Warby Parker’s Eccentric E-Commerce Model Leads to Plans for Flagship Store

Warby Parker, an online eyewear vendor, may point to the direction of e-commerce after Amazon: Amazon has grown by selling everything, and its design has changed little since the site launched in the heady days of Web 1.0. Warby Parker is a design-first company that sells glasses.

Launched in 2010, the company has just introduced its first metal-frame glasses and prescription sunglasses.

The company offers a major price cut by avoiding the long-standing relationships between fashion brands and a few eyewear manufacturers that make most frames. Warby Parker was founded by three Wharton grads who saw that those constrained supply chains led to markups of 10 to 20 times the cost of production on prescription eyewear. Its ability to offer products of comparable quality at a fraction of the cost — $100 with lenses — has driven its growth.

The founders ignored Eric Ries’ “lean startup” advice to launch a minimum viable product and tweak it from there.

“When users saw a really professional website, that gave them confidence. We were offering glasses at a price point that invited skepticism about the quality,” CEO and co-founder Dave Gilboa said at GigaOm’s Roadmap conference today.

After a positive write-up in GQ, the company met its first-year targets within three weeks of launch, Gilboa said.

Warby Parker has also shunned the current trend in the industry to guard against competition by patenting an algorithm or a software novelty.

“We believe that design is defensible, and good taste is as defensible as having propriety technology,” Gilboa said.

Like most e-commerce sites, Warby Parker gets nearly a quarter of its traffic from smartphones. But the company has no mobile app. With a headcount of 100, it’s partly a question of limited capacity, but, Gilboa said, the company didn’t want an app to do what its website already does.

It has looked to reduce the difficulty or ordering glasses online. For instance, a the company needs to know the distance between a customer’s pupils to make their glasses.

“We’re working on a way to use phone’s camera to measure that automatically, to take that friction out of the purchasing process,” Gilboa said.

Like Zappo’s, Warby Parker offers consumers a free home try-on of five frames, including two-way shipping.

That offer is what has eventually led to the company’s decision to open brick-and-mortar locations. Warby Parker operates a portion of its offices as a signless retail store. It will open a flagship store in New York in January. Brick-and-mortar came by accident: Its glasses got so popular so fast after its launch that the try-on waiting list became unmanageable. The founders began allowing would-be customers to come to their offices — at the time, Gilboa’s apartment.

“Only Apple does more sales per square foot than we do out of our little showroom,” Gilboa said.

Still, offline transactions make up just 10 percent of the company’s sales.

Facebook continues to drive the bulk of the company’s new customers, Gilboa said.

“Earlier this year when Pinterest was getting a ton of traffic, we saw a ton of traffic from them and it was converting really well, but that seemed to kind of stagnate while Facebook is still growing,” he said.

Design; social word-of-mouth; free two-way shipping: All of these hint at where e-commerce may be headed. But, then again, it may be that low prices are the most important force behind Warby Parker’s success, just as they have been behind Amazon’s.

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