Demographic Directions 2023

Analyzing today’s economic picture is a lot like looking into a kaleidoscope. Depending on how you look at it, changing data delivers different reflections.

In this exclusive, 10-page report, we dig into key economic data plus the critical results of our Eyecare Business 2023 Annual Regional Market Trends Report to reveal the most crucial business trends for independent ECPs from coast to coast.

The Participant Profile. Every summer for a dozen years, EB has been surveying ECPs to determine top market trends across the country and within the four U.S. Census Bureau regions.

This year, the 691 survey respondents include 428 optometrists and 249 opticians from all four regions. One out of 4 has a practice at a single location, while almost half (42%) have two or three locations. More than one-third (34%, up from 26% last year) have four or more locations.

The Big Picture

After two years of skyrocketing interest rates and runaway inflation, the U.S. economy is evening out. The “R” word is still on the tips of tongues, but no one is expecting a crash landing, thanks to strong employment numbers and rising wages.

This optimism is reflected in optical sales. A full 58% report that their bottom line is up in 2023 over 2022, with 25% saying that it is up 10% to 20% year over year. Asked about their greatest opportunity at retail right now, ECPs pointed to premium product as a top option.

Divergent Directions

Overall, both the economic picture and the outlook for eyecare professionals is somewhat of a moving target…and hard to pinpoint.

As Jack Kleinhenz, the National Retail Federation (NRF)’s chief economist, explains, “Depending on which data you view, you get two different angles on the state of the consumer. While survey data shows consumers do not have much confidence in the economy, actual spending data shows they were upbeat as the second quarter kicked off.”

Those mixed messages regarding the economic picture are also evident in EB’s report—and may help explain why both premium and moderately priced product get the nod for areas of focus from ECPs.

Either way, a view of state-level economic data produced by the Federal Reserve Bank of Philadelphia shows economic increases in all states except Alaska. Nationwide, year-over-year inflation as measured by the personal consumption expenditures price index was at 4.4% in April. That compares with 4.9% in the first quarter of 2023 and 5.7% in the fourth quarter of last year.

Softening the “R” Word

The NRF’s definitive conclusion? “We are not in a recession.” Looking ahead, however, several forecasters reported in June that there’s still a good chance of a mild recession later this year. A 61% chance, according to Wolters Kluwer Blue Chip Economic Indicators.

Not everyone agrees. The National Association of Business Economics (NABE) reported in June that “54% of economists at companies and trade groups put the odds of a downturn in the next 12 months at 50% or less. That’s a turnaround from NABE’s January poll in which 54% reported that a recession within the next 12 months is probable.”

Prices + Employment = Up

Recession may not be on the tip of everyone’s tongue anymore, but inflation, though downgraded last month, is still a maybe. At least short term, there’s good news, with inflation rising at only a 4% annual rate in May—the lowest in two years.

What about unemployment? May came in at 3.7%. Though up from April’s 3.4% unemployment rate, it’s important to note that April represented the lowest rate since May 1969.

Age + Race Mix

We’re all getting older…no surprise there. But so is the country. According to Census Bureau data released in June, the median age in the U.S. has risen from 35.2 in 2000 to 38.8 in 2020. As for seniors, the over-65 population has exploded, growing five times faster than the general population in the 100 years between 1920 and 2020.

As for racial mix, the multiracial population in the U.S. is the youngest of any race group in the U.S., increasing from 9 million in 2010 to 34 million in 2020.

Optical Insights

The report unpacks a variety of key directions for eyecare professionals in 2022 and beyond.

• Profit Potential. Specifically, 58% say their eyecare and/or eyewear business is up over 2022. And, a full 10% say their business is up over 21% in 2023 compared with 2022.
• Key Categories. The areas with the greatest potential? Survey respondents point to contact lenses, followed by premium products and accessories. As for here and now, respondents pinpoint moderately priced product as the area currently experiencing the greatest growth.
• Purchasing Plans. When asked about purchasing plans for the year, the number most often cited by ECPs was a 20% increase in purchasing in all categories—frames, lenses, and contact lenses.
• Online Selling. Interestingly, ECPs have been moving into online offerings in the past years—our 2023 study revealed that 34% sell plano sunwear online, 33% sell contact lenses, 33% sell readers, 27% include accessories in their online offer, 29% include Rx sunwear, and 20% serve up the Rx eyewear option online.Asked, “If you don’t sell online now, do you expect to be in the next two years?”, 87% of ECPs surveyed say yes. That’s up from 84% in 2022.
• Social Leanings. What about communicating with consumers about product/the practice? Specifically, 40% of ECPs say they post to social media weekly. ECPs’ channels of choice? Nearly one-third (31%) prefer Facebook, while others give LinkedIn (28%) and Instagram (24%) the nod.

 

The Northeast…

Dense + Diverse

The Northeast is the nation’s smallest but most densely populated and culturally diverse region in the U.S. So, how have its nine New England and mid-Atlantic states fared this year?

Though employment is up, the region’s aging population and rising rate of retirement have kept it from catching up to the area’s pre-pandemic job numbers of 2019. Some states in the region have definitely caught up better than others, however.

