Woman and child shopping for new glasses
Photo: Canva

Warby Parker is pushing full steam ahead on store openings, with 13 new locations added in Q2 2023, putting the retailer on track to open 40 new stores by the end of the year. Warby Parker, which ended the quarter with 217 stores, is aiming to eventually reach 900 total shops, even as other digitally native retailers reduce their own brick-and-mortar expansions.

The eyeglass company reemphasized that its “customer journey is integrated across the two channels so these digital tools can be used by customers who ultimately check out either online or in our stores,” according to Co-Founder and Co-CEO Dave Gilboa during a call with investors. A study by Emarsys found that 54% of consumers prefer to shop in-store than through other channels, making the omnichannel approach attractive in a post-COVID environment.

Warby Parker stores are more than just stores. The company is expanding the number of locations that offer comprehensive video-assisted eye exams using doctors who engage remotely with shoppers in one of Warby Parker’s exam suites. Gilboa noted that this lets the retailer expand its exam capacity in an efficient manner. Shoppers looking to renew a prescription can also choose to take a 10-minute virtual vision test at home.

Additionally, Warby Parker has taken a measured approach to growing its brick-and-mortar footprint. The brand started opening stores three years after it launched as a digital pure play specifically because it learned that customers with more complex prescriptions and those looking for a wider selection of frames preferred in-store shopping, according to Harvard Business Review.

The brand’s continued expansion keeps customer demands in mind. Gilboa noted that new stores are targeted in areas where the cost of opening will be paid back within 20 months and where the shops can generate adjusted EBITA margins of 35%. They also provide a way to onboard new customers — a survey by BHDP found that 68% of respondents shopped online after purchasing from a brand’s retail store.

However, store growth leading to traffic growth isn’t a given. Warby Parker only recorded a 1.2% increase in active customers for the quarter despite continuing to open new locations. This tepid growth could be partially attributed to reduced marketing spend, and Warby Parker expects customer acquisition to speed up in the second half of the fiscal year, but it appears that foot traffic alone is not enough to fuel truly outstanding growth.

A fellow digitally native retailer currently shying away from store expansions is Allbirds, which opened three U.S. locations in Q2 2023 but has no further openings planned, CEO Joe Zwillinger said on a call with investors. The company will pursue revenue growth through the selective expansion of wholesale operations, according to an earnings release.

Allbirds isn’t turning its back on stores altogether — Zwillinger noted that the retailer is planning to develop new visual messaging and targeted merchandising strategies that will “bring greater excitement and energy to our floor sets” — but the larger pursuit of profitability seems focused on other channels. Digital natives have been embracing omnichannel for years at this point, but the perfect approach has yet to be discovered.

BrainTrust

“While stock performance has been sluggish, I believe this is a case where WP is planting all the right seeds and it is just a matter of time before they fully bloom.”

Lucille DeHart

Principal, MKT Marketing Services/Columbus Consulting


“Overall, Warby’s DTC program has rightfully garnered significant brand equity and consumer support, and they’ve successfully extended this into physical locations.”

David Spear

VP, Professional Services, Retail, NCR


“Growth in sales is still dependent on capturing customers where they are…offline or online. For Warby Parker omnichannel has to be the way. “

Joan Treistman

President, The Treistman Group LLC

Discussion Questions

DISCUSSION QUESTIONS: Why have store openings been particularly successful for Warby Parker compared to some other digitally native brands? Do you expect initially DTC retailers to continue embracing omnichannel, or will they put an emphasis on alternative channels like third-party wholesale?

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Do you shop at Warby Parker in-person or online?

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11 responses to “What Advantages Will a Bigger Physical Footprint Offer Warby Parker?”

  1. Neil Saunders Avatar
    Neil Saunders

    Over the past year, Warby Parker added 35 new stores: an uplift of 21.9%. Over the same period, active customer numbers have risen by just 1.2%. Some of this depressed growth results from a reduction in online customers. But even so, stores should act as a recruiting sergeant and help generate a higher increase. That they’re not may be down to the economic environment where consumers are less inclined to buy Warby Parker spectacles. However, as things pick up, stores should start pulling their weight. 

    One thing new stores have helped support is increasing average spend per customer, which is up by 9.2%. All new shops offer eye exams, so almost 80% of Warby Parker’s stores now have this service. This creates a new revenue stream from eye exam fees, drives sales of more expensive eyewear lenses, and contact lens subscriptions. This is critical for rounding out the proposition and bolstering revenue.

  2. Gene Detroyer Avatar
    Gene Detroyer

    It doesn’t sound like Warby Parker’s expansion has been particularly successful. “Warby Parker only recorded a 1.2% increase in active customers for the quarter despite continuing to open new locations.” That is against a 5% increase in new stores for the same period.

