Is Warby Parker Making a Mistake Building Its Own POS System?
In its short history, the eyeglass brand and retailer Warby Parker has never backed off of a big challenge. After all, it opened its online business against Luxottica, the $8 billion eyewear giant behind Ray-Ban, Oakley, LensCrafters, Pearle Vision, Sears Optical, Target Optical and Sunglass Hut.
Warby Parker’s business model is simple: cut out the middleman and go right to the consumer. A similar philosophy appears to be in play now that the company is opening physical stores, except this time it relates to the company’s POS system. Whereas most merchants select from a host of very fine vendors to fulfill their needs, Warby Parker has decide to build its own POS.
According to an AllThingsD report, Warby Parker management came to the conclusion that the amount of customization it would require to make existing systems work for its needs led to a DIY route.
"Even though we felt like we found the best vendor, we realized it just wasn’t going to be a long-term tech partner for us, and the only way we were going to be able to get what we needed was to build it ourselves," Kyle Ashley, Warby Parker’s director of retail, told AllThingsD.
According to VentureBeat, although Warby Parker may find building its own POS system an expensive proposition, the retailer will benefit from increased utility while while avoiding "expensive licensing fees to multiple vendors over an extended period of time."
Discussion Questions
What do you see as the advantages and disadvantages of Warby Parker developing its own POS system? Do you expect to see other internet-based retailers follow Warby Parker’s lead?
What a waste of bandwidth and funds! The only thing I can figure is that it wanted a single commerce platform across channels—which doesn’t really exist yet. That much is true.
But this is still an unfortunate idea.
By building their own POS, they miss the learnings that POS manufacturers get from working with all their retailers. It’s been proven time and time again that the internal focus that comes from this type of effort means the retailer misses out on the lessons being learned by others.
In a word, customization. Although most software vendors don’t want to have to do it because it eats into profit margins, the reality is that companies like Warby Parker will force their hand. With so many vendors offering a POS system, and none of them meeting WP’s needs? That should be a big wake up call that what was done in the past is just not good enough and will certainly not be good enough moving forward.
Hey, it’s not easy to hear, but in the software business, you are never done. Believe me, I know.
Bringing the system they have down to retail fixed locations will not be difficult or verbose as in lines of code needed to start. Inventory, distribution and payroll will have the the greatest challenges to overcome. Using a payroll service company and distributor only as needed will free capital and buy time for development.
If you are going to spend a lot of money forever, as we do for all Information Technology systems, ownership with a free hand is a good idea. The CEO, CFO, and legal all need to get up to speed on copyright laws in a hurry. This is a huge bear trap in the path to success for all new financial and POS software developers.
I’m not sure what Warby Parker is doing is considered “point of sale” and seems more like workflow optimization integrated with big data.
This is the missing opportunity as most of the canned POS packages have focused on a linear approach to retail transactions in the 21st century.
Warby Parker is basically realizing they are in the 21st century and have to integrate CRM, metadata from big data and workflows into the retailing process for both online and offline sales and deliver omni-channel solutions according to their business need.
I can understand that there might not be a lot of systems out there designed to support specialty eyeglass retailing—with prescriptions and all that jazz. And I can definitely understand that they may want more integration between online and store—maybe even want to leverage more of their online platform in the store. But unless you’re a tech vendor, I think it’s going backwards, not forwards, to build your own.
Five years ago the option of building your own POS would have been a lot tougher. With today’s Cloud based solutions and 3rd party plug-ins, building your own POS is a realistic option.
Upside – Total flexibility, more overall control on new features and functionality and possibly new an unique ways to analyze and market with the data collected through the custom POS solution.
Downside – Initial cost, keeping up with what the market leaders in POS solutions are doing.
In most cases I encourage brands to stay focused on what they do best and outsource the rest. In this case, however, I like the move by Warby Parker and believe they will benefit from building their own. Who knows, it may be good enough to license to others in the market that don’t compete with them directly.
What’s your business; retailing or software development? I’ve been down this road in a prior life, and what a waste of time, energy and focus it was.
It comes down to customization vs depth of experience. And I’m not sure I agree that customization is the side I would bank on.
POS is a vehicle and you know how much we all love to trade for better, fancier, faster vehicles.
I don’t see this move and certainly don’t see other retailers following suit.
The IT Directory or some group within that department is looking for job security.
With the rapid change that continues to take place in the technology world this is going to be one major problem for any individual company to keep up with and as a result, the cost of development and more importantly, the cost of ongoing maintenance is never going to be justified.
POS is normally a one-time specialized application process and it requires special expertise not normally found or needed within the retail store IT world.
Think mobile wallet. THIS is an issue that will drive ALL retail at some point in the future. Warby Parker may not be thinking of this specifically, with its own POS system, but it’s a bit like David throwing his hat in the ring with Goliath. I kinda like gutsy little guys! 😉
Horrible idea. That is their core competency building POS systems?
I expect no one to follow this lead. It is a waste of resources and will divert/delay other strategic key priorities at the company.
Cross channel POS is not a reality yet for most POS off-the-shelf products. In fact, what we are seeing is that most retailers have embarked on a journey of a POS overhaul and it’s not surprising that many have over 60% customization needs. The needs have dynamically changed and the architecture plays a key role on how it could be adapted to future need.
Stuck between building their own POS and adopting a package and completely customizing it, another retailer has taken a middle ground and negotiated with vendor to provide only services (functionality as a service on service based architecture). So they are leveraging these services out of the box and building their functionalities and UI around it , and accelerated the way to development and using already built-in best practices.
Warby Parker could also take this route.
Like many here, my initial reaction was “how foolish, how egotistical.” But on second thought, I’m wondering if isn’t all a part of their brand building strategy, as in “we’re so different we even need a special POS system” (particularly if the seeming novelty generates a lot of publicity). Or maybe it IS just foolish and egotistical. Time will tell.
Like any software you develop for yourself, the advantages are that you can customize the system to exactly what you’ll need it for and nothing else. All ‘off-the-shelf’ IT products are designed to work for a broad base of customers, so there’s always junk in there you don’t need or use. You’d hope that Warby’s new system will be vertical and fully linked with their killer online process, perhaps making them one of the first truly integrated bricks retailers. Sounds like a dream, go Warby!
The downside is that you’ll need an army to maintain the beast you created. Okay, maybe a small army, but nonetheless, along with the army comes bureaucracy, politics, favoritism and of course, a big fat line on the bottom part of the P&L sheet. Good luck with that, Warby!
The reason software is so complex is the developers keep adding features so it can be sold to a wide range of companies. This pushes up the cost and complexity. Most customers don’t even use over half the features in software they purchased.
The advantage for Warby Parker is they can develop their own much faster than installing some of these overly developed systems. The problem for most companies today is they don’t have the knowledge base to create new systems. They have to go out and buy or learn; otherwise they are only repeating old ideas. You don’t see anyone writing their own accounting software.
A better approach is to start with a basic system which has the infrastructure and develop on top the features a company needs. I expect the software companies will develop real systems for online retail, not modify their brick & mortar systems.
The move is a brilliant one. They are working with software makers and other experts along with their own in house tech team to design and build the system—which will be flexible and upgradeable. The financial risk is quite minimal and the efficacy of the system is likely to be amazing both for them and the customer.
POS vendors: a new and very disruptive day is dawning.
I would agree with Ed Dunn’s comment in that Warby Parker is in a unique position here—it’s an established e-tailer optimizing its workflow and transactional data for physical stores. It currently only operates one store to my knowledge. Unlike retail chains with a fleet of stores running countless transactions at a time, Warby Parker already has a system in place (online) and the company wants to tailor a POS and database integration to suit its needs in this, the omnichannel 21st Century. Frankly, it makes a whole lot of sense, as the company proceeds to open additional stores.
So many companies have made the same mistake in the past only to waste time and money and eventually go out and find a professional retail software supplier to do it for them.
I am a huge believer in using the expertise of those who know better and staying focused on the business I am supposed to be doing, not trying to learn another business. This move is the equivalent of going to court accused of murder and deciding to defend yourself to save the lawyers fees.
But this often happens when young and inexperienced CEOs have quick success in a certain area and then they actually start to believe that they are smart. Two to three years from now when the project fails miserably, they will have to finally accept that they are not as smart as they thought. Let’s hope that by then they have not bankrupted the business.