Why Bad Eyesight Is Going To Get (Even More) Expensive
Let me tell you why.
This is going to require a bit of audience participation. Not too much, but just a little bit - bear with me.
Have you ever heard of Ray-Ban sunglasses?
What about any of the following brands that make eyewear?
Dolce and Gabanna
What about the following stores that sell eyewear:
If you have less than optimal vision, chances are you own a pair of prescription glasses from one of them. If you live in a sunny area or like going to the beach, chances are you own a pair of sunglass frames from one of them. If you have perfect vision and live in a location with very little sunlight, you’ve at least heard of one of these brands.
Why am I telling you this?
Here goes - they’re all owned by the same company; ironically, by a company you’ve never even heard of.
You haven’t heard of Luxxotica by design, not by accident. If 50% of all stores were labeled Luxxotica, most people wouldn’t quite like that. If 50% of all frames were branded Luxxotica, most people wouldn’t quite appreciate that. Instead, the illusion of choice is provided, despite all the aforementioned brands being created by a single producer.
Today this Italian company is the largest eyewear company in the world, and the majority of people aren’t even aware of it. Well, now that you’re part of an informed eyewear minority, let’s answer the grand question at hand.
Why is having bad eyesight looking to get even more expensive than it already is?
And thus, I introduce you to Essilor. Of course, no one’s really heard of Essilor either (same reason as stated above).
Essilor is a French based company that also holds the title of the World’s largest corrective lens producer. If you wear contact lenses - I just wanted you to meet the likely creator of those marvelous little creations.
Well, guess what?
These two mega powerhouses are merging. Yes, you read that correctly. The world’s largest eyewear company and the world’s largest producer of contact lenses are becoming one and the same.
The new optical behemoth would control every aspect of the supply chain for numerous players in the eyewear industry - an efficient vertically integrated company that can make frames, offer insurance, and sell lenses, while still galloping away with a gross profit of 64 cents for every $1 spent.
EssilorLuxxotica will be stocking its own stores primarily with self-created goods because of its cheap cost of production. What if you’re a competitor who wants to sell a pair of ‘Day-Bans’ (I just wanted to use my initials here; please ignore the poorly fabricated name)? Well, you can either pay a premium to have your DB frames displayed at Sunglass Hut, or you can take a hike. The result - one enormous company that slowly but surely strangles every smaller competitor that can’t produce eyewear at the same low cost that EssilorLuxottica can. According to two members of the Federal Reserve Board, [mergers] allow companies to increase profits by hiking prices. They don’t improve efficiency.
Today, you may have options to choose between based on color, size, style, brand name, etc. But don’t be surprised if a year down the line, price can’t be one of the factors that helps you differentiate one pair of glasses from the next. Chances are, that in that sea of supposed choice, all the water will be coming from one massive, merged, rich, glacier named EssilorLuxxotica.
The craziest part of this entire narrative - the merger was announced in January of 2017. And no one even knows that Luxxotica or Essilor exist, let alone the upcoming combination of the two.