For example, the recovery has been more modest in Connecticut, Rhode Island, and Vermont than in other states in the region. On the other hand, New England has continued to experience less inflation than the rest of the United States.

That being said, the outlook for independent ECPs in the region is definitely looking up. A full 65% report that their bottom line is stronger than last year. And, looking back to 2022, 55% reported that business was up compared with pre-pandemic levels in 2019.

What price points are selling best this year? According to survey respondents, nearly half (46%) see the most opportunity in moderately priced product, followed by premium-priced product (30%) and entry-level product (23%).

In Focus

Prices, as measured by the consumer price index rose by 0.1% in May. The Northeast includes the state with the oldest median age…Maine at 45.1 years old. That’s a lot higher than the 38.8 median age nationwide.

In Practice

Here, a few key practice trends that have taken shape in the Northeast so far this year.

• Scheduling Frequency. Appointments are getting shorter. Nearly half of practices (48%) schedule more than one appointment per hour. That’s up from 30% a year ago. Looked at another way, more than half (52%) booked most appointments for one hour in 2022. This year, that number is down to 22%.
• Purchasing Patterns. Last year, ECPs in the Northeast trimmed back product purchasing in all key areas. In frames, for example, nearly 4 out of 10 ECPs (39%) reported they were cutting frame sales by 25% or more compared with 2019.That’s not the case in 2023. This year, one-third of respondents in the Northeast say they’re increasing frame purchasing by 10% to 20%, compared with 19% who are cutting back on buying by 10% to 20%.
• Frame Selling. In terms of materials sold, consumer preferences seem pretty evenly divided…with plastic and metal coming in at 28% and 29%, respectively, and another 28% preferring combination (metal and plastic) product.
• Lens Preferences. Poly has definitely taken off and is now way ahead of Trivex when it comes to lens material sales. In fact, 34% of lenses sold are now in polycarbonate. That’s more than double the sales of either Trivex or high index.
• The Web. Ninety percent of ECPs in the Northeast now sell online. Here’s the top categories they’re currently selling on the internet: reading glasses (39%), contact lenses (37%), and plano sunwear (33%). As for social media, more than a third (35%) post weekly, while 28% say they post daily. The latter is up from 22% a year ago.

The West…

The Far Side

A mix of plains, mountains, and deserts, the West region of the U.S. includes 13 states plus Guam. Among its demographic distinctions? California is the most populous state in the U.S., and, with an average age 31.1, Utah boasts the nation’s youngest residents.

According to the consumer price index (CPI) calculations for May, the CPI is up 0.4% month to month in the region, and up 4.5% from a year earlier. At 0.7%, its largest metro area (Los Angeles-Long Beach-Anaheim) saw a much higher increase in CPI.

The unemployment rate has remained relatively steady in the West this year, sitting mostly at 4.0% for every month except February, when it rose slightly to 4.1%.

The region does, however, have the unwelcome distinction of claiming the state with the highest unemployment in the country…Nevada, at 5.4% in May. That’s high, but nothing like it was in 2020 when Nevada topped the charts with a mind-bending 25.3% unemployment rate.

As for eyecare professionals, when ECPs in the West were asked how their bottom line compares with 2022, exactly half reported it’s up from a year earlier. Within that group, 9% have seen YOY increases of more than 20%.

In Focus

According to the Bureau of Labor Statistics, prices, as reflected in the consumer price index for May, are up 0.4% month to month in the region. Also called the marketbasket, this CPI stat represents a huge change from 4.5% a year earlier.

In Practice

Here’s a glimpse at some of the top trends that are impacting ECPs in the West so far in 2023.

• Scheduling Frequency. One-quarter (26%) of ECPs surveyed schedule appointments hourly, while nearly another third say appointments run longer than 60 minutes. The lion’s share of ECPs (42%), however, indicate that they see more than one patient in a one-hour period.
• Purchasing Patterns. ECPs in the region are evenly divided when it comes to increasing or decreasing their frame purchases in 2023. While 47% say they’re buying more product, 41% report they’re cutting back. As for how much, numbers on both sides of the purchasing perimeter are evenly divided between 10% up or down and 20%-plus up or down.A similar pattern is seen on the spectacle lens side, with 48% of ECPs surveyed buying more and 43% planning to buy less throughout the year. Only 9% say they are purchasing the same amount as in 2022.
• Lens Preferences. With high index and Trivex nearly tied for second place, polycarbonate comes out the winner. Nearly a third (31%) of ECPs give it the nod as their spectacle lens material of choice. Coming in at 8%, glass lenses, though substantially less popular than the other options, still seem to fill a spot in the hearts of many ECPs.
• The Web. Only 5% of ECPs surveyed say they don’t sell anything online. Here is what those who do are selling: plano sunwear and reading glasses (37%), accessories (34%), Rx sunwear (33%), contact lenses (32%), and Rx eyewear (27%).As for social media, 36% post daily and 31% do so weekly. That’s a contrast to the Northeast, for example, where once-a-week posting is most common. In this region, 5% report they don’t post to social at all. The channel of choice for business? Facebook, for 31% of ECPs, followed by LinkedIn, Instagram, and Twitter.

