Investigative Report

Optical Illusion

Increasing industry influence by manufacturers of frames and a marketing campaign aimed at making eyeglasses a fashion accessory have decreased the medical focus for this product. And purchases from online stores and discount retail specialists won’t always make things more convenient or affordable. Not keeping an eye on these issues can create problems for consumers.

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If you want to see what’s really going on in the eyeglasses industry, look back no further than last year, when LensCrafters commercials and advertisements advised any potential customer to “Open Your Eyes.” To us, it’s a catch phrase that, as it turns out, has a double meaning, but we’ll get to that in second.    

The marketing push by the nation’s largest retail eyeglasses chain included print ads featuring stylishly clad models, who—according to the ads—weren’t quite finished getting dressed until they put on their glasses. For example, one ad shows a party-bound woman in a black dress. An adjacent photograph in the advertisement contains a pair of glasses with the caption: “That dress makes you feel 10 years younger ... do your glasses?”

In short, the LensCrafters campaign is part of a much larger marketing trend that wants you to look at eyeglasses as a fashion accessory that makes you look better, not a medical device that helps you see better. You’re an adult now. Nobody’s going to call you “four eyes” anymore. So, optical retailers, frame manufacturers and even some eye doctors have essentially embraced this suggestion: C’mon, why not buy as many pairs of glasses as you want?

“We want people to view glasses as a fashion accessory—an item they change like they change their shoes,” says Barry Santini, owner of a New York optical shop and the author of a continuing-education course for opticians on how to market the sale of eyeglasses.

We don’t think it’s wrong for people to want stylish eyeglasses or for people to buy an extra pair of glasses that they can wear for special occasions. Switching among multiple pairs of glasses with slight (unintended) variations in the prescriptions shouldn’t cause any problems for people or their eyes. But we can’t help but wonder whether too many players inside (and outside) the eyeglasses industry have lost their focus in trying to shift eyeglasses away from a need-based medical product to an overpriced want-based fashion item.

The federal government barely blinked when Luxottica Group, the world’s largest frame manufacturer, extended its reach and influence beyond design. It now controls 20 percent of the retail market in the United States, including ownership of national chain stores, such as LensCrafters and Pearle Vision. On top of it all, you’re paying way too much. From the local doctor’s office to the well-known retail chain, these places mark up the price of your frames and lenses by about 250 percent.

So, yeah, LensCrafters is right. It really is time for you to “Open Your Eyes” when it comes to buying glasses.

Seeing Is Believing

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EYE ON ACCURACY. We reviewed hundreds of pages of documents and interviewed 22 industry experts—eye doctors, optical lab experts, office specialists, manufacturers, retailers and independent industry analysts. (Two of the biggest players declined multiple requests for interviews.) We came away shaking our heads at what we discovered and what still puzzles us and consumers. We even did our own shopping, only to learn that in some cases the prescriptions or frames we purchased had flaws—including two purchases where the glasses were considered technically unacceptable products. (See “Seeing Is Believing.")

It’s not fair to say the results of those lab tests represent what’s happening across the board in the eyeglasses industry. But they certainly indicate the kinds of problems you might encounter when you buy a new pair of glasses. It’s unfortunate that more than half of all states don’t require certification for the technicians who make your glasses or the retail specialists who help you choose frames and make sure they fit.

Plus, the national standards that determine what wiggle room technicians have in making sure your glasses match your prescription are voluntary, which means that one lab’s poorly ground lens could be another lab’s acceptable work.

Fortunately, a bad pair of glasses won’t damage your eyes, although they can cause headaches, says Mark Bullimore, professor of optometry at Ohio State University. But that doesn’t mean you shouldn’t expect the most accurate work possible from the people who design, create and fit your eyeglasses.

Obviously, the quality of your eyeglasses also requires your doctor to develop an accurate prescription. But we chose to focus on the product end of the industry, because the quality of the glasses you buy depends primarily on the optician, the person who takes eye measurements to ensure proper fitting and recommends lens types and frame styles. In some cases, opticians also grind the lenses, and they also are responsible for verifying that glasses meet the specifications of the prescription. The actual blanks (lenses before they are ground) are mass-produced, and the quality is pretty consistent across manufacturers, says Ron Marra, who manages optical centers at Oregon Health & Science University in Portland, Ore.

Out of Site: Problems with Buying Online

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OPTICAL CONFUSION. In most states requiring licensure for opticians, there is a 2-year-long apprenticeship program for those seeking a license. In some states that require licensure, opticians can become licensed after they complete an associate degree program, and they also may become certified by taking exams from American Board of Opticians. But if you live in one of the 28 states that doesn’t require licensed opticians, your optician might be what one expert calls a “Mac-tician.” By that he means your optician could have been flipping burgers at McDonald’s one day and dispensing advice on eyeglasses the next, says Pete Hanlin, director of training and development at Essilor, a lens manufacturer.

“The rules and regulations governing eyeglasses are pretty lax,” says Debbie Hays, manager of an optometrist’s office in Chicago. Unless an optician makes a blatant mistake (such as using the wrong lens or operating machinery incorrectly), it’s unlikely that an optician will get caught doing poor quality work, she says.

Retail chain stores and optical shops in so-called Big Box stores (mass retailers) often require in-house training, regardless of whether state laws require it. But experts at independent labs that fill prescriptions for a variety of retail outlets told us that doctor’s offices have better inspection procedures in place to ensure consumers receive the glasses the doctor ordered. Opticians are supposed to doublecheck the lenses for accuracy after they have come back from the lab. But in many chain stores, this doesn’t happen, says Blaine Rolloman, manager of Peninsula Optical Lab in Bremerton, Wash.

In all fairness, medical experts say, it doesn’t take a rocket scientist to fill a basic single-vision prescription (meaning no bifocals or trifocals). Customers who purchase single-vision glasses account for about half the market, and in most cases they will receive a quality product at any number of eyeglasses outlets, including independent eye doctors, national chain retailers and vision centers inside mass retail stores, experts say. We can understand if this makes you think that demanding intense training and state certification for all opticians seems a bit overrated.

After all, Food and Drug Administration (FDA) regulates only safety glasses (for impact resistance) and devotes few resources to monitoring the makers of prescription eyeglasses, says FDA spokesperson Kwame Ulmer. Compared with the life-saving consequences of other equipment and medicine the medical industry produces, eyeglasses represent the “lowest category risk of medical products,” he says.

However, the 50 percent of wearers of prescription eyeglasses who require bifocals or trifocals face a greater chance that an optician will mess up their prescriptions, Bullimore says. That’s because glasses that have those lenses require opticians to take extra measurements, which increases the margin for error, he says.

In vision centers at mass retailers, these problems are exacerbated, because such retailers have a limited supply of lenses, Marra says. For example, he says, there are 300 types of progressive-focus lenses (bifocals that use one lens instead of two for each opening) available on the market, each of which have different technical characteristics that can be matched to the needs of the patient. But Big Box stores “are only going to buy a certain kind where they get the best price,” Marra says. In other words, Big Box stores might not give you the best lens for your prescription.

If anything, we think the training and certification requirements should be consistent for all labs and retailers. That way, consumers won’t be left to guess about the qualifications of the person making or fitting their glasses.

THE PRICE IS NOT RIGHT. Much of the consumer-related confusion in the eyeglasses industry can be traced to a 1978 Federal Trade Commission (FTC) ruling that basically said you don’t have to be an eye doctor to sell eyeglasses. The good news was that it created many more buying options and led to a boom of discount retail chains. But 30 years later, pricing is still a major issue for eyeglasses. Based on our shopping and what experts told us, an identical pair of eyeglasses can cost from $100 to $400, depending on where you shop. In general, you’ll always pay more at an eye doctor’s office or at a frame boutique. But even national chains and vision centers affiliated with Big Box stores are charging huge mark-ups on their products.

