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A little over two years ago, eyewear e-commerce pioneer Warby Parker opened its first retail store in SoHo with fairly low expectations. “Initially, we only had plans to open one, maybe two stores,” co-founder Dave Gilboa told Fashionista over the phone. “We were just blown away by the response that we received from customers.” That store still occasionally has a line out the door on weekends, and Warby Parker now has 12 retail locations across the country, with plans to open seven more before the end of this year. Next up is Kansas City, opening later this summer, followed by Scottsdale and San Diego, Gilboa's hometown, this fall.
So why has the online-native eyewear retailer chosen to open so many stores in such a short period of time? Raising $100 million in venture capital earlier this year certainly has something to do with it. But also, brick-and-mortar stores have proven to be a crucial component to the company’s growth. Almost exactly a year ago, we reported that Warby Parker had sold about 1 million pairs of glasses (a guestimate based on how many pairs it gave away), half of them in the span of a year, which Gilboa largely attributed to the expansion of its store fleet at the time. While the company still does not disclose sales figures, Gilboa says that “even as the company’s gotten bigger, our growth rate on a percentage basis has accelerated,” meaning the company is growing even faster than it was a year ago.
“Every store that we’ve opened has been highly successful any way that you measure it in terms of customer satisfaction, traffic that we’re seeing, sales profitability,” says Gilboa. “The metrics that we’re seeing out of the stores themselves are really on the same level as best-in-class retailers, only rivaled by companies like Tiffany and Apple.” He also said each store opening “dramatically increases” the growth rate in the city in which it’s located.
Rather than take a bite out of e-commerce sales, the physical stores only seem to help them. A very data-driven company, Warby has found that 30-50 percent of those who shop in its stores are people who were unlikely to make a purchase online. However, 90 percent of those who shop in stores have at least been to the website, and many customers who shop in stores will then make a second or third purchase online. In sum, both channels work together to make Warby Parker lots of money, though e-commerce sales still make up the vast majority of its business.
Without ever using the term “omnichannel” (an impressive, and refreshing, feat), Gilboa told us about some of the ways it's harnessing CRM applications and technology to make online and offline shopping more seamless. For example, associates in stores are able to easily pull up any customer's online purchase history and even know what frames he or she has tried on. Customers can also try on a pair of frames and buy it online later, and the company is working on more ways for customers to start the shopping experience online and finish it in a store. Perhaps second to its investment in retail is Warby's investment in technology. As has been reported, it's still working on a way for consumers to get eye exams via their mobile devices. As for when that will be deployed, Gilboa says it's too soon to know, but "as soon as possible."
Warby Parker also looks at online orders, website traffic and demographic data to determine where it will open its next stores. High-potential customers tend to be men and women aged 22 to 35, who are educated, sophisticated and tech-savvy. "They love discovering new brands and styles but they also want to make smart choices and so they’re not looking for flashy luxury purchases," Gilboa said of those customers.
If there’s one thing Warby Parker has done well from the beginning, it’s maintaining tight control of the brand. Much of its appeal lies in its consistently clean, beautifully designed products, stores and signage. And in that sense, Gilboa says, retail expansion has been a challenge. "In a lot of ways, it’s easier when everyone’s in the same location. Now for the first time we have representations of our brand 3,000 miles away from our office." Gilboa and his co-founders have taken to filming videos where they talk about "key aspects of the business" to motivate salespeople and help them to communicate with customers in an informed way.
Still, don't expect this retail expansion to slow down. Gilboa says that given the success of existing stores, he expects to see store openings "accelerate in the coming years."