ONLINE ORDERING
Online Ordering Habits of O.D.s
We took a sneak peek at what you and your colleagues are ordering online. See what we found out.
Bob Kronemyer, Contributing Editor

Although contact lenses have been the staple of online ordering by optometrists, spectacle lens orders are becoming a growing segment because of reduced error and quicker turnaround time.

I've interviewed key people from different e-commerce companies to find out how this trend has affected the way you and your colleagues are placing orders online. We'll also take a look at how many of you are actually participating in this mode of purchasing products.

E-Dr.

E-Dr. (www.e-dr.com), based in Jacksonville, Fla., has been offering online ordering since August 1998.

• Online offerings. E-Dr. offers contact lenses, frames, sunglasses, contact lens solutions, office supplies and equipment online, among other things on its Web site.
  The company also offers specially negotiated deals, volume discounts and closeouts from a variety of contact lens, frame and pharmaceutical suppliers.
• Member profile. According to President Scott Schoenherr, of the 8,000-plus members, about 6,400 are O.D.s. About 80% of online orders are placed by O.D. offices, with the remaining 20% evenly divided between ophthalmologists and opticians.
• The process. There is no membership fee to register and no additional cost to order online. The process for using the
  E-Dr. Web site is simple: Just log on and choose a manufacturer, select the parameters and go to the shopping cart. Verify your item and click the submit button.
  Optometrists ordering from E-Dr. have a choice of about 12 spectacle labs. Beginning this year, though, they'll have the additional option of selecting the E-Dr. lab.
  "This is like a private label. We'll decide the lab, and in return the doctor will receive a discounted price," Schoenherr explains. "A lot of labs have a great relationship with their O.D.s. We don't want to get in the way of those relationships, so O.D.s will continue to have a choice between selecting a lab of their choice or the private label."
• Trends. Schoenherr predicts that a significant number of O.D.s will take advantage of the private label for a percentage of their business.
  Since the Web site's inception, contact lens ordering has actually decreased as a percentage of overall online ordering.
  "I believe this has less to do with the ordering habits of O.D.s and more to do with the fact that we now offer several new product categories," says Schoenherr. "We started off with just contact lenses, then we expanded to eyeglass frames. Now we're growing our spectacle lens category."
  Despite this fact, currently, the most popular category of online sales has consistently been contact lenses, representing about 75% of online orders placed by O.D.s. According to Schoenherr, contact lenses are the most commodity-like product.
  Overall, lenses and frames each represent about 10% of O.D. ordering online. The remaining 5% of online ordering is of miscellaneous products -- consisting mostly of office supplies and solutions.
  "O.D.s have always ordered large quantities of these products. They're simply becoming more comfortable ordering them online," says Schoenherr, noting that a person's first order will likely be contact lenses. "What we're finding is that once users get over the initial hurdle of ordering online, it's much easier to get them to order other products," he says.
  Although E-Dr. carries all the major contact lens makers, the Web site has a major push in the spectacle laboratory arena.
  "Existing doctors are purchasing more and more every month," Schoenherr says. "In the first quarter of 2000, our average doctor purchased about $800 a month online, compared to around $1,100 for the last quarter of 2000." Only a very small percentage of O.D.s choose not to order more than once.

Eyefinity

In April 2000, Eyefinity (www.eyefinity.com) began operations.

"We're more of a pipeline to enable commerce to occur among existing entities," says Beth Smith, vice president of e-commerce and chief technology officer. "We're not trying to disintermediate existing product suppliers or labs in the optical space. We're trying to provide the means for them to connect and create more efficiencies in their operations."

• Online offerings. "We've deliberately chosen not to offer a lot of products with an e-mail or fax on the back end because through our talks with O.D. offices, we've discovered that this doesn't meet their needs," states Smith.
  The company also offers incentives for joining and using its site. In fact, they just recently gave away a trip to Hawaii.
• Member profile. Smith notes that the company has 15,000 doctor offices who are ordering from more than 300 labs. "We expect to exceed 7 million online lab orders in 2001," she says.
  Smith estimates that more than 50% of the Web site's 15,000 members are O.D.s, followed by ophthalmologists, then opticians. "We have substantial repeat business," she says.
• The process. Registration is free and there are no additional order fees.
  "When a doctor prepares to place an order, the inventory level is known for that particular product. The doctor can track the order status online until it shows up in the office, or until it is delivered directly to the patient." Practitioners can also contact a full customer care center by telephone to obtain assistance during any part of the process.
• Trends. At Eyefinity, prescription and spectacle lenses is the single largest category. According to Smith, online contact lens orders is a growing category at Eyefinity.
  "This service will be widely available beginning in early 2001," she says.

First Insight

In October 2000, First Insight (www.first-insight.com) first started selling spectacle lenses online. Its Web site is totally integrated into the ordering systems of 83 lab locations nationwide.

"We're basically integrating the doctor with his vendor," explains Nitin Rai, president and CEO of First Insight. "We don't price the order. The pricing is between the doctor and the vendor. We simply allow the doctor a more efficient way of ordering from his vendors."

• Online offerings. Contact lens ordering, which was the company's first offering in July 2000, is supplemented by the maximEyes practice management system as well as the optometry.net Web site builder for practices. Future offerings will include spectacle frames and pharmaceuticals.
• Member profile. First Insight currently has about 1,200 members -- primarily O.D.s.
• "The average O.D. practice may gross $200,000 to $300,000 a year, with half of that revenue coming from optical sales," Rai says. For online purchasers, "we have a high loyalty rate." Furthermore, paradEyes.com is an Internet-based product developed by First Insight that permits online ordering.
• The process. First Insight doesn't charge a membership fee.
  "An O.D.'s online order is electronically transmitted to the ordering system of the particular laboratory of his choice," Rai explains. He also notes that O.D.s are assured of the order's accuracy because he can view the product catalog online, which has all the edit checks.
  According to Rai, online orders go into the lab system before any of the hand-entered orders -- thus taking priority. Consequently, "O.D. practices are finding that their turnaround time has greatly improved. Instead of taking 3 to 5 days to receive an order back from the lab, it only takes 2 to 3 days," says Rai.
• Trends. The number of spectacle lens orders have reached several thousand a month, now representing roughly 50% of overall orders. The Web site also sells several thousand contact lenses each month.
  Rai predicts that the sale of spectacle lenses will likely surpass that of contact lenses in the near future.

Optical Auctions

Optical Auctions, (www.opticalauctions.com), started in 1998, is the ophthalmic version of e-Bay.

• Online offerings. Currently, members can choose from four categories to search for products they wish to bid on: lens products, eyewear products, instruments and equipment, and dispensing and merchandising.
  Optical Auctions offers a variety of new and used products for the bidding. The company even offers incentives to register on the site. The site just offered the chance to win a free cruise to the Caribbean. The company will also soon offer a bidder incentive program, called Gavel Goodies, where bidders receive reward points for placing their offers.
  Optical Auctions offers an escrow service as a safeguard for buyers and sellers for a $50 fee per purchase, Tracey Morrison, director of marketing at Optical Auctions, tells me. The service receives the buyer's payment and ships the product(s). Once the buyer decides to keep his purchase, the escrow service then releases the payment to the seller.
• Member profile. Optical Auctions has more than 3,000 registered users who are in some way active in the auctions. Sixty percent of the site's database consists of optometrists, and the other 40% belongs to ophthalmologists, opticians, retailers and others. On average, between 600 and 700 people visit the company's site every day.
• The process. You're not required to sign up or register unless you're going to participate in the auction.
  If you decide to participate in the company's online auctioning, fill out the application provided online. Once you've received approval, browse the categories to find what you're looking for. When you find the item, simply log on and place a bid.
  The bidding section lets you keep tabs on the opening bid amount, the current bid and the auction status. If your bid wins, you'll receive an e-mail from the company letting you know.
• Trends. Morrison says that instruments are usually pretty popular, but that she sees a lot of contact lens sales as well, among other products. The top three selling instruments are keratometers, refractors and slit lamps.
  According to her, the popularity of certain categories or specific products tends to fluctuate. "It really depends on the market," she explains.

VisionWeb trends

Pending Web site VisionWeb in Austin, Texas, is an industry alliance between lens manufacturer and lab owner Essilor of America and Johnson & Johnson. VisionWeb will be an open and neutral site with secure financing.

"We've already raised tens of millions of dollars," notes Dennis Upah, VisionWeb president and CEO. "We'll have direct interfaces into the inventory of the manufacturers, which will enable us to be far more efficient than other Web sites."

"We're actively talking to virtually all other industry players to join us as equity participants in this venture," Upah confides.

Each equity partner has also committed to specific volume, content and sales/marketing support, as well as a term of exclusivity with the Web site.

• Online offerings. Upah anticipates that spectacle lenses, contact lenses and frames will be the three categories most in demand with optometrists on the site.
  "We'll also offer online claims processing, Internet-delivered practice management software, discounted back-office supplies and free Web-hosted sites for practitioners," says Upah.
  The company hopes to eventually provide content and continuing medical education.
• Member profile. VisionWeb expects its Web site to be available to a group of limited users this spring, followed by general use next fall.
• The process. VisionWeb intends to charge a modest subscription fee.
  "Because we're working with industry leaders, our site is devoted to making sure that the Internet is orderly and nondestruc- tive. As a result, you're not going to see things such as price comparisons," he explains.
• Trends. Because the site isn't up and running yet, Upah had no trends to report.

The only way to go

All told, many of you are ordering your products, mostly contact lenses and spectacle lenses, from online services. However, many of you are leaving yourselves out. And the reasons underlying that fact are numerous. See this month's Cybercare column by author Richard Hom, O.D., F.A.A.O., to find out what's holding some of you back. You may even discover a reason to try online ordering.

And if things continue the way they have been, it may be the only way to order products in the future.