compared to the High Street. The new online entrants are offering items at significantly lower prices because unlike their rivals on the high street, they do not have to spend high cost on the physical stores, the designs, properties rental, staff and maintenance costs, etc. They are saving up all cost spend on these aspects and therefore, they could still make good profit even they are selling items that are half the price of those offered at High Street. In comparison, High Street Opticians cannot avoid spending these costs and these are the attributions to the higher priced prescription glasses.

Decline in demand for prescription glasses High Street prescription glasses.

The immediate threat brought by the growing trend of purchasing glasses online has lead to the decline in demand for prescription glasses in the High Street retails. The market elasticity towards low price prescription glasses is great. The decrease in price offered by the online retailer has clearly increased the demand. In contrary, the increase demand of online prescription glasses has resulted in the decrease of demand for prescription glasses at High Street retails.

With lesser demands, the high street profits plummet.

Amendment of The Optician Act 1958 and competition law

The amendment of the Optician Act 1958 had posted a great threat to the High Street Opticians. Together with the Competition Law, the original act was amended in order to increase more competition within the industry, thus lower the prices of prescription glasses. However, the introduction of the internet which later leads to e-commerce was an unpredictable obstacle to the business.

Internal competition with franchisers

Dominant market players such as Specsavers, Vision Express and Boots Opticians have also introduced their own online websites to the public. Albeit many high street opticians are part of large franchises their profits are being eroded by the online services offered by their mother companies.

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As part of the franchises, high street consumers can opt to purchase cheaper prescription glasses on the main company websites after having their eye tested at the high street retails. In this case, high street opticians are losing their customers to their mother companies while competing with other competitors in the market.

Introduction of new technology used by online entrants

It is debatable that the advantages of getting personal attention and after-sale care at the High Street Opticians have not yet been threatened however some online opticians are already advancing to take over in these aspects. For example, Specsavers is already giving out eye health and eye care information as well as introducing the 'try on frame online' service, which allows customers to upload their picture and try on the desired frames, on the websites.

2. Legal issues to High Street Opticians and Online Opticians

Trades in both High Street and Online optical retails are governed by the Optician Act 1989, the Sale of Goods Act 1979, the Trade Descriptions Act 1968 and a number of other regulations. However, the main acts that differentiate these two business operations are the Consumer Protection (Distance Selling) Regulations (DSRs) and the E-Commerce Regulations (ECRs) 2002. Businesses that are selling goods or services without any face-to- face contact such as through the internet, phone calls and mail order must comply with these two regulations.

Trading Information provided

Both high street and online optical retails are obliged to the Trade Descriptions Act 1968 and the Consumer Protection (Distance Selling) Regulations (DSRs) to provide consumers with clear information so that they can make an informed decision to purchase a good or service. This information must include details of the selling organisation, detailed descriptions and the prices of goods or services offered.

However the Consumer Protection (Distance Selling) Regulations further details in the payment methods, the delivery arrangements and the information of the consumers' right to cancel an item purchased.

Reaching agreements and accepting offers (forming of contract)

According to the Law of Contract, at High Street retails a legally binding contract can be formed when the customer agreeing to accept the terms proposed by the vendor. Neither the offer nor the acceptance needs to be made in writing, or even in words. They may be orally made or implied from conduct.

The E-Commerce Regulations states contracts conducted online will only become legally binding when the person who made the offer is able to access to the acceptance. The consumer should be able to print and store a copy of the terms and conditions of the contract. Therefore online opticians will have to receive the acceptance from the consumers where in most cases, by means of clicking the 'I agree' button and they must issues receipts or confirmation emails to the consumers after the contracts are formed to indicate a legal binding contract has been concluded.

Refund and exchange policy

Subject to the Sale of Goods Act 1979, High Street customers are entitled for a refund or exchange an item if the items are incorrectly described, unfit for the purpose, faulty or not of satisfactory quality given the proof of purchase, in most cases receipts. However, according to the act, proof of purchase could also be a credit card transaction or a bank statement. Customers are entitled for the refund as long as they do so quickly and are not informed of the default of the items before the purchase.

The Consumer Protection (Distance Selling) Regulations governs the trading of Online Optician and gives consumers more rights as they are disadvantaged in unable to inspect goods before the purchase. The regulations apply the 'cooling off period of 7 days 'policy, during which the consumers have the right to cancel their purchase. Written notice of cancelation must be forwarded to the supplier no later than 7 days from the day the item is received. However, section 13 of the regulations applied here that unless the consumers are informed beforehand, they do not have the right to cancel the order for the prescription spectacles which are made to the consumers' own specification.

In conclusion, the legal issues that apply to both High Street and Online Opticians are similar in many ways; the main differences are the governing acts and regulations and also the return and refund policy where online consumers enjoy more privileges. While both High Street and Online Opticians might have their own cancellation and return or refund policy, they do have to make them clear to the consumers before they have agreed to purchase the items. On the High Street these policies or conditions can be made orally or in written forms. With Online Opticians terms and conditions must be presented in a clear written form. Legally binding contracts concluded in High Street shops could be verbal, implied by conduct or in written forms whereas legally binding contracts concluded between online opticians and their consumers must be in written forms and their consumers should have access to the agreements and be able to store a copy of the contracts.

Strategy

SWOT and PEST analysis. Strategy Research

As detailed history of the situation, changes in law and the threat faced by High Street opticians, where discussed on the previous pages, let us have a look at the below analysis. The presented, SWOT and PEST analysis help us to identify the right strategy that will prevent your customers for prescription spectacles defecting to the on-line retailers.

Considering the factors, determinants of both analysis, it is strongly suggested to High Street opticians to concentrate on one of the strengths - customer service, which physically, cannot be supplied by on-line opticians. (Please refer to the diagrams below, page 11 & 12.)

The research on previous strategies, applied by different companies round the world, proves that it is time to return to basic principles. Customer and value creation are one of them. Karl Albrecht mentions in his essay, in "Business: The Ultimate Resource" that "strategic customer focus can serve as powerful organising principle for reinventing business in the age of the Third Wave - The Second Coming of Service.".

It is known to everyone how important the way of providing customer service is, and that is the way to compete on-line spectacles retailers. Consumers will always prefer the product, which offers more qualities in form of design, service, convenience and price by purchasing it. A marketing strategy could be, rather than focus on the price, to engage in a non-price competition.

There is a need for High Street opticians to ensure that once the customer enters the shop, to make an eye test, he/she will buy what he/she wants and needs. That there is a group of experts to exceed customer expectation, to assist him/her and be with him/her until he/she is fully satisfied and purchase the spectacles. It is important to create a joy of purchasing the product and a joy of having it - it will let customers believe that they have simply bought the best spectacles in the world.

Strategies

Advanced training for assistants

A customer, who is suffering from low vision, need to feel that he is helped by an experienced and trained person, similar to a trained clinical assistant, and not just sold a new product in the form of spectacles. An eye-test is good to check if you need new glasses or a new prescription, but it also works well for an eye health check. An advanced eye test can spot many health problems and early signs of eye problems. People who may be more at risk from eye disease than others, are above sixty years old, the ones diagnosed with diabetes or glaucoma, and might be from a family with a history of eye disease. Optician assistants should provide a service which is unique and necessary to attract the attention of customers and make the customer feel at home and caring about his/her eyes.

Quality Eye-test

Opticians could make more detailed and tailored measurement of eyes, which would allow the customer to find the right lenses. People with multi-focal lenses have to be measured to ensure their eyes look through the right part of the lens. Nobody can sell those over the Internet.

The Right glasses for the Right Person

Highly trained staff is required, who has an up to date awareness of the recent fashion trends related to glass wear and who can provide an advice on the right eye glass type. For example, the staff should be capable of giving an advice on which type of eye glasses fits a certain dress code (e.g., classic, casual, sport-chic,...etc), and on which type of glasses can go well with any dress code (i.e., a generic eye glasses). The staff should also have an understanding of how frame colours should be matching skin colours and customer personalities. This concludes a style oriented product choice.

Same day replacement service

Customers, who break or lose their spectacles will be provided with a "à la minute" service, which means they will receive the same lens or a temporary glasses they can wear until a new one is being prepared. Such type of after-sales service cannot be replicated by online spectacles suppliers. While deciding on the extent to which high street options provide this service, we need, however, to take its cost into consideration.

Eye tests at home

A patient's home can be easily transformed into a consulting room, allowing the visiting optician to provide a full and extensive eye test. The mobile optician can carry up-to-date mobile equipment with a variety of spectacle frames, with a different range depending on each budget. It can be an advantage for people who are home bound such as, older people, mothers, disabled people, etc

Free prescription

Free prescription should be provided for those customers who will also purchase the eye glasses in store. Customers that will only request a prescription will be charged a significant amount. This could lead that customers will prefer to buy the glasses from the high street opticians.

The strategic triangle

By observing international business it can be easily spotted and admitted that Japan is one of the leaders in worldwide market. And they are the ones, who are strongly convinced that the customer is a key to success. The most important to them is customer-centricity.

Kenichi Ohmae presents the strategic triangle in his book: "The Mind of the Strategist: The Art of Japanese Business", and these are the key factors, which will let High Street opticians achieve outstanding performance.

The Strategic three C's

Kenichi Ohmae (1982), "The Mind of the Strategist: The Art of Japanese Business", New York: McGraw-Hill, Inc., pp. 92.

Mission statement for High Street opticians

"I view today's economy as the value economy. Adding value has become more than just a second business principle; it is both the common denominator and the competitive edge." Arthur Levitt Jr, "Business: The Ultimate Resource".

Key objectives for 2010/11

Focus on customer

Invest in employees

Ameliorate effectiveness

Grow the business

Focus on the customer

guarantee outstanding customer service

maximise unexceptional medical equipment - for example: fundus cameras (detailed image of the- back of the eye can be recorded and stored)

provide and maximise the sale of the widest range of spectacles, in different designs;

provide and maximise the sale of specialised lenses (varifocal, bifocal)

improve customer communication by opening call centres, which are open 24/7 and happy to assist the client, when needed.

Invest in customer satisfaction - random internal checks by mystery clients

Invest in employees

provide different, regular training for all of the staff including senior one (training centres, training tools, in-store training, distance training, workshops, etc.)

reward and motivate the staff by providing competitive salary package

improve work conditions make the place to be desired to work in

senior management to attract the rest of the staff by working hard and deliver with passion (and vice-versa)

Ameliorate effectiveness

be able to manage cost risk and sell the spectacles for lower price (provide different promotions, seasonal offers, two-for-one, etc.)

Grow the business

expend opening hours; provide home visits or mobile appointments

invest in advertising (media, as well as, for example: animations on cash machines, etc)

if necessary - join the companies - buying smaller optician companies by giants may let "kidnap" the higher number of customers, including on-line customers - it could allow in the future to globalise the business.

In conclusion, it is important for the High Street Opticians "to be flexible and fluid, companies need to become amoeba-like - able to move one way while always responding to local stimuli and changing direction in response to new information from the environment." "Strategy in Turbulent Times" by Costas Markides, "Business: The Ultimate Resource".