Interview: Imran Hakim CEO Hakim Group
Hakim Group’s boss tells Joe Ayling why the firm remains invisible after after acquiring practices, allowing them to retain their names, and how social media can help level the playing field for independents.
Joe Ayling (JA) As the boss of a string of independent optical practices, how do you see the independent sector evolving in the future?
Imran Hakim (IH) The independent sector is undergoing rapid change. Many practices are seeing a fall in the number of sight tests being booked year-on-year for a variety of reasons and in many cases have compensated for this by increasing their average order values, such as by selling better products and raising prices for these products. However, many independents have not addressed the underlying problem: the number of patients they are seeing is falling year on year. As a result, there will come a tipping point where no increase in prices will compensate for the reductions in footfall. This will lead to a rising number of practice failures.
But it’s not all doom and gloom. There are great opportunities for practices who recognise this issue and attempt to increase their footfall by utilising their existing database, using modern marketing techniques and looking to create a better customer experience. Adding niche services that can’t be provided by multiples will also set them apart. For example, at the Hakim Group, we are introducing colorimetry and OCT machines as standard.
Some practices who have been quite stagnant, will go to the wall. The practices that are managing to leverage newer ideas, opportunities and technologies while adapting their customer experience for the 21st century consumer, will continue to thrive. We will get a very strong cohort of independent practices dotted around the country who continue to flourish and trailblaze. We want to make sure that our practices are part of that group.
JA How can independent opticians both within the Hakim Group and outside compete with the operational and marketing might of the multiples?
IH The great thing about the internet and developing technology, as well as the 21st century consumer, is that together they have almost levelled the playing field.
Historically, there was no way that we could compete with the might of the marketing budget that multiples such as Specsavers would have. Today, however, if you’re smarter and embrace what is happening on the ground at a local level, there are a lot more technologies that are directly relevant to how the consumer is behaving, showing you how they want to shop.
This plays straight into our hands. We are looking at the modern-day consumer and how these technologies can be adapted to communicate with people. Not just every two years when they’re due an eye examination, but in between appointments. So when an appointment is made, the whole journey is ongoing. We communicate directly with these customers through new mediums, such as phones, iPads, even watches, and new channels such as real-time online booking, Facebook and Twitter, allowing them to contact us as and when they want to.
A classic example of this is we now get people making their appointments at 11pm through Facebook. That would never have happened a few years ago. We have to make sure we introduce more ways that are open and receptive to how consumers are behaving and how they want to interact with us, rather than try to force them to do so in ways that are only convenient for us.
What we’re doing is making ourselves more accessible and more in line with our customers’ lifestyles.
JA Why does the Hakim Group allow its partners to keep their original name?
IH In many cases when we’re buying practices, we are dealing with businesses that have a long-established history or legacy in the town in which they operate. Their name stands for something and we celebrate this.
We build on it, rather than destroying all that goodwill and legacy that’s been earned over the years, by rebranding and bringing in a totally new team.
You will find that the Hakim Group is not visible in any of our practices. In fact it’s a deliberate strategy to keep it invisible. People like independence and so do we.
We can do all the heavy lifting behind the scenes from a back office point of view, similar to what a group set up will afford you, without having to brand our name at a local level because this brings no added value to the consumer who wants to shop at an independent.
What the consumer wants is to go to the practice they have been visiting for many years, sometimes for generations and they want to continue enjoying their eye care at the local independent. That is why we keep the name.
JA Should independents promote themselves as clinical or fashion-led outlets?
IH It is important that independents manage to balance both aspects of clinical and fashion within their practices. There are two reasons why patients are coming to us. The first for expert clinical eye care and secondly for the selection of fashionable eyewear available.
If we stock brands like Bvlgari or Gucci, we’ve got to make sure that the shopping experience is in keeping with the brand we are representing. Currently, most independents are failing to deliver this experience.
If you went into a well-known high street location to buy Gucci or another fashion name, then there is a certain expectation that consumers have and they will be willing to pay for the privilege of having that experience.
We’ve got to understand that most of our revenue comes from the retail of spectacles and mostly this is the retail of fashion labels. We need to make sure that we are savvy and proficient at retailing branded products.
At the same time, we’ve got to remember
that eye care is one of the fundamental reasons why a patient will come to us – for peace of mind about their vision. That’s why our clinical practice has to have an equally loud voice.
What you can’t do is completely focus on clinical, or completely focus on fashion. You have to have an equal voice for both aspects to create a thriving business for the future.
JA What can optical practices learn from other areas of business and retail when it comes to reinventing themselves?
IH In almost every other industry, businesses are having to reinvent themselves to adapt and react to competition, new technologies and changes in consumer behaviour.
A classic example I would give would be that of a book store. With the evolution of Amazon and the development of the Kindle and online books, many retailers have had to reinvent their offering.
Some of these stores have looked at the coffee shop experience, grabbing a book and a nice cup of coffee, finding a space to sit down and relaxing, marrying it up inside their store. They have managed to redefine what it is the consumer is looking for when they go to them.
You want to create a reason for them to come to you. This is exactly what opticians have to do. They have to offer a destination and an experience that the consumer can’t get elsewhere.
To some extent, because of the eye care experience, it can’t be done online, so there’s a certain degree of protection afforded to this side of the industry but I wouldn’t sit there and think that’s never going to change.
Warby Parker is hot on our heels in the US. It has taken the online experience and is now bringing it back to a bricks and mortar experience. We have to look at what it’s doing well and use this information to our advantage, adapting it for our own offering.
JA How will the role of dispensing opticians and optometrists evolve in the future? Should dispensing opticians be able to refract and do you encourage your practices to tender for enhanced service contracts?
IH I don’t see roles changing much, but what I do see happening is practice owners having to learn a lot more about the business side of their marketplace. They won’t just be able to focus on the clinical side of the practice and expect the business to take care of itself. It’s simply too competitive out there and technology is moving way too fast, along with consumer behaviour, for them to ignore.
We encourage our practices to tender enhanced service contracts because patients won’t be able to access them online. These niche areas are going to be the lifeblood of independent practices, where we can be more competitive and can demonstrate our clinical excellence and the breadth of ability that our practitioners have and we have to look to leverage these as footfall drivers.
JA How can high-street optical practices help lessen hospital waiting times and reduce the burden on the NHS?
IH By the year 2030, the UK population is expected to be over 71 million, which is a rise of 10.2% and the average age of the UK population is also expected to rise during that time. In a growing and ageing population, there is inevitably an increased burden on the health services at a time when there are budgetary restrictions within all aspects of the NHS.
No matter which way you look at it, all the factors point in the direction of having to come up with more creative ways of lessening that burden within our local communities.
From an optical perspective, independent practices have a huge role to play by offering enhanced service contracts and creating partnerships with local GPs and hospitals. This is a big area of development for independent practitioners over the next 10 years.