Lenses are the real moneymaker for retailers. According to the optical lab and retail sales experts we interviewed, the wholesale cost of the most basic lens (called a CR39 lens) is typically no more than $5. The cost for a polycarbonate lens (a thinner lens meant to disguise a prescription that would normally require a thicker lens) is usually no more than $15. But according to our shopping, a polycarbonate lens costs $185 at LensCrafters, $110 at Wal-Mart Vision Centers and $95 at an independent optometrist.

How in the world could the cost difference be so drastic for the very same product? We’re still waiting for an answer, because Luxottica (the parent company of LensCrafters) and Wal-Mart refused our requests for interviews. A spokesperson for Luxottica provided a statement, indicating that LensCrafters was positioning itself as a boutique retailer. So, we’re left to assume that that’s their excuse to charge higher prices.

Frames are made of no more than bits of plastic and some metal. But they also carry high profit margins—the average mark-up is about 250 percent. The mark-ups on lenses and frames are high, because overhead, insurance and payroll cut into the profit margin for independent practitioners, Hays says. Commercial retailers, however, can charge less, because they buy a large volume of frames from manufacturers for a lower price, says David Pearce, an industry consultant and a former sales and marketing director for an optical wholesaler in New York. The average independent practitioner sees only 6,000 patients a year, Pearce says, so it doesn’t make sense for that office to buy a high volume of frames. From a business standpoint, that explanation makes sense. From a consumer’s standpoint, it adds another layer of frustration.

The average profit margin per sale of eyeglasses at an independent optometrist’s shop is 60 percent, according to a 2007 market report backed by lens maker Essilor and contact lens maker CIBA Vision. Even if independent optometrists made only $100 profit for each pair of glasses they sell, that’s about $600,000 in profit on average each year—not including the $100 or so they charge for each eye exam. But high-volume national retail chains can have high mark-ups on their products, too—often at least 150 percent, by our analysis.

The makers of many expensive designer frames often license their brands to a frame manufacturer, such as Luxottica, which then marks up a $25 frame to as much as $350.

FASHION STATEMENT. The most unbelievable explanation of why mark-ups are so high for frames and lenses came from Santini. He says eyeglasses should be priced and sold just like jewelry, where sellers also rely on high mark-ups for their profits. Of course, equating the sale of any medical product with the sale of diamond rings and gold necklaces is absurd. Luxottica spokesperson Holly Ingram e-mailed a short response to us regarding fashion, noting that “optical eyewear is now considered an accessory, and styles are coinciding with other seasonal trends in fashion.” The only way we’d feel good about that statement is if she added something along the lines of: “But eyeglasses are first and foremost something that helps people see better, and Luxottica is determined to do whatever it can to make that happen.” She didn’t.

It’s clear to us that one reason the eyeglasses industry emphasizes fashion-oriented marketing is that it is trying to jump-start stagnant sales. According to Vision Watch, a joint study by Jobson Optical Retail and Vision Council, optical retail sales for frames and lenses in 2007 totaled about $15.5 billion, a figure that has stayed roughly the same over the past 5 years. In addition, its pool of potential customers also stayed about the same over the past 5 years. (About 62 percent of the population—187 million people—wear corrective eyeglasses.) Plus, encroaching sales of contact lenses and the popularity of laser surgery also led to the lack of increased sales of frames and lenses, industry consultants told us. So, the only way to increase sales is to get customers to buy multiple pairs of glasses.

Frankly, we’re astounded that Santini makes no bones about trying to move eyeglasses away from a medical model entirely. “Today’s purchasing model is based on need and insurance,” he tells us. “I say we’ve got to abandon that.”   

It should come as no surprise, then, that his online course about marketing eyeglasses is sponsored by Luxottica. Santini’s course is a sort of eye-care marketing manifesto that encourages opticians to get customers to buy multiple pairs of glasses the same way customers would “consider shopping for shoes or a purse,” Santini writes. “These are perfect examples of how items that sell for $100-$200 are bought simply to change the way one looks. Eyeglasses can and should be the same.”

His pitch to professionals is awash in marketing advice that is far from putting the best interests of the consumer first. He tells opticians to not comment on a client’s change in prescription, because if there has been little or no change in a prescription, it’ll decrease the chance that customers will buy new eyeglasses. He tells them to emphasize the term eyewear over eyeglasses, because it makes the product sound more appealing from a fashion standpoint. And he tells them to avoid certain statements to customers, such as “this style will work with everything you wear.”

Santini’s approach might be more aggressive and transparent than what other retailers preach, but he’s hardly a lone voice in the optical wilderness. He is a sought-after speaker at national and regional optical conferences, where he often credits Luxottica’s director of training as the person most responsible for the “shopping for eyewear” concept.  

FRAME OF MIND. Over the past 5 years, Luxottica, the world’s largest corporate player in the eyeglasses industry, steadily bought up other companies. Today, the company owns 30 different brands of frames, including Anne Klein, Burberry, DKNY, Oakley, Polo, Ralph Lauren, Ray-Ban, Versace and Vogue. It also controls retail shops, including LensCrafters, Pearle Vision, Sears Optical and Target Optical. And it owns the EyeMed Vision Care group, a vision insurance company. It makes its frames in company-owned plants in China and Italy and sells them in about 130 countries, so it’s no surprise that Luxottica also owns China’s Modern Sight Optics, a leading Chinese optical retailer.

To us, that’s quite a vertical integration that could present problems for consumers. To FTC, it appears to be business as usual. FTC investigated Luxottica’s acquisitions in 2004, after the company acquired Pearle Vision, says Michael Moiseyev, assistant director, mergers, in the Bureau of Competition. But the agency decided Luxottica’s takeovers did not constitute a monopoly, Moiseyev says, because “it only accounts for 20 percent of the market, so it’s not the kind of volume that gives us cause for concern.”

But that doesn’t mean it shouldn’t give you plenty of pause. We agree there are plenty of purchasing options for eyeglasses. But we are concerned that Luxottica’s media clout and market penetration will help accelerate the trend of fashion-oriented eyeglasses and lead to higher prices. What’s more, few people are aware of the conglomerate’s control over different segments of the market. For example, of the five participating retail chains that EyeMed Vision Care lists on its Web site, four are owned by Luxottica. And it’s not obvious to consumers that companies, such as LensCrafters and Pearle Vision, are actually a subsidiary or licensed operation of Luxottica. As a result, customers can be fooled into thinking they can comparison shop between retailers.

We have no idea whether Luxottica has any legitimate arguments to make in its defense, because the company twice turned us down for interview requests. We really did want to hear Luxottica’s response to questions. For example, how does Luxottica’s ownership in so many aspects of the industry make it more likely that someone will get a pair of glasses that fits his/her prescription and helps him/her see better? Also, by focusing so much on the fashion and design marketing of eyeglasses, how does that not undercut the medical importance of this product?

We also can’t help but wonder whether frame manufacturers are exercising undue control over quality standards for eyeglasses. In 2005, an Optical Laboratories Association (OLA) committee with members from the federal government and all segments of the eyeglasses industry agreed to relax parts of voluntary American National Standards Institute guidelines for acceptable margins of error for filled eyeglasses prescriptions. Why? Among other reasons, manufacturers who sell products in the United States and Europe want the standards to be more universal, so they don’t have to make two separate sets of frames or glasses for two separate markets, says Dan Torgersen, technical director for OLA.

Torgersen stressed that no one element of the industry has a majority influence on the committee in charge of changing standards, so it’s impossible for, say, frame makers to push through changes on their own. Furthermore, Torgersen says, it’s important to have input from all parts of the industry. Although the committee wants to create margin-of-error tolerance levels that are best for consumers, it also does not want to create standards so high that they can’t be met by manufacturers of frames or lenses.

We’re not challenging OLA’s desire to meet the needs of consumers and acknowledge the demands of manufacturers. But we think it’s a good idea to keep an eye on companies that make frames and hype their value as a fashion accessory. No doubt, a bad pair of eyeglasses won’t kill you and probably won’t damage your eyes. But if you’re only focused on looking sharp, you don’t have a clear view of what’s really going on.

Freelance journalist Linda Baker also investigated the carbon-offsets industry for Consumers Digest. Her work also appears in Christian Science Monitor, Metropolis and The New York Times.

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