Is 'Showrooming' the Future of Retailing?

Warby Parker, a super-fashionable online eye glasses retailer, has done an amazing job of selling people a product no one thought was suited to e-commerce. So why has it just opened a fancy bricks-and-mortar flagship store in Mahattan's SoHo shopping district? Maybe it is because "showrooming" is the future of retailing.

The story of how Warby Parker became the "Netflix of Eye Wear" was told to me recently by Neil Blumenthal, a co-founder of the firm. You can watch a clip from my interview with him for Newswire here:

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Less than 1% of eye glasses were sold online when Blumenthal and his co-founders decided to launch Warby Parker, a name derived from two early Jack Kerouac characters to evoke an intelligent, cool brand image. They had figured out a profitable way to make good looking prescription glasses for just $95, maybe 20% or less of what offline retailers charge. The big challenge was that people typically like to try on their new frames first, to see how they look, which is not easily done via a website. Even creating a way for website users to post a photo and try frames on that did not really do the job. The breakthrough was the "home try-on".

Potential customers choose five frames they like, try-on versions of which are sent by express mail to their home or office, where they can put them on, maybe share pictures with their friends to get second opinions, and decide which they would like. Then they return the try-on frames by mail, and their newly made eye wear is delivered soon after.

This has caught on like wildfire. Consulting colleagues at work about which try-on frame to buy has proved an unexpectedly powerful marketing tool, Blumenthal told me. Warby Parker's sales have soared, and Blumenthal anticipates that within a few years, perhaps 15% of eye glasses will be sold online. That would be a remarkable demonstration of the power of the e-commerce retailing model. So why open a traditional store?

Ever since e-commerce took off in the late 1990s, there has been a debate in retailing over "bricks versus clicks." At times, particularly at the height of the dotcom bubble, there were predictions that online stores would make physical shops obsolete, malls would disappear and the high street would just become a long, depressing line of Starbucks outlets. This vision of what the economist Schumpeter called "creative destruction" has been revived recently since price comparison apps on mobile phones have allowed customers to demand online-equivalent prices in physical stores, exposing the higher costs of physical stores to a potentially devastating competitive pressure.

I am now in the camp that thinks we will see a dramatic rise in the next few years in the proportion of retail sales taking place through e-commerce - which is now still less than one fifth, far smaller than all the excitement about cyber-shopping might have led you to think. Yet what Warby Parker's store opening shows is that even the very best e-tailers now believe that a physical showroom can help - even if most of their sales will take place online.

Blumenthal says Warby Parker has never seen itself as an online-only business, and believes there is an opportunity to grow sales offline as well as online. The goal of the flagship store, which follows experiments with temporary "pop-up" outlets inside some big department stores and a few earlier showrooms, seems to be to reinforce the notion that the Warby Parker brand is far more upmarket and sophisticated than its every day low prices might imply. According to the firm's blog, the store is designed to resemble a library, complete with a "selection of books from small presses... available for flipping–through or adding to your personal collection". The goal is to be an enjoyable experience and inherently social, in contrast to e-commerce: "shopping for glasses should be like browsing at a library: quick, easy, and especially fun to do with a friend in tow." Never mind, I'm betting, that most of Warby Parker's customers haven't been to a library in years, let alone with a friend!

Even if traditional stores are rendered uncompetitive by mobile phone price comparisons, there will probably continue to be a role for some physical stores not as primary sales outlets but as showrooms, where customers can get a "richer experience" of their beloved brands than would ever be possible online. Indeed, according to TechCrunch, it may not be long before showroom stores are opened by those internet giants, Amazon and Google - though judging by all the crazy stuff Google has in its innovation pipeline, from self-driving cars and internet connected "glass" eye wear to a space elevator, maybe a theme park would be more appropriate. Welcome to Google World?

Meanwhile, Blumenthal told me on April 16th, there were queues around the block when its new store opened at the weekend. In line for online offline...

What do you think?