Even as I get tired of all the hype about Black Friday, I wonder why the hearing aid industry is conspicuous by its absence on the biggest shopping day of the year in the U.S. Today is the big day, the day after the Thanksgiving holiday when shoppers flock to the malls as retailers cut their prices and offer the best price-cutting and one-day sales events of the year.
But while my email inbox is full of offers from every retailer and manufacturer I’ve had contact with in 2011, I haven’t heard a peep from the many hearing aid manufacturers and resellers that send me sales pitches on other days of the year.
But on reflection I realize it should be no surprise. Why? Because manufacturers only reduce prices and put their products on sale when demand is weak and there’s enough competition in their market to make them worry. A little price incentive, especially in the holiday selling season, can be a great way to win a point or two of market share in a hotly contested market.
But the hearing aid industry is more like an oligopoly. Each of the five or six major manufacturers has a comfortable market share, and price comparison shopping is a rarity. Instead, sales channels are limited mainly to audiologists and hearing-aid dispensers, each of whom often only carries one manufacturer’s product line. People shopping for hearing aids usually get a referral to a good audiologist, and if they engage and start the process of buying a hearing aid, they often simply stop shopping around.
Lack of price competition or active consumer product comparisons means the price reduction curve that we see in other industries, especially during slow economic times, is a lot less pronounced in the hearing aid business. Customers who can afford to buy hearing aids still pay many thousands of dollars, while those who can’t afford them spend what money they have looking for Black Friday deals on other less expensive goods.
I’m wondering if Black Friday in 2012 will be any different for the hearing aid industry. In 2011 we’ve seen a number of “over the counter” hearing aid manufacturers enter the market, including UnitedHealth Group insurance company’s hi HealthInnovations subsidiary. These vendors are bypassing the traditional audiology sales channel and selling direct to consumers over the internet. They are trying to reach the tens of millions of Americans with mild hearing loss that can be treated with open-fit hearing aids providing a modest degree of amplification. The new products are less expensive and easy to purchase.
Hearing aid industry groups and professional audiology groups are up in arms about the new competitors, saying that without a full hearing exam and professional fitting, hearing aids can often do more harm than good. But U.S. regulators, who several years ago gave a green light on the internet sale of Personal Sound Amplification Products (PSAPs) directly to consumers, may not be inclined to intervene.
So, don’t be surprised if on Black Friday 2012, your email inbox is full of offers not only from your favorite department stores, but also with offers from some new competitors in the staid old hearing aid industry.
Donna says
Black friday sale–seriously? Like I want to work on Black Friday ! As a private practice audiologist, I almost never get a weekday off! But really, for me its also about not wanting to promote hearing aids as a retail commodity. They’re a class I medical device! I never do price advertising, and don’t play retail gamesmanship. But I do pass on manufacturer’s price breaks to my patients. Those tend to happen only when a new product comes out–usually April and October, not during the holidays when everyone is too distracted shopping for others to worry about their own hearing needs. Hearing aid sales often are slow during the holidays. Most of the dispensers in my town cut back their advertising because the ads just don’t work.
Audicus says
Hi David,
It’s great to see you writing again and keeping your excellent blog up!
Along the lines of your post, we actually are running a promotion on our Audicus 200 hearing aids… so you are spot on (http://wp.me/p1McPm-9L)! =)
Best regards and happy holidays!
Audicus