Warby Parker: 60% of sales come from physical stores
Your physical store can be a great asset in this ‘Age of Amazon’—just ask Warby Parker.
- Warby Parker has 200 stores in the U.S. and Canada.
- Retailers report that online advertising costs have increased 15%-20% in the last two years, making physical stores more attractive.
- Brands report that in-store shoppers buy more per purchase.
I believe the The Wall Journal should have noted a caveat about using Warby Parker as a poster child for the retail industry. Warby Parker is it in a unique industry: eyeglasses are a mix of retail and medical, as many prescription purchases may be covered by insurance. (In a separate article, I read that 75% of Warby Parker purchases may be prescription purchase.) Warby Parker’s success may be partially due to Obamacare and socialized medicine trends. For example, I’d have liked to know what percent of customers use insurance for their purchases. How do purchases compare between those with and without insurance? Is the company generating more revenue off those with insurance (a perk normal retailers can’t rely on)? The owners of the eyeglass company may wish to thank the expansion of insurance over of the last decade. (The article doesn’t mention insurance’s impact.)
Due to the nuances of insurance and medical needs, I think other digital brands may have been a better choice than Warby Parker to make the point about expanding physical stores. If this is truly a trend, as the headline proclaims, l’d have led with a company that has more in common with other retail brands. Most brands aren’t offering a medically oriented device. Most retail purchases do not involve medical devices, insurance, or government subsidies.
Granted, there is still money it be made regardless of whether Warby Parker sells a medical device or insurance is involved. Oscar, an insurance company started shortly after the passing of Obamacare, has done well due to Obamacare. It, like many companies, are profiting off it and the expansion of Medicare Advantage plans.