When J.Crew CEO Mickey Drexler met with founders of upstart eyewear maker Warby Parker one-and-a-half years ago, the first thing the retail legend advised them to do was open a store.
Now, after that fateful conversation, Warby Parker has debuted its flagship store in New York City earlier this month.
Founded 3 years ago by 4 friends at The Wharton School in Philadelphia, their strategy is focused on boutique-quality eyewear with all glasses retailing for $95, predominantly through their website.
But the founders knew a digital presence was not enough. Now, Warby Parker joins other e-commerce players that are experimenting with physical stores. Warby Parker is planting its feet across platforms and envisions a retail environment where more consumers want multiple entry points for shopping — websites, smartphones and shops.
“We have a lot of data that indicates that having a physical presence makes sense from a branding perspective and helps drive sales and profits for the company,” David Gilboa, Co-Founder and Co-Chief Executive of Warby Parker, told CNBC.
SoHo Flagship: No Accident
Warby Parker’s new 2,000-square-foot store in the SoHo neighborhood of lower Manhattan is no accident. The area has a history of supporting bohemian art studios and designer fashion boutiques. The unique company name, Warby Parker, is based on 2 characters from author Jack Kerouac’s journals — Zagg Parker and Warby Pepper.
“We’re downtown guys, downtown brand,” co-founder Neil Blumenthal told CNBC. “There’s a good mix of native New Yorkers and tourists, so it checks all the boxes: from a brand perspective, from a sales perspective, from a marketing and raising awareness perspective.”
Unique Shopping Experience
Warby Parker’s retail space isn’t your typical optical store. Glasses are displayed in open, unlocked cases. There’s plenty of room to walk around and try on new pairs. There’s a fun photo booth where you can take a snapshot of yourself in a pair of glasses. You can print out the photo and also get a digital image via e-mail, perfect for sharing.
The co-founders say the store was created to complement the online experience. Through its website, customers can choose 5 pairs and try them on at home for free, or upload their photo for a virtual try-on experience.
In fact, the company realized online shoppers were sharing their try-on pictures via Facebook and other social media platforms to solicit opinions from family and friends.
Warby Parker’s strategy, which includes maximizing technology trends, carries over to the store experience. Once customers enter the store, customers can check out an Apple iPad mini — provided by the retailer — and sign in. That way any website activity can be synced with in-store shopping. The small business also has the ability to track customers via their smartphones.
From Idea to Startup Star
The founders of the startup met at The Wharton School in Philadelphia, where expensive prescription glasses perplexed them, many costing more than $300 a pair.
Warby Parker and Costco are among the few competitors in a sector dominated by Italian giant Luxottica — a dominance that was featured in a “60 Minutes” report.
“The industry is controlled by a few large companies that have kept prices artificially high, reaping huge profits from consumers who have no other options,” according to Warby Parker’s website. Warby Parker’s own vintage-inspired designs — including prescription lenses — start at $95.
As their website gained traction, Warby Parker experimented with ways to interact with customers face-to-face. It created traveling pop-up stores and opened showrooms, tucked inside apparel stores, hotels and an art gallery.
“No doubt a physical retail presence is a strong advantage,” said Sucharita Mulpuru, an analyst at Forrester Research. “All 5 of your senses come alive in the store, while the web only has sight. That is a big difference.”
Warby Parker follows other online retailers that have ventured into physical stores. Piperlime, a unit of the Gap, opened a SoHo store. Etsy, which specializes in handmade goods, and eBay have experimented with pop-up locations.
But analyst Mulpuru doesn’t see a throng of online retailers going brick-and-mortar. She instead forecasts online retailers partnering with established chains — in other words, “Stores in the stores.”
As any startup will tell you, the key obstacle in launching a physical store is the capital investment, which can easily run up to $500,000 for a new store according to Mulpuru.
Lucky for the Warby Parker guys, they got friends in high retail places — with deep pockets.
Drexler, also Gap’s former CEO, and American Express recently joined Warby Parker’s already star-studded list of investors. The group includes General Catalyst Partners, Menlo Ventures, Spark Capital, TigerGlobal Management and Thrive Capital. The last round of investment closed at $41.5 million earlier in the year
Looking ahead, more consumers can expect shopping to combine online and offline elements.
“We feel that the future of our business and all retail is going to have some online component and some offline component,” said Gilboa. “And we think e-commerce is going to continue to take share in all retail categories, but it’s never going to be 100 percent.”