    I believe the successful play they are experiencing is noted in the fact that “They also provide a way to onboard new customers — a survey by BHDP found that 68% of respondents shopped online after purchasing from a brand’s retail store.” That alone may be the look at the future of brick & mortar retailing. Once you find the size and style, what is the need to return to the store?

  3. Bob Amster Avatar
    Bob Amster

    Warby Parker’s expansion into brick-and-mortar retail is successful because it is a fun-to-shop store environment, in addition to which a significant number of its customers needs one of Warby Parker’s products (especially prescription glasses). I would think that those are more intended purchases than the result of ‘window shopping.’

  4. Lucille DeHart Avatar
    Lucille DeHart

    Full disclosure, I am a huge Warby fan. The accessible selection, staff personality, price of frame/services and brand experience bring an otherwise bland commodity to fun, fashion accessory. While stock performance has been sluggish (yes, I own some), I believe this is a case where WP is planting all the right seeds and it is just a matter of time before they fully bloom.

    1. Richard Hernandez Avatar
      Richard Hernandez

      Hello Lucille, I agree 100% !!!! I have been a fan since their inception. I love some of their brick and mortar locations- they had one that was actually in a school bus. My suggestion to them is to overbuild- I like them because they were unique and you had to travel to get to their assortment and exceptional customer service.

  5. Peter Charness Avatar
    Peter Charness

    Part of the storey (sic) is that these Retailers are not anywhere near “overstored” and are opening their best locations only. If you asked any retailer if they would be financially happier getting out of their least productive 15% of locations, they would be delighted.

  6. David Spear Avatar
    David Spear

    I’ve purchased Warby Parker frames online and thought the experience was excellent. Their 5-day free try-on program is a winner, and their selection is outstanding. Overall, Warby’s DTC program has rightfully garnered significant brand equity and consumer support, and they’ve successfully extended this into physical locations. That said, I’d be concerned about the 1.2% stat. Retail is about traffic counts and if Warby’s can’t drive consumers to their locations, then they have a bigger problem.

  7. Joan Treistman Avatar
    Joan Treistman

    I recall when Warby Parker began and its approach was considered unique. I was surprised when they started to open stores, but realized they were responding to customer preferences. Warby Parker had 3 years (according to this article) to pay attention to what influenced sales. Receiving glasses in the mail to try on and return, if needed, placed them at the apex of innovative marketing and merchandising. It appears that they kept an eye on competition as well as customers. Hence, their continued success. But growth in sales is still dependent on capturing customers where they are…offline or online. For Warby Parker omnichannel has to be the way.  And then there’s pricing and the product to consider. They’ve offered a wide selection of frames and bona fide eye exams. At the same time, I’m aware that I just purchased two pairs of glasses at Costco for much less than I usually pay for one pair. I think there’s another competitive perspective to consider.

  8. BenedictEnterprisesLLC Avatar
    BenedictEnterprisesLLC

    The very nature of their products begs for the opportunity to “try it before buying”, and provides them with a lower-cost customer acquisition model than that of an online-only DTC house.

    As for the broader DTC topic, this is not a “one size fits all” story and DTCers need to experiment and learn from a number of paths to market and invest in what works best for them individually.

  9. Mohamed Amer, PhD Avatar
    Mohamed Amer, PhD

    The purchase journey for eyeglasses differs significantly from shoes (in the case of Allbirds), so lumping all DTC players as a homogeneous bunch sheds little light on the challenges and opportunities. Warby Parker’s new active customer counts may not match investments in store expansion. Still, the foundational premise is that well-designed and executed physical and online experiences will capture a greater share of customer wallets.

  10. Rachelle King Avatar
    Rachelle King

    The thing about retail stores, no matter how fancy, is they need foot traffic to survive. While Warby Parker is doing all the right things with bringing their digitally native roots into retail stores and establishing success metrics for store openings, they should not ignore the softness in store traffic. This, is a key indicator of success and it does not appear to be moving quite as fast as they are.

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Neil Saunders
Neil Saunders
Noble Member
1 month ago

Over the past year, Warby Parker added 35 new stores: an uplift of 21.9%. Over the same period, active customer numbers have risen by just 1.2%. Some of this depressed growth results from a reduction in online customers. But even so, stores should act as a recruiting sergeant and help generate a higher increase. That they’re not may be down to the economic environment where consumers are less inclined to buy Warby Parker spectacles. However, as things pick up, stores should start pulling their weight. 

One thing new stores have helped support is increasing average spend per customer, which is up by 9.2%. All new shops offer eye exams, so almost 80% of Warby Parker’s stores now have this service. This creates a new revenue stream from eye exam fees, drives sales of more expensive eyewear lenses, and contact lens subscriptions. This is critical for rounding out the proposition and bolstering revenue.

0
Gene Detroyer
Gene Detroyer
Trusted Member
1 month ago

It doesn’t sound like Warby Parker’s expansion has been particularly successful. “Warby Parker only recorded a 1.2% increase in active customers for the quarter despite continuing to open new locations.” That is against a 5% increase in new stores for the same period.

I believe the successful play they are experiencing is noted in the fact that “They also provide a way to onboard new customers — a survey by BHDP found that 68% of respondents shopped online after purchasing from a brand’s retail store.” That alone may be the look at the future of brick & mortar retailing. Once you find the size and style, what is the need to return to the store?

0
Bob Amster
Bob Amster
Active Member
1 month ago

Warby Parker’s expansion into brick-and-mortar retail is successful because it is a fun-to-shop store environment, in addition to which a significant number of its customers needs one of Warby Parker’s products (especially prescription glasses). I would think that those are more intended purchases than the result of ‘window shopping.’

0
Lucille DeHart
Lucille DeHart
Active Member
1 month ago

Full disclosure, I am a huge Warby fan. The accessible selection, staff personality, price of frame/services and brand experience bring an otherwise bland commodity to fun, fashion accessory. While stock performance has been sluggish (yes, I own some), I believe this is a case where WP is planting all the right seeds and it is just a matter of time before they fully bloom.

1
Richard Hernandez
Richard Hernandez
Member
Reply to  Lucille DeHart
1 month ago

Hello Lucille, I agree 100% !!!! I have been a fan since their inception. I love some of their brick and mortar locations- they had one that was actually in a school bus. My suggestion to them is to overbuild- I like them because they were unique and you had to travel to get to their assortment and exceptional customer service.

0
Peter Charness
Peter Charness
Active Member
1 month ago

Part of the storey (sic) is that these Retailers are not anywhere near “overstored” and are opening their best locations only. If you asked any retailer if they would be financially happier getting out of their least productive 15% of locations, they would be delighted.

0
David Spear
David Spear
Member
1 month ago

I’ve purchased Warby Parker frames online and thought the experience was excellent. Their 5-day free try-on program is a winner, and their selection is outstanding. Overall, Warby’s DTC program has rightfully garnered significant brand equity and consumer support, and they’ve successfully extended this into physical locations. That said, I’d be concerned about the 1.2% stat. Retail is about traffic counts and if Warby’s can’t drive consumers to their locations, then they have a bigger problem.

1
Joan Treistman
Joan Treistman
Member
1 month ago

I recall when Warby Parker began and its approach was considered unique. I was surprised when they started to open stores, but realized they were responding to customer preferences. Warby Parker had 3 years (according to this article) to pay attention to what influenced sales. Receiving glasses in the mail to try on and return, if needed, placed them at the apex of innovative marketing and merchandising. It appears that they kept an eye on competition as well as customers. Hence, their continued success. But growth in sales is still dependent on capturing customers where they are…offline or online. For Warby Parker omnichannel has to be the way.  And then there’s pricing and the product to consider. They’ve offered a wide selection of frames and bona fide eye exams. At the same time, I’m aware that I just purchased two pairs of glasses at Costco for much less than I usually pay for one pair. I think there’s another competitive perspective to consider.

0
BenedictEnterprisesLLC
BenedictEnterprisesLLC
Member
1 month ago

The very nature of their products begs for the opportunity to “try it before buying”, and provides them with a lower-cost customer acquisition model than that of an online-only DTC house.

As for the broader DTC topic, this is not a “one size fits all” story and DTCers need to experiment and learn from a number of paths to market and invest in what works best for them individually.

0
Mohamed Amer, PhD
Mohamed Amer, PhD
Member
1 month ago

The purchase journey for eyeglasses differs significantly from shoes (in the case of Allbirds), so lumping all DTC players as a homogeneous bunch sheds little light on the challenges and opportunities. Warby Parker’s new active customer counts may not match investments in store expansion. Still, the foundational premise is that well-designed and executed physical and online experiences will capture a greater share of customer wallets.

0
Rachelle King
Rachelle King
Member
1 month ago

The thing about retail stores, no matter how fancy, is they need foot traffic to survive. While Warby Parker is doing all the right things with bringing their digitally native roots into retail stores and establishing success metrics for store openings, they should not ignore the softness in store traffic. This, is a key indicator of success and it does not appear to be moving quite as fast as they are.

0