The South…

Positive Directions

Encompassing 16 states plus the District of Columbia, the South is the most racially diverse region in the U.S. It’s also the fastest-growing area in the country.

According to the Brookings Institute, 31% of the region’s metro areas, especially several in Florida, have been defined as resilient (a top rating) since the Covid-19 pandemic. Economies relying on oil and gas—primarily parts of Texas and Louisiana—have struggled. On the other hand, areas specializing in technology, and business or educational services, like Dallas and Austin, have far outpaced others.

Drilling down in optical, more than 6 out of 10 practices report that business is up this year. Only 29% say it’s down, and most of those register less than a 10% drop from 2022.

What about price points? More than half (54%) say moderately priced product is where the money is. Only 25% give premium product the nod, while another 21% point to entry-level product as the key to growing this year.

In Focus

Looking at the region as a whole, the United States Bureau of Labor Statistics reports that prices in May rose 0.2% from April and 4.4% year-over-year.

In Practice

Here are some optical-specific trends that are currently impacting the region.

• Scheduling Frequency. While just under a quarter of practices (22%) report scheduling appointments for one hour, nearly half (48%) say that appointments are shorter than that. Nearly a third (29%) report that appointments are scheduled to last more than an hour.
• Purchasing Patterns. At 54%, moderately priced product gets the nod by twice as many ECPs as premium product (25%). And only 21% report that entry-level product is their preferred category for purchases this year.
• Lens Preferences. While polycarbonate comes out on top at 30%, Trivex (25%) is still a popular lens material in the South. Plastic is the material of choice for another 19% of ECPs, while high index is preferred by 16%. Glass still retains a following, with 9% of ECPs selecting it over other materials.
• The Web. Only 8% of area ECPs don’t sell anything online. Unlike other regions, Rx sunwear is nearly tied with plano sunwear for the most-sold online product categories. In order, the other top online sellers in the South are contact lenses, followed by reading glasses and accessories. Of those who don’t currently sell online, all but 13% report they plan to do so within the next two years.When it comes to social media, 47% of practices post weekly, a healthy 26% post daily, and 16% post only monthly. One out of 10 practices shares they actually post more than once a day.
  Whereas ECPs in other regions say they prefer Facebook, LinkedIn is preferred by 34%, compared to 30% for Facebook. Another 23% say they prefer Instagram.

The Midwest…

Measuring the Middle

The Midwest’s 11 states are home to roughly one-fifth of the U.S. population. Like the Northeast, its population is dropping as more Americans move south and west. Chicago, IL, and Columbus, OH, are the region’s largest cities. The fastest growing one? Rapid City, SD.

While the U.S. population at large increased by .4% between 2020 and 2022, the only Midwestern states to grow during those years were, in order, Indiana, Iowa, Minnesota, Nebraska, and South Dakota.

What’s the outlook for independent ECPs throughout the region? Just over half (54%) of independent practices report their bottom line is up this year over last. When asked about growth, the number one answer among practices is that sales will be up, but by 10% or less.

The greatest potential for sales is reported by area ECPs as contact lenses and accessories. That’s different than the West, for example, where contact lenses took fourth place. As for price points, moderately priced product is selling twice as well in the Midwest as either premium or entry level frames, lenses, and contact lenses.

In Focus

Prices, as defined by the region’s consumer price index, rose 0.3% in May. That’s up 3.7% from a year ago and represents quite a change from May 2022, when the 12-month, year-over-year rate was up a whopping 8.8%.

In Practice

What’s happening in optical with practices in the Midwest so far this year? Here’s a look at several top trends.

• Scheduling Frequency. More than half (52%) of respondents say appointments run more than an hour. Another 19% of practices now schedule one-hour appointments, while 28% say appointments last less than an hour.
• Purchasing Patterns. While the percentage of ECPs that plan to increase frame purchases is somewhat similar to the number of ECPs reporting they’re reducing purchases, the biggest number (31%) say they’re cutting back frame purchases by 10% to 20%.
• Frame Selling. At 37%, metal/plastic combination frames are the most popular in 2023. Preferences definitely vary among the regions. In the Northeast, for example, combination frames are slightly less popular than plastic.
• Lens Preferences. Among ECPs planning to change their buying patterns from 2022, the largest percentage (30%) say they’re increasing spectacle lens purchases by more than 20%. At 36%, polycarbonate is the lens material of choice this year. That’s followed, in order, by plastic and Trivex.
• The Web. Nine out of 10 Midwestern ECPs report they’re currently selling some product online.The product of choice? Contact lenses, according to 33% of respondents. What else? Other categories sold online range from plano sunwear, reading glasses, and accessories, to Rx eyewear and sunwear. Among those who don’t currently sell eyewear products online, only 16% say they have no plans to do so within the next two years.
• What about social media? Only 1% of area ECPs don’t post at all, whereas 41% them say they post weekly. More than a quarter (27%) report they post every day. The channels of choice for ECPs in the Midwest? Facebook (31%), Instagram (28%), and LinkedIn (27%).