In The Press
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BRW Magazine, October 2007 Internet visionary Ever wondered why a pair of reading glasses can cost as much as a mountain bike? The answer, according to Kevin Reece, the entrepreneur behind prescription glasses e-tailer GlassesOnline, is not so much in high-tech materials and expensive engineering, but the huge margins in an optical dispensers' market dominated by a few big players. The Italian Luxottica Group owns 40 per cent of the Australian retail market with optometrists under its wing such as OPSM, Budget Eyewear, Laubman & Pank and Merrington, plus the majority of the wholesale market with licences to 25 brands including Gucci and Versace. The prescription glasses industry in Australia, valued at $1.2 billion in annual revenue, is an alluring prospect when about half of the national population uses glasses for reading or to correct vision. The average sale price of frames with lenses is about $300, more likely to be worn by professionals, a market that is forecast to grow in line with Australia's ageing population according to research company IBISWorld. Reece has taken advantage of the low-cost online environment with a low-cost business model that does not require expensive shop fit-outs or overheads - and offers a discount marketing promise to match. Customers are encouraged to buy frames similar to those they already own, with exact dimensions and guidance in how to compare styles available on the site. He sells the same styles that are available in high-street stores from as little as $65, including lenses. While some designer frames are available, Versace and Gucci are not among them. Operating since February 2006, GlassesOnline is selling in excess of 500 frames a month (which compares with about 100 a month in a glasses shop) and anticipates revenue of $1 million in 2007-08. He plans to continue to focus on volume, concentrating on channels like bank reward programs. |
