The Global Eyewear Industry Is $150 Billion Juggernaut And Expected To Grow Further This Decade: What You Need To Know

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The Global Eyewear Industry Is $150 Billion Juggernaut And Expected To Grow Further This Decade: What You Need To Know
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After COVID-19 hit, 2021 is seen as the most critical year in what is set to be a two-year recovery period for eyewear retailers, according to Euromonitor. Sunglasses, spectacles, and contact lenses have all depicted a significant growth following the record sales drop in 2020.

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Statistics show that the global eyewear market size was worth $147.60 billion last year, with solid compound annual growth rate expectations around 8.5% between 2021-2028. In the U.S. alone, the sunglasses market was worth $4.78 billion, with Vision Source at the top of the optical retailers.

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So, how is the industry’s comeback shaping up –especially sunglasses– after some of its darkest days?

Hitting the Upturn Despite Sales Dive

Due to the lockdowns amid the pandemic during most of 2020 and the first half of 2021, eye care professionals had to forcefully shrink their service offerings. Face-to-face eye exams and new contact lens fittings were kept to a minimum, hence slashing growth across categories.

The restricted in-store services at ECP offices and optical shops kept consumers from purchasing new eyewear, and according to a report by Euromonitor, “increased hygiene requirements and other restrictions to in-store shopping impacted sales in optical shops.”

In the case of sunglasses, sales fell by 45.6% in 2020 according to data collected by the Vision Book. Specifically, opticians earned $137.4 million in 2020 sunglasses sales alone, against the $253.2 million from the previous year.

The steep decline in sales shows how sunglasses are not considered an essential item by consumers and their renewal or purchase has been relegated to later months.

However, the eyewear market in the U.S. looks healthy, with a small number of large, multinational companies dominating the remaining top-selling brands within contact lenses and spectacles, with Ray-Ban, Dior, Gucci, Boss, and Prada dominating the sunglasses segment.

Drivers Behind Recovery

The restrictions brought along new consumer habits, “including a mounting awareness of and concern for eye health and proper eye care.” So, states Euromonitor, the sheer medical necessities of contact lenses, spectacles, and sunglasses, will “aid the category in making a swift recovery over the coming months and years, as pandemic restrictions are increasingly lifted.”

In the year 2020, sunglasses market value dropped to $3.31 billion and is set to grow steadily as of this year, overtaking pre-pandemic levels by 2023 when it will reach $5 billion, according to statistics. In fact, predictions for Q2 seem very positive as the steady roll-out of the vaccine and the lifting of lockdowns across the U.S. are playing a big role in consumers' travel and leisure mindset.

This year, notes to a report by shopping platform Lyst, searches for dresses increased 371%, sunglasses 198%, and beachwear 192%. “In key markets, the roll-out of vaccinations and lifting of lockdown saw demand increase for dressier styles.”

The growth of leisure apparel sales is also pulling sunglasses recovery, as the latter is an irreplaceable fashion accessory for summer getaways.

New Consumer Trends and Market Response

There is absolutely no way to understate the huge impact COVID-19 has had on consumer purchase habits and channels within the eyewear industry.

The growth in eyewear’s e-commerce penetration was driven by retailers investing both in offering virtual eye exams, and also a whole set of apps to help consumers through their online buying process including that of prescription sunglasses.

Warby Parker, Zenni, EyeBuyDirect, and SmartBuyGlasses got the most out of their websites and mobile applications to replicate the in-store experience with virtual trying-on functionalities.

Further, social media has also played a key role in shaping consumer habits and the way retailers respond. “The presence of a sizeable audience on platforms such as Twitter, Instagram, and Facebook is offering new growth avenues for the market,” as stated by Grand View Research.

The Impact of Social Media

According to Designer Optics, “social media gives eyewear retailers the chance to carefully gauge consumer preferences and choices. This allows them to inch-target their product offerings based on the different locations and markets.”

Further, the pandemic opened up new influencer marketing and affiliate marketing strategies that allow retailers to access markets more effectively.

Also, with the stinging growth of e-commerce across all retail categories, the lockdown measures turned eyewear consumers to relying more on product reviews online. “E-commerce websites also enable users to read and write reviews about products, enhancing the customer journey, and promoting them to use e-commerce distribution channels.”

“The rising popularity of the online distribution channel has resulted in a notable rise in the number of online eyewear start-ups worldwide, such as Eyewa, Hubble, and Ace & Tate.”

However, market predictions assert that eyewear retail won’t shed in-store sales any time soon, and omnichannel sales will be the way to go for some.

“Several companies such as Vision Service Plan, eyebobs, LLC, and Glassic, which earlier only had an online presence, have opened physical stores in recent years to generate awareness regarding new product updates, and increase footfall.”

Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)www.valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
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