Online retailer Warby Parker is on fire, opening a full store in Philly on Saturday and 24 more nationwide
Warby Parker co-founders Neil Blumenthal and Dave Gilboa made their name selling eyeglasses online. But they now say they have no set limit on how many physical stores they plan to open.
"We're opening 25 stores this year, taking us to nearly 75 by the end of 2017," Blumenthal said. "Beyond that, we're going to figure out how many stores we should have."
The trendy eyewear company is set to open its 47th brick-and-mortar store on Saturday in the city where it all began in 2010 while they were still students at the University of Pennsylvania's Wharton School.
The cofounders, who are also CEOs, say they rely on real-time data from both online sales and a national tour they took two years ago on a retrofitted school bus stocked with glasses to test what cities Warby would perform well in.
Their moves, they say, are dictated by one mission: Making the shopping experience as easy as possible for the customer.
Blumenthal said that Warby developed its first app last year and that it was named one of the Top 10 by Apple. Warby was also one of the first to have a "buy" button on Twitter and among the first to offer shopping on Instagram.
"We love building new mediums for our customers to interact with us," he said.
Blumenthal said store employees sometimes use iPad-mini's to take photos of customers wearing different glasses and sends the photos via email so they see what they look best in before making a purchase.
As department stores like Macy's and Sears continue to close locations, Warby is flourishing, growing its online following as well as brick and mortar sales. The company declined to provide sales information, citing its status as a privately held company.
"Too many [retail] stores ignored online," Gilboa said. "And they're paying the price for it. Part of our philosophy is to operate in an agile manner where we maintain flexibility and can react to what we're seeing from our customers."
Blumenthal and Gilboa were in town this week to make last minute tweaks at their new 2,360-square foot store at 1523 Walnut St. The store is a big upgrade from the tiny, four-shelf "showroom" in Old City on North Third Street.
The Walnut Street store has 18 full size bays with eyeglasses lined up. It is brightly lit. The ceiling measures 40-feet high at the entrance and drops down to 22 feet inside the store. There will be a full-time optometrist on site for exams and fittings, and the store will be open seven days a week.
Blumenthal said they were looking for the best location in Center City and 1523 Walnut had many ideal attributes: a trendy area, lots of people, and a spot that was the former home of Le Bec-Fin restaurant "where people went to celebrate precious moments in their life," Blumenthal said. "We wanted this spot and we waited a long time for it."
They are making a similar investment with new stores coming to Charlotte, N.C., and Boston's Prudential Building early this year, taking them to almost 50 stores and over 1,000 employees in seven years.
Warby's recent swerve upscale is relatively new. "When Warby was establishing its brand, it took spots in more cutting-edge neighborhoods which matched its ethos," said Steven H. Gartner, managing director for retail services at CBRE Inc., which brokered the deal to land Warby at 1523 Walnut Street. "As it became much better known, it took space in more established premium neighborhoods and streets. In Center City, both fun and funky and well-known brands gravitate to Walnut Street."
Their colleagues and professors at Wharton say their rise comes as no surprise.
"They have been a huge success and really have defined a new category known as retail disrupters," said Barbara E. Kahn, a professor of marketing at Wharton and director of the Jay H. Baker Retailing Center. "They had the foresight to understand that consumers would be willing to buy a high quality eyewear product at a reasonable price online.
"And they understood the power of building a strong brand that resonated with the customer and had a social mission as well," she said. "Their model has served as a prototype for many other online start-ups."
Clare Leinweber, managing director of the Penn Wharton Entrepreneurship at Wharton, noted that the founders, while in school, won the Venture Award, giving summer funding for student founders, and were members of the Venture Initiation Program, which incubated student start-ups. "They were dedicated to this venture idea early on and worked hard to demonstrate they could deliver a quality product, keep a social impact mission as part of the business model, and even disrupt an entire industry," she said.
"Wharton has an outstanding track record with student-founded companies," she added. "Warby Parker is one of the standouts but there are many."
Looking back, "We thought we had a really powerful idea, and we thought we could create a special brand," Gilboa said. "We also recognized brands take a long time to build, and we've always focused on the very long term – creating something that creates real value to the world 100 years from now."
Charles O'Shea, lead retail analyst at Moody's, said no question that companies like Warby Parker were setting a new standard.
"Online retailers, especially in fashion-oriented segments, need brick-and-mortar at least as much as brick-and-mortar needs online," O'Shea said. "With brick-and-mortar vs. online sales mix for retail at roughly 90 percent brick-and-mortar/10 percent online at this point, being pure-play online is almost ignoring a huge buying population."
Saturday's store opening in Center City is a homecoming of sorts: Warby began as a conversation among classmates inside a Wharton lab. It evolved into a 40-page business model proposal for an entrepreneurial class in spring 2009.
That year the cofounders – including Jeffrey Raider and Andrew Hunt — launched the company's online home try-on program, where customers selected five frames, Warby shipped them free of cost, and they had the frames for five days at home.
Warby's signature eyewear is the $95 prescription, polycarbonate, lightweight, impact-resistant, anti-reflective lenses.
Glowing profiles in Vogue and GQ generated buzz.
Demand for their glasses was so great that they ran out of inventory within a month of their launch, Blumenthal said. So he took it a step further by laying out eyewear on the dining table of his apartment at 23rd and Walnut Streets in 2010 for people to come and try on.
"We joke that was our very first store," he said.
It was actually in New York City's Union Square, where Blumenthal said they learned that customers preferred full-length mirrors over vanity ones, and the importance of lighting.
With the brand on fire, its co-founders are busy opening new stores nationally.
Blumenthal and Gilboa, both now 36, said the company so far has distributed over two million pairs of glasses to people in need through Warby's Buy A Pair/Give a Pair program – well ahead of projections.
"We pinch ourselves," he said, turning to Gilboa with a huge grin.