AMERICAN DEMOGRAPHICS 2014

American DEMOGRAPHICS 2014

A REGIONAL REPORT ON BUSINESS AND THE U.S. ECONOMY

Welcome to EB’s sixth annual regional report on both optical and outside business and economic trends in each of the country’s four geographic regions.

In this exclusive report, we include findings from a number of expert resources, including you, our readers, as well as organizations such as The National Retail Federation (NRF) and The Conference Board.

So, how are we doing?

Both inside optical and out, business is on the upswing. According to the NRF, “Shoppers have continued to spend after dealing with the severe winter weather.”

Retail saw a solid 3% rise in consumer spending in the first quarter and an expected 3.2% increase in the second quarter.

According to just-completed EB research, all regions also saw an overall increase in first quarter optical sales. The Northeast showed the least growth for the first time in several years, while the South saw the highest jump.

REAL RETAIL

This positive trending is also reflected in recent Consumer Sentiment Index numbers, tracked by the University of Michigan, that show the highest readings since July 2013.

Here’s what a few more outside experts have to say about the business outlook for the remainder of 2014:

• WEATHER. Ken Goldstein, economist with The Conference Board, an independent business membership and research association, explains that the broad geographic reach of bad weather this winter—two inches of snow in Atlanta, ice storms in Dallas—clearly took the economy down a notch.

• JOB GAINS. Jack Kleinhenz, Ph.D., the NRF’s chief economist, says, “Employment growth has been a positive factor with a good mix of job gains across most sectors. Expect this trend to continue.”

• THE ECONOMY. Ryan Severino, a senior economist with Reis, Inc., a provider of commercial real estate information, adds, “If you are affluent, times are good. The middle, on the other hand, had fallen so far that it has a lot of potential.”

• DEMAND. Now, adds Goldstein, “with improvement in consumers’ balance sheets and more willingness to spend more, we’re seeing a release of pent-up spending power.”

• INFLATION? According to the NRF, reports “support the case that inflation has picked up, and beg the question of whether it will continue its trajectory or return to the previous modest pace.”

In the short term, however, the numbers “suggest accelerated growth,” the NRF reports.

OPTICAL TAKE

According to EB research, completed in May, sales of frames, lenses, and sunwear are up as part of that suggested retail accelerated growth.

• LENSES. It should be no surprise that digitally designed/free-form produced lenses are continuing their rise, thanks to an ever-growing breadth of options. Except for a unilateral dip in 2011, these premium lens designs continue to be a growth category. This year, free-form/digital lenses comprise 40% of respondents’ lens sales.

Polycarbonate continues to be ECPs’ “most-used” material, showing a slight growth in sales over the past two years. As for extras and treatments, AR reigns supreme, making up well more than three-quarters of all treatments. Photochromics comes in a distant second.

• FINISHING. Whether it’s to save on lab bills or increase turnaround and service, ECPs are bringing more work in house. A little more than half (52%) of respondents report having edging equipment. That’s a good jump from last year’s 44%. Perhaps that’s because last year, one-third of respondents indicated an intention to start edging within the year.

Though the Northeast had previously led the nation in edging, for the first time in three years the South has more in-house labs than the Northeast (57% of ECPs versus 54%). Those ECPs who do finish in-house reported a very slight uptick in jobs, but it’s still not at the level they reported two years ago.

• FRAMES. Stylewise, eyewear consumers are still snapping up retro styles and looks with period-specific design influences. But they definitely want new eyeglasses when they have a new prescription—89% of patients select new frames rather than refill their existing pair with new lenses.

In the material world, plastic continues its dizzying ascent, up from 32% in 2010 to a whopping 60% of frames sold. While still lagging behind its 2010 sales, rimless eyewear jumped by 3% this year, as did metal/plastic combination frames.

• SECOND PAIR. For second pairs, sunwear is still far and away the leader with 72% of sales. This marks a further upswing for the category of 4%, but it still doesn’t meet the 2010 sunglass sale share of 73% of second pairs.

The computer eyeglass category seems to have stolen sales from the casual second pair, with results up and down by 3%, respectively.

Clips remain at 2% of second-pair sales.

• SPECIALTY EYEWEAR. Computer eyewear is building serious steam, capturing market share from kids eyewear, which took a small dip from 23% to 21% of niche sales. One region particularly embracing computer eyewear, the West, reported 14% growth from last year.

Along with computer eyewear’s 10% jump this year, sports took a hop to 11% from 8%. Sports eyewear is strongest in the Northeast, with 16% of respondents reporting it as a major specialty seller.

DATA Center

SUN SALES

57% of respondents report that 50% or more of their sun sales are Rx sunwear

54% report that less than 10% of their overall sun sales are Rx sport sunglasses

50% report that less than 10% of their overall sun sales are plano sunglasses

FASHION TRENDS

Roseanne Morrison, fashion director at forecasting service The Doneger Group, talks trends for the Fall:

FRONTIER: A western influence in a subtle way

ACADEMY: A little collegiate, from active to studious

CAFÉ SOCIETY: Very soft, feminine, romantic

EASTERN ECLIPSE: An Asian influence/direction

REASONS TO EDGE

46%...save money on lab bills

42%...better turnaround/service

12%...better control of products