To boost growth, recently, public Warby Parker plans to launch hundreds of stores where customers can examine their eyes and test frames.
If Warby Parker first began offering glasses online around 11 years ago, it provided an innovative way to get around the significant, predictable issue of purchasing items sight-unseen. They would let customers choose a few glasses on its website, get them delivered to their doorsteps so that they could test them at home, and then offer no-cost returns on models they didn’t like.
The pitch was a huge success. With more than $400 million annual revenue, the chain was valued at $6 billion following the company’s direct listing on Wednesday. This makes it one of the biggest direct-to-consumer market beneficiaries, despite one constant and persistent issue it’s still trying to solve, that is the eye exam.
Before they even consider buying lenses or frames at Warby Parker, customers have to check their eyes in person and get an appointment. People who live close to the Warby Parker store can do this at their local store. For all others, this means a meeting with the eye doctor or an alternative retailer that offers eye examinations, such as LensCrafters, Vision Source, or Walmart, and discover a variety of eyeglasses for them to test. There’s probably an advertisement, too.
That’s a big challenge for the recently public business, as the majority of people prefer convenience: 66% of all purchases of glasses, as well as 71% of contact purchases, are made in the same store where customers receive their eye exams, as per Warby Parker’s regulatory filings. To overcome the hurdle, Warby Parker has relied on a marketing strategy that has more to do with its low price and its stylish selections and charitable donation program — but less to do with its ease.
The result is a company with 2 million customers active and revenue of $394 million in the last fiscal year, an increase of 6percent from the previous year. However, it’s left with only 1percent in the prescription market. To achieve the kind of growth investors will be looking for, the company plans to make significant investments to eliminate the obstacle.
“One of the biggest friction points we hear from customers is around getting new prescriptions,” co-founder as well as co-CEO Neil Blumenthal in an interview on Wednesday. “We’re very excited to continue to invest in our eye exam and telehealth offerings for customers.”
It’s also planning an extensive expansion of its brick-and-mortar stores. Warby Parker plans to open hundreds of stores that will serve as a one-stop shop where customers can check their eyes and try on frames before purchasing. “We’re hiring lots of doctors,” Blumenthal says. The company currently has 145 locations, which means it’s trying to catch up with more than 1,000 locations. The company is also expecting stores to be an effective marketing tool to assist in growing its brand’s recognition, which currently is at 13 percent.
Warby Parker will also continue to work on innovative technology. In 2019, the company began giving customers the chance to test out glasses on the app by sending photos of themselves. Starting this year, users can renew their current glasses prescription at home in around 10 minutes using their phone and their current set of spectacles.
“We think we’re in the top of the first inning in terms of the telemedicine opportunity,” said co-founder as well as co-CEO Dave Gilboa.
Then, eventually, it will provide virtual eye exams to new prescriptions. Other companies are also trying. In 2019, 1-800-Contacts acquired an enterprise called 6over6, which created technology to conduct online eye exams at home. 6over6 have been conducting clinical trials and have secured approval from the FDA for the U.S.
In the meantime, folks must go to an eye doctor for an examination. This is a grueling costly reality for a digital whiz like Warby Parker, who’s realizing that their future is right in the physical world.