COMPANY PROFILE: OPSM is an eye care and eyewear retailer and has been looking after the eyes of Australians for 85 years. Part of Luxottica Group, OPSM has close to 400 stores in Australia and New Zealand and helps more than one million Australians see more clearly each year.
Inside Retail Weekly: How has 2017 been tracking for OPSM?
Anthea Muir: 2017 has been a hugely successful year for OPSM. We’re trading very well, we’re growing and we’ve been successful mostly in terms of getting new customers in the door and getting the individual store operations in a place that we’re pretty happy with.
One of the big things driving our success is we’ve invested heavily in a store refurbishment program, so by the end of the year, we’ll have refurbished 76 stores, which is a quarter of the network – we’ve got 322 stores in Australia and 48 in New Zealand.
IRW: Can you tell me more about the store refurbishment and what it involved?
AM: The refurbishment is sending a message out to customers that we’re modern and fresh and that’s driving traffic. It’s giving us an opportunity to add extra test examination rooms in the store, because the number of optometrists we’ve employed this year has grown significantly and we’ve increased trading hours. By refurbishing the stores, we can show off our products better and add more optometry, which is driving our business.
Because OPSM has been around for 85 years, we’ve got a big variety of store design out across the marketplace. Traditionally, we’ve taken an approach of investing in the biggest and most profitable stores, rather than thinking about it in terms of the whole network. Eighteen months ago, we firmed up our store design and now we’re looking at stores around the country, regardless of their size and asking ourselves, ‘What needs to be refurbished to give us the right look and feel to offer the best customer experience?’
We built our new store design based on the customer journey and now we’re going into the older format stores, taking out things like poles and putting in glass shelves, which display the beautiful brands we sell better, and we’re making the flow of the customer navigation better and of course, giving it a more modern look and feel. OPSM has had a reputation for being a bit old, so we’re really modernising the stores.
We’re defying the retail trends of foot traffic. We’ve been doing a lot of work on our CRM database and the way we remind customers of eye tests to invite them to tell us about new product collections and that’s been generating a large increase in eye appointments.
When people have an eye test with us, depending on their optical needs, they’ll buy from us, so the foot traffic’s coming that way. We’ve also looked at our traffic counters and understood better how customers flow through the doors. What we learnt is that Sunday is a very busy foot traffic day for us, but we weren’t providing a lot of optometry services on that day. So in most stores, we now have optometry available on Sundays, which has given us a big increase [in sales]. We’re also looking at the other days of the week store by store, and making sure the optometry availability meets the needs of the customers and it’s generating large foot traffic and hence, the financial results.
IRW: What plans do you have for OPSM for the year ahead?
AM: One is to continue the store refit program and we expect to refit the same number of stores next year, including the ones we did last year, plus this year. Most of the store network will be mostly of the one design, so it doesn’t matter where you shop, you’ll get the same great experience. The other thing we’ll do is to continue to refine optometry hours.
We’ve also relaunched our Ray-Ban lenses, which is a big deal for us, because it’s such a well-known sunglass and optical brand and now we have lenses exclusive to OPSM. So you can buy the Ray-Ban frame with the Ray-Ban lens in it – we see it as a really nice new product line in growth for us.
Apart from that, we expect in 2017 to continue to invest in optometry technology that will continue to improve the diagnosis and treatment of eye diseases and we will invest in store experience in a greater way next year.
IRW: What would you say have been some of the highlights for OPSM over the last few years and the biggest changes you’ve seen in the company?
AM: I think one highlight is we’ve managed to survive through things like the Great Depression! The fact that we’ve been nimble enough as a company to ride all these different geographical and socio-economic changes and world trends is pretty exciting.
But in terms of big changes that have impacted us, one is changes in regulations. It wasn’t long ago that corporate businesses couldn’t employ optometrists – they were always a subleased type of doctor and now we can employ them so we can get more consistency across the stores and service. We can invest heavily in optometry training and education. That’s been beneficial for the industry.
The other thing is technology has changed immensely in terms of optometry equipment that allows us to diagnose eye diseases. From the day I graduated to today, the technology advancements in an OPSM store, rather than what used to only be in a hospital, mean that our ability to now detect an eye disease in-store has improved incredibly – we see evidence of that every day in customers when we detect tumours, diabetes and things like that. That’s exciting, because it means that in a world of convenience for customers who can now shop seven days a week, they can have those eye conditions detected at a time that suits them and we can treat them and do a better job.
The other thing that’s significantly changed is the move away from glasses of being a
functional product to glasses being fashionable. OPSM was the first company in Australia that really embraced that in terms of designer brands, with Giorgio Armani and things like that, so now, the extreme case is we have people who buy glasses with no prescription in their lenses, just so they can wear the glasses.
It makes the industry more exciting and there’s an added chance of customers coming back in more regularly, which gives us a chance to not only sell them sexy-looking glasses, but to also give them eye checks and not miss diseases.
IRW: What are some of the unique challenges of being a heritage brand like OPSM, staying true to those core values and still moving forward into the future?
AM: I think the challenge is moving with the times, but understanding what it is you’ve been good at and not abusing it. So in our case, we have this incredible heritage built on expertise and skills in-store. The balance there is to still retain those skills, but be able to provide to the services at the speed the customer wants. They don’t want to spend two to three hours in a store, they want to spend an appropriate amount of time to get the job done.
We’ve managed it because we have a wonderful team of people, some of whom have worked for us for 50 years, so we can use their expertise to train others. I think the challenge is to recognise what you’re really good at that’s made you good, but being flexible enough to move with the times and provide the modern customer with what they want now.
In the old days, we’d tell you what you needed and now, the customer’s in control of that and we need to listen to what they want and provide them with what they want.
IRW: How do you think customer has evolved over time?
AM: Originally the customer was forwarded to us from a medical perspective – “I’m not seeing very well, therefore I need to go to OPSM” – and everything was based on a doctor experience. The doctor was the king of the store and told you what you needed, whereas now, the customer’s completely in control of that journey and they dictate when they want to shop, how they want to shop and what for. Our job is to listen to their needs and give them recommendations and let them choose.
IRW: How has digital impacted the optical retail industry?
AM: The optical industry has been traditionally slower than other retail categories in the world of digital. Certainly, we’re finding online sales are very important in the world of our contact lens business, mostly because customers want convenience and speed and it’s a regular type of prescription.
We sell frames and sunglasses online – it’s still a small percentage of our business but growing rapidly – and digital technology is catching up in a way that we expect to be able to provide equivalent types of services online as we do in-store. We’re not quite there yet, but we expect to see it over the next year or two.
IRW: So you think people are more open to buying eyewear online, rather than trying them on in a bricks-and-mortar store?
AM: You have a group of people who absolutely want to be in-store and try them on for the feel, weight and fit. And then there are others who want the convenience of when they want to shop and our job is to provide that either way. Today, you still have to go in-store for elements of that. I anticipate that in the future, you’ll mostly likely still have a bricks-and-mortar experience for the eye test and you’ll be able to do more of the other parts of buying the glasses online.
IRW: In recent years, there has been an increase in price-competitive online retailers that have entered the eyewear space. Do you see them as real competitors for OPSM?
AM: Anybody who operates in our industry is a competitor, but it’s a question of who you’re targeting and what your proposition is to the customer in the market. OPSM’s proposition is around quality of eyecare and eyewear and generally, the lower priced competitors are leading on price rather than quality.
I always say you get what you pay for, but ultimately OPSM will always have to be aware of the competitors around us. That doesn’t mean we react to them necessarily, but like any retailer, I think you’re a bit naive if you don’t pay attention to what’s happening around you. I don’t think over time it’s changed what OPSM does, it’s just made us clear on what we’re good at and we’re focusing on that.
IRW: How do you balance the retail side of the business and the optometry services OPSM offers?
AM: It’s tricky, but a benefit for us to have both. We have the luxury of having people need to come to us to have an eye test, whereas in standard retail, it’s usually a want-driven experience. People need eye tests and need to buy glasses, so sometimes when footfall is low in malls or the economics aren’t great, we can often ride those trends out better because of our services.
The balance is to not make ourselves so medical and clinical that it’s not a great shopping experience for customers, but at the same time, not make the shopping experience so fashionable and cool that we lose the expertise and heritage.
The size of our stores and the flexibility of the stores do provide challenges for us in terms of lease locations in shopping malls, because if we want to increase capacity for optometry, we need more examination rooms. That can be a challenge on the retail selling space.
IRW: What’s your time at OPSM been like since you came on board as CEO and what kind of impact have you had on the business?
AM: I hope I’ve had a good impact! I’ve been with OPSM nearly 20 years and I’ve seen a lot of changes. I started my career as an optometrist and I was working in the store testing eyes, then I gained some store management experience, which gave me a taste of leadership and how I felt I could make a difference to the way things are done.
I started that journey in New Zealand, then I moved to Australia and took a variety of roles mostly in products – lenses and contact lens-buying then frames, sunglasses. Because I’m an optometrist and understand eyecare, but now I was working in eyewear, I felt I could have a better influence on what we did because I could marry those two pretty well.
I’ve had an amazing career where I’ve done many jobs, I even ran the IT division for two years, which was an interesting leadership experience and taught me a lot about my ability to lead rather than just understand optics. Then I joined the executive team during that time and took a role in China for a couple of years, which was an amazing experience, living in a different country and leading a different team in a different language.
Every day, I still remember what it was like to work in a store, I know what it’s like for an optometrist and a store manager and I remind myself of that every day on the bigger decisions I’m involved with today.
I spend a lot of time in stores, I get a lot of energy from it. I spend more time in stores I’d say than the average CEO because I love the people. At the end of the day, I only have a job because of the work they do in the store, so therefore, the more time I spend in store and understand what creates restrictions for them to provide great customer service, the better decisions I can influence from this building to get rid of those restrictions to help them do a better job.
IRW: Do you think it’s something that more CEOs should do – spend more time at the grassroots of the business?
AM: It’s easy to get caught up in a chaotic diary of meetings and decisionmaking and just look at it all from a very financial and metric approach. It’s harder to cross out the diary and get in stores. I try to work in a store for a day a year and I still do eye tests.
It’s something you almost have to force yourself to do, but I always come back thinking I need to go to stores more often. The answer to problems is always in the store and the good customer associates know what needs to be done to make the stores better. If you listen to them, you can directly make changes the next day and for me, that’s an exciting part of the job.