They started online, selling high-end glasses for a fraction of the cost at a traditional eyeglass store. Buyers could even pick five frames to be shipped – free of charge – to try on and send back. The ones that they didn’t want, they returned. The ones they wanted to buy, they kept. It was a pretty smart idea to fill a gap in the e-commerce market.
For three years, they were an internet sensation. Then in 2013, they opened 8 brick-and-mortar stores. In less than a year, they were posting profits on par with Ralph Lauren and Tiffany. Currently, they own and operate 64 brick-and-mortar stores with plans to make it a hundred by the end of the year.
Warby Parker isn’t the only online retailer moving into physical stores. With so many e-commerce sensations moving to retail locations, they are bridging the gap between online and physical retail – and making the “experience” of shopping part of the equation.
Reverse Branding: from Online to Brick-and-Mortar
Traditional retail uses its physical stores to popularize its brand. An entrepreneur with a good idea seeks funding to open a brick-and-mortar location and hopes good advertising will drive the traffic there. What online retailers or e-tailers like Warby are doing is reversing the traditional paradigm.
Instead, they’ve built a solid brand online with little initial money to start. According to the founders of Warby Parker, they didn’t raise any outside funds for their startup. They were only students who built their business in their apartment.
Starting online allowed them, with very little overhead, to build up the capital needed on their own to get to the point now where they are able to build on their established brand using physical stores. The owners of Warby Parker believe that online stores are the far more cost effective way to attract new customers and the asset itself retains long term value.
Retail is Not Either (Online) Or (Brick-and-Mortar)
So why brick-and-mortar when brick-and-mortar is supposedly dead? Because it’s not an either or choice these e-tailers are finding. Warby Parker with its latest acquisitions is no longer just an online retailer – it is both and both are thriving.
They continue to see growing sales online while three-quarters of the traffic to their physical stores visit their website first. They are getting a bite at both sides of the apple all at once.
Warby Parker is Spurring Innovation in Physical Retail Space
With the success of Warby Parker’s physical stores, many other online retailers are jumping into the foray but they’ll have to keep up. In addition to a growing permanent physical presence, Warby Parker is experimenting with retail innovations like “pop-up stores and rolling stores on wheels.”
Some other big names in online retail that have or are opening physical stores include Untuckit (men’s shirts), Bonobos (guided clothing stylist), Rent the Runway (high-end clothes rentals), and of course, Amazon which is now operating in the grocery space.
Landlords and Building Owners of Mall Spaces See New Opportunities
Online retailers are seeking space in many of the malls and shopping centers going vacant across the country, creating new opportunities for landlords and property owners. To support further innovations, many building owners are offering more flexible leases instead of typical long term contracts in order to attract online retailers that are used to thinking outside of the big box.