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Warby Parker Sees Online Growth Surge. So Why Open 600 More Stores?

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Wise Marketer Staff

Posted on September 20, 2024

The Optics Behind Warby Parker’s Ambitious Expansion Plan

Eyewear brand Warby Parker is pushing ahead with plans to operate nearly 900 stores, even as its online sales gain steam. What does this digital native see in bricks?

The average American is expected to purchase nearly four pieces of eyewear in 2024. To Warby Parker, those frames can build a lot of square footage.

But should they be filling online baskets instead?

In early August, the omnichannel eyewear brand reported its highest quarterly gain in online sales since early fiscal 2021 and a 4.4% increase over the second quarter of 2023. Thanks partly to an infusion of brand-awareness spending, the boost appears to have revived demand for Warby Parker’s online offering of try-at-home eyeglass frames.

Still, the brand remains committed to eventually opening 900 brick-and-mortar stores nationwide, of which it now operates around 256.

Physical stores cost a lot more money and require a higher level of on-the-ground oversight than digital retail, and Warby Parker’s lower-margin online arm can evidently pull its own.

So, what do the company’s visionaries see in bricks?

Industry Reading: How Warby Parker Frames Up

The answer exists in Warby Parker’s role in the broader eyewear industry, which it changed in 2010 when it launched with a unique proposition: We’ll send you up to five sets of eyeglass frames to try out for five days, free, return shipping included.

This “try on at home” convenience alone disrupted the eyewear industry, and Warby Parker’s direct-to-consumer model enabled it to sell fashionable prescription glasses for just $95 at a profit. Within three weeks of launching, Warby Parker reached its full-year sales goal and attracted a waitlist of 20,000 customers, according to CNBC.

The startup kept costs down, in part, because it did not have to allocate any part of its eyewear sales to store overhead. It also saves money by skirting the typical expenses of traditional eyewear making.

  • Warby Parker designs its frames in-house to avoid licensing fees and works directly with suppliers. Read: no middlemen.
  • All in, this saves each of its customers $97 on average, according to a report in Leaders

Fourteen years later, the model is still paying off. Despite investing in physical stores, Warby Parker continues to offer single-lens prescription glasses for as little as $95. It does, however, also sell frames for nearly $200, with add-on features such as anti-fatigue and blue light-filtering lens treatments.

These higher-priced options help “goose up” the average order value. In the second quarter of 2024, Warby Parker’s nearly 2.4 million active shoppers spent an average of $302 each, up 8.8% over the same quarter in 2023.

That’s higher than the national average: U.S. consumers overall are expected to spend $103 on eyewear in 2024, Statista reports.

Why Warby Parker’s Bi-Focal Approach Makes Sense

Yet Warby Parker remains a small fry in the eyewear market; its sales represent 1% of a $66 billion industry led by Luxottica, Vision Source and even Walmart. So, while its attractive, precision-lit optical shops represent a big investment, they might be too essential to ignore for these reasons.

Reason 1: Warby Parker stores just do well.

  • Yes, they have higher overhead, but Warby Parker stores generate revenue and complement the online business. In fiscal 2023, while Warby Parker’s online sales dipped by 3.1%, store revenue rose by 21.7%.
  • This channel difference is reflected industry wide, with physical eyewear sales projected to represent 74% of total industry revenue in 2024, and online sales, 26%, according to Statista. This might be due to consumers getting to try on more than five sets of frames, which can be fun.
  • One watch-out: While online eyewear sales have advanced by just a few percentage points since 2021, Statista projects they’ll gain enough share to represent nearly one-third of the industry by 2027. This indicates more players entering the field, as well as more consumers choosing to spend their eyewear dollars online.

Reason 2: Competition from all directions.

  • Warby Parker’s online platform has launched a fleet of worthy competitors, including Pair Eyewear, Zenni Optical and Amazon. Its branded stores distinguish it from these rivals, and its strategically placed urban shops, in particular, encourage impulse browsing (30% of its stores are street locations vs. shopping centers).
  • But there’s plenty of other brick competition: Warby Parker’s 256 optical shops are among 45,000 in the U.S., the company reports.
  • One watch-out: If Warby Parker stores require an unexpected level of executive attention due to underperformance, theft or other issues, the disruption could force management to take its eye off of key online functions and risk losing customers to copycat competitors.

Reason 3: The eye-to-eye, human exams.

  • Warby Parker provides virtual visual tests online via artificial intelligence, but some customers prefer to see their doctors in real life (85% of prescription glasses are purchased in person, according to Review of Optometric Business). So, the company staffs its stores with opticians who provide vision exams and consultations. These professional services likely lead diagnosed patients to make additional in-store purchases.
  • One watch-out: Doctors earn higher salaries than store employees, so those higher salaries could eat into profit margins as Warby Parker expands its in-store exam services. As the company pointed out in its second-quarter earnings report, while gross margin rose to 56% in 2024 from 54.6% in the second quarter of 2023, “increased doctor salaries” partially offset margin growth.

Reason 4: A line of sight to broader shopper behaviors.

  • By combining its online and in-store shopper activities, Warby Parker gains more nuanced customer insights. For starters, store employees can note customer preferences simply by answering questions. These employees also can access online customer accounts, which include browsing histories, purchases, prescriptions and shipping locations, through Warby Parker’s self-built sales software, Point of Everything. Staff members can even send customers follow-up emails embedded with purchase buttons for the frames they tried on in store, according to the Leaders report.
  • One watch-out: Warby Parker’s attentive service could cross into “creepy” territory if it sends emails too frequently or too soon.

And Let’s Not Overlook What Holds Those Bricks and Bytes Together

Yes, stores demand high overhead costs and liability, but when it comes to selling something as personal as eyeglasses, there is more to bricks than meets the eye. Warby Parker disrupted the eyewear industry with its unprecedented direct-to-consumer model. And in doing so it created excitement.

Warby Parker built a brand image long before building stores. That image remains its most important investment, regardless of whether it’s delivered in bricks or bytes.

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This article originally appeared in Forbes.

Forbes.com retail contributor Jenn McMillen is nationally renowned as the architect of GameStop’s PowerUp Rewards, and is Founder and Chief Accelerant of Incendio, a firm that builds and fixes marketing, consumer engagement, loyalty and CRM programs. Incendio provides a nimble, flexible and technology-agnostic approach without the big-agency cost structure and is a trusted partner of some of the biggest brands in the U.S.