Attention Shoppers:Online Eyeglasses Is a Viable Option
By Vanessa L. Facenda
: Contributing Editor
Online-only eyewear retailers want to make one thing absolutely clear—they do not sell cheap eyeglasses. They sell quality eyeglasses at lower prices than their brick-and-mortar counterparts by removing added expenses, executives told Vision Monday.
Levente Laczay, founder and CEO of ZenniOptical, said that brick-and-mortar optical stores have extremely high markups on prescription eyeglasses and frames. “There is no conspiracy, more so, they don’t have a choice.” Factors such as intense competition due to market saturation and sharp overhead costs, “force [brick-and-mortar] opticians and retailers to upsell the consumer in order to make a profit or just break even,” he said. “Online operators do not have those issues.”
Online-eyewear merchants emphasize that they are able to sell fashion-forward and designer-branded frames, as well as high quality prescription lenses as a result of tremendous improvements in technology and because they have lean organizational structures with lower costs as a result of working as online-operators.
Convincing consumers online eyewear is a viable alternative remains challenging. Consumers still feel the most comfortable trying eyeglasses on their faces. And online-only eyewear retailers are not able to provide the personal, face-to-face customer service that brick-and-mortar optical stores can. But, with time and “new technologies, the obstacles will be overcome,” said Roy Hessel, CEO of EyeBuyDirect.com.
Online eyewear sales are a small—but increasing—percentage of online retail sales According to a Vision Council consumer panel report in October 2010, about 7 percent of all retail sales—all consumer products, not just eyewear—are online versus less than 1 percent of eyewear sales online, but online-only eyewear merchants believe the category is well-positioned for strong future growth. The greatest impediment to this growth—lack of awareness.
Online-only eyewear retailers admit that the majority of consumers do not know quality frames and Rx lenses are available online. But promoting that message is difficult as there is no huge player in the online eyewear industry marketing the benefits of buying online, so there is not a lot of education for the consumer. “Current online eyewear players do not have the marketing power to spread that message,” said James Hilford, president of Eyeglasses.com.
Word of mouth marketing, as well as online and social media messaging are helping online eyewear sales. “One year ago, the majority of consumers were researching eyewear online, now they are starting to buy online,” said Roger Hardy, Coastal’s president and CEO. “But it is still a challenge getting consumers to change a buying pattern that they have become accustomed to, even though it will save time and money.”
Eyal Gutentag, CEO of BestBuyEyeglasses, agreed that the growth will continue. “In the years ahead, we are likely to see significant growth in online Rx and non-Rx sales as people become more comfortable embracing the Internet for their optical purchases. He said the Internet offers optical customers “a compelling combination of product selection and convenience and new technologies will only serve to enhance this online purchase experience.”
The 2010 Vision Council Internet Influence Report found that after two straight years of significant increases, there was a slight decline of Internet usage when shopping for eyewear in 2010. The decline was reportedly consistent across all optical products and demographics although strongest among men and Americans between the ages of 18 to 34. However, the report added that the decline in usage for various “window shopping functions” may be a result of changing the fielding date of the survey and the result of changing sample provides from 2009 to 2010; not necessarily the result of changing consumer behavior. Online-only eyewear merchants contacted for this story vehemently disagree with the report’s findings. Those contacted all claimed double-digit increases in website traffic and sales growth in 2010—and are forecasting strong numbers in 2011.
As consumers transition from browsers to buyers, online-only eyewear merchants agree that high service levels are of the utmost importance—they must provide service guarantees and back it up with actual service—strong online customer service, high in-stock levels, quick delivery on orders, