Successful approach to a changing market: lessons to be heard… : The Hearing Journal

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Since the emergence of the idea of ​​over-the-counter hearing aids yet to be realized, the term “disruption” has been on the mind. Third-party administrators (TPA), hearing aid insurance coverage, big-box stores, vertical integration of manufacturer-owned practices, and direct-to-consumer delivery models are all changing the landscape of hearing healthcare in America. . For some, there is an undercurrent of paranoia that the hearing health industry is perched precariously on a rapidly burning platform. Market conditions change for every industry and there are lessons to be learned from other industries on how to approach change successfully.

IS DISRUPTION REALLY A TRUE WORD?

The threat of “disruption” evokes fear and worry. But disruption doesn’t always mean disaster. Disruptive innovations, by definition, occur when competitors enter one of two types of markets. In the case of a new market entry, “disruptors create a market where there was none. Simply put, they find a way to turn non-consumers into consumers. 1 In a low-end scenario, disruptors cater to consumers who are not looking for the best option; they just want a “good enough” product.

The OTC delivery model targets consumers who otherwise would not seek out hearing technology or those who do not perceive hearing loss significant enough to actually invest in hearing care or technology. It remains unclear if current non-consumers will respond, increasing the size of the hearing market. Additionally, it is unclear whether new market entrants could gradually improve the quality and performance of their products and begin to compete more directly with prescription products by targeting existing customers. 1 Disruptive innovations are initially considered inferior by most consumers of existing products and price alone is not enough to influence them. If, however, the quality is perceived to match or exceed their expectations, they adopt the new product and happily accept its lower price, which ultimately forces the market as a whole to lower prices. 1 In the case of OTC hearing aids, this development could potentially be limited by regulations that control how much of the consumer market OTC manufacturers can access. Since the majority of today’s consumers are those with greater degrees of hearing loss, upcoming FDA regulations become important in determining market boundaries. In addition, the OTC may already be obsolete, as the hearing-enhancing capability of consumer electronics exceeds products that have not yet been marketed. Even so, “the effects of new technologies are typically felt over decades, not years, and most potentially disruptive technologies end up coexisting with their established counterparts.” 2

VISION INDUSTRY

While not all situations are equal, the vision industry offers some interesting parallels. Thirty-one percent of the US population requires vision correction due to age-related hyperopia (presbyopia). In 2016, 12.4% of adult consumers in the United States used OTC reading glasses, 3 equivalent to approximately 52 million pairs of OTC readers sold that year 4 generating nearly $900 million in revenue. About 80.2% of OTC reader sales took place in grocery stores, pharmacies, department stores and convenience stores. 5 Growth in reading glasses is expected to increase, fueled by increased public awareness of the importance of healthy vision, a growing geriatric population, and an increase in new product launches designed to accommodate consumer preferences. 6

Sound familiar? Encouragingly, despite the huge OTC market, optometric practices continue to thrive. In 2016, 64.3% of adult consumers in the United States used prescription glasses, seven with 83.5 million pairs sold that year. 8 Experts attribute this success to the differences in prescription and over-the-counter options. OTC reading glasses have the same corrective force and pupillary distance for both eyes, can lead to headaches due to suboptimal fit, and are inferior in durability and scratch resistance. For these reasons, eyeglasses are expected to remain the dominant market segment. 9.10

These limitations do not mean that there is no room for readers. For the right segment of the market, they’re pretty good. More importantly, consumers generally understand that when a “better than good enough” option is needed, they seek out prescription lenses.

CAUTIONARY TALES

There are also lessons to be learned from companies that have failed to respond successfully to change. The best-known cautionary tale is the demise of Blockbuster. Blockbuster endured as the industry moved from VHS to DVD, perhaps creating a false sense of security that they had resistance. Although the product changed, the delivery model was not challenged until Netflix began offering video-on-demand services by mail and Blockbuster stuck to its brick-and-mortar model. of mortar. 11 Lesson? Listen to the customer. What do they say they need and want? If you’re not providing it, it’s time to rethink your business model.

Sony once dominated the consumer electronics space, with industry-leading televisions and portable music devices (e.g., the once-ubiquitous Walkman). Their success led them to focus on several new product lines. But when technological innovations such as digitalization, software and the Internet presented themselves, Sony was fractured internally and refused cross-team collaborations. 12 Instead, they wasted time and energy struggling to differentiate themselves in the many spaces they tried to own and dominate. Lesson? Know your core business and the drivers of your success, focus on what matters most to your brand, and identify ways to collaborate for the greater good.

Kodak has pioneered film photography for years. Largely unmatched in their superb quality and brand recognition, when one of their employees shared his idea for a new technology called “digital photography,” executives demanded the idea be shelved. 13 When digital photography was then introduced by a competitor, it was too late, and now Kodak is a brand for the minority of professional and artistic photographers rather than the masses. Lesson? Don’t miss the next big thing by staying aggressively tied to the past.

Hearing health is undergoing unprecedented change in its history, but it’s not the first industry to experience disruption. Learning from other industries is a valuable way to understand the current state of hearing health, proactively plan for the future, and avoid making the mistakes others are already making as a new era of hearing care hearing health begins.

REFERENCES

1. Christensen CM, Raynor ME, McDonald R 2015 What is disruptive innovation? Harvard Business Review ■ ■ Excerpt from: https://hbr.org/2015/12/what-is-disruptive-innovation

2. Birkinshaw J 2022 How incumbents survive and thrive. Harvard Business Review ■ ■ Excerpt from: https://hbr.org/2022/01/how-incumbents-survive-and-thrive

3. Statista 2017 Share of adult consumers wearing over-the-counter reading glasses in the United States from 2013 to 2016. Retrieved from: https://www.statista.com/statistics/732353/adults-wearing-otc-eyeglasses-us/

4. Statista 2017 Number of over-the-counter (OTC) reading glasses sold in the United States from 2013 to 2016. Retrieved from: https://www.statista.com/statistics/732772/otc-readers-market-us-unit/

5. Statista 2017 Breakdown of over-the-counter reading glasses sales in the United States in 2016 by distribution channel. Extract of : https://www.statista.com/statistics/732868/otc-readers-market-share-channel/

6. Statista 2019 The US Reading Glasses Market size was valued at USD 13,134 Million in 2018 and is projected to reach USD 17,959.2 Million by 2026, growing at a CAGR of 4.0%. Extract of : https://www.fortunebusinessinsights.com/industry-reports/us-reading-glasses-market-100969

7. Statista 2017 Share of adult consumers wearing prescription (Rx) glasses in the United States from 2013 to 2016. Retrieved from: https://www.statista.com/statistics/732295/adults-wearing-prescription-eyeglasses-us/

8. Statista 2017 Number of prescription (Rx) lenses sold in the United States from 2013 to 2016. Taken from: https://www.statista.com/statistics/732496/rx-lens-market-us/

9. Fortune Business Insights 2019 The US Reading Glasses Market size was valued at USD 13,134 Million in 2018 and is projected to reach USD 17,959.2 Million by 2026, growing at a CAGR of 4.0%. Extract of : https://www.fortunebusinessinsights.com/industry-reports/us-reading-glasses-market-100969

10. Yeager S 2019 Let’s take a closer look at a new generation of reading glasses. AARP. Extract of : https://www.aarp.org/health/conditions-treatments/info-2019/buying-best-reading-glasses.html

11. Newman R 2010 10 great companies that lost their edge. US news and world report. Extract of : https://money.usnews.com/money/blogs/flowchart/2010/08/19/10-great-companies-that-lost-their-edge

12. How Sony fell behind at the 2015 Tech Parade The New York Times. Extract of : https://www.nytimes.com/2012/04/15/technology/how-sony-fell-behind-in-the-tech-parade.html

13. Kelly B 2012 Kodak’s cautionary tale. Business Tech. Extract of : https://businesstech.co.za/news/business-opinion/4047/kodaks-cautionary-tale/

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