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The Hairy Woodpecker

Birding Business July 2015 : State of the Optics Industry 2015

State of the Optics Industry 2015

BY JOHN E. RIUTTA | Contributing Editor

IT’S TIME FOR US ONCE AGAIN to revisit a question that periodically demands fresh consideration. I mean, of course, “What is the state of the sports optics industry today?” As business owners, managers, and other participants in the commercial side of the one activity that more than any other is inextricably bound to binoculars and spotting scopes, it is not only beneficial for you to stop and consider this question, it is vital to your business’ interests that you do so.

To put it bluntly, the state of the optics industry in 2015 is that it is more deeply entangled than ever in trying to sort out the dramatic changes that have been sweeping through it for the past decade; changes so dramatic that some long-established participants have left the market entirely, one (Opticron) has “jumped the pond” from England and expanded into the U.S., and wholly new players have been enabled to spring up seemingly ex nihilo. Add to this the further proliferation of original equipment manufacturing (OEM) production and sourcing by non-optics related companies, the changes in marketing, and the continued strengthening of social media and its transfer of power from the professional product reviewer to the amateur, and it’s not difficult to see how the established optics firms are fighting a multi-sided front in the battle for market share and visibility.

Now, to be fair, OEM manufacturing has been going on for decades. Many well respected optics brands have been getting their binocular and spotting scope products from specialist manufacturers in Asia since before many of us were even born. The problem is that now not only are companies, whose primary business is not the marketing and sales of sports optics, going direct to OEM manufacturers for the acquisition of “house-branded” products, some of the companies from which they obtain them are not particularly adept at producing a reliable product. Consequently, whereas a few years ago, sporting goods retailers and others sourcing OEM products for themselves simply muddled the market space at the retail level, now a disturbing amount of low quality, low cost products are available through the OEM channels. As inexperienced OEM “shoppers” often don’t have the experience to distinguish between factories offering good quality products and poor quality products (indeed, in some cases a customer may not even know the actual factory from which the product is coming as the entire purchase is transacted through agents), the results are now not just a muddled market but one rife with unrealistically inexpensive products as well.

As I’ve written in the past in this very publication, the proliferation of OEM sourcing has also led to a stagnation in the levels of innovation seen in the sports optics industry. Not that the basic designs of binoculars and spotting scopes particularly lend themselves to dramatic innovations; the essential design of both types of optical products are, at their core, not very different now than they were decades ago. And this is certainly not to say that the better OEM manufacturers are not capable of developing new ideas; truly, some of the best binocular and spotting scope designs of the past two decades were created by engineers at OEM manufacturers. Yet beyond the seemingly endless struggle to position products at lower price points in all but the highest brackets, and the expansion of ED glass into products as low as the $300 price point, aside from Swarovski’s modular spotting scope design and Maven’s customizable binoculars, little that is truly innovative has been seen for some time.

Marketing has tried to fill in some of this innovation gap but there are only so many ways that lens and prism coatings can be written about before the effect on the customer becomes numbing. With so many products now being OEM, and so many of these being the same as others also on the market, differentiation is more critical than ever to draw a customer toward one brand over another. At the premium price and performance brackets this isn’t an issue; companies selling products at these levels have effectively employed identity marketing for years, which is ironic as their products are the most visibly distinctive from one another. Yet even here, with the advent of the Zeiss Terra and the higher priced but still lower than highest level bracket Swarovski CL Companion, there is a realization that identity marketing only goes so far and that good, old-fashioned price and market size competition is as relevant
as ever.

But with the increased power of social media, marketing professionals themselves are enmeshed in a struggle for their own positions of influence. Whereas once an optics firm’s marketing department may have structured and controlled the ever-important “message,” Facebook and Twitter users are now calling many of the shots, to say nothing of the new-found power of amateur, and often anonymous or pseudonymous “reviewers” publishing to online retail websites. Weeks, even months of carefully wrought marketing messages can be quickly undone by the idle thoughts of a few individuals who may have little to no understanding at all about what they are writing. Of course, this is not the exclusive bane of the optics industry; a host of other industries are also struggling with this same challenge. Thus, particularly when it comes to binoculars and spotting scopes, the managers of retail businesses, as well as the individual customers, are now in the unusual position of having professional marketing campaigns be their most reliable source of useful and reliable information.

In time, as the market re-saturates after the change in participants, social media plateaus, and people become as cautious about online retail site reviews as they once became of professionally developed advertising, things will begin to settle and - it is hoped - a bit more normality will return to the industry. Until then, many things will remain somewhat fluid as firms both old and new continue to weather the winds of change that as yet show few signs of calming.