June 15, 2021
Like many other retailers, Warby Parker had to improvise last year, even as the pandemic forced some new customers to try shopping at their original online website.. Now, as online sales remain elevated, the eyewear brand also is doubling down on its brick-and-mortar strategy, The Wall Street Journal reports.
Indeed, Warby Parker’s sales nosedived in March 2020, with its roughly 135 stores closed and consumers focusing their spending on stocking up only on essentials.
However, since reopening stores last summer, the company has been aggressively expanding its brick-and-mortar footprint and says it is on track to open 35 new stores this year. Co-founders and co-CEOs Neil Blumenthal and Dave Gilboa tell the Journal that their 11-year-old business has faced down its toughest year and increased its sales.
Warby Parker raised $245 million from private investors last fall, snagging a $3 billion valuation—higher than before—and sparking talk of a possible initial public offering. The company has been profitable since 2019, according to a person familiar with the matter, but hasn’t disclosed financial results.
Blumenthal and Gilboa recently spoke with The Wall Street Journal about how Warby Parker adapted during the pandemic, the future of eyewear shopping and their potential IPO plans. Here are edited excerpts:
WSJ: You closed all of your stores in March and kept them closed for months. What impact did the pandemic have?
Gilboa: We saw an immediate, dramatic negative impact as the sales from those stores went away. People weren’t thinking about buying glasses, so even our e-commerce sales dipped. But then, when everyone was kind of starting to quarantine from home, we saw a rapid increase in our e-commerce sales. And we saw those sales then stay elevated, and they have continued to be elevated to this day.
What we’re seeing is that this pandemic will end up pulling forward a lot of trends that already existed. A lot of customers that otherwise wouldn’t have shopped online for glasses did so last year, had a great experience, and will continue to do so in the future.
WSJ: Have you experienced any supply-chain or transportation issues this year as economies reopen?
Gilboa: We haven’t seen the same type of acute issues that are impacting other industries. What we have seen is some delays on inbound shipments from other countries where transportation carriers are completely overwhelmed. Sometimes the process to get products through customs takes significantly longer than it did before.
WSJ: How has the pandemic reshaped how customers shop with you, both online and in-store?
Blumenthal: We did see a big shift online. When we started Warby Parker 11 years ago, less than 1% of glasses were sold online. We like to think that we had a pretty big role in increasing that penetration, and pre-pandemic was probably around 5%. Even now, I think it’s maybe a little over 7%, so still way underpenetrated, relative to other categories like apparel or accessories. We’ve continued to still see high e-commerce growth, even after our stores have ropened.
WSJ: You’ve started opening new retail locations again. How did you decide it was time to start launching new stores?
Blumenthal: We were able to work collaboratively with landlords to create flexibility in our leases. So, for example, we’re often able to negotiate percentage rent, which helped reduce risk if sales were depressed because of closures. We’re on track to open up 35 stores this year.
WSJ: What’s Warby Parker’s current split of in-store sales vs. online sales, and how has that evolved in the past year?
Blumenthal: We’ve seen retail sales, especially in the last two weeks, bounce back faster than we anticipated; and when we speak to other retailers, they’re experiencing the same, which makes us hopeful as more and more people get vaccinated, how we hopefully will be living and shopping pretty similarly to how we did pre-pandemic.
If you were to measure it by where the transaction takes place, they’re pretty evenly split. But, roughly 75% of our customers that transact in stores have shopped with us online.
They’re not just going to our website or our app to look up a store address or hours of operation, they’re actually shopping and choosing which frames they want to look at when they visit the store in person or when they go to the store for an eye exam.
Research contact: @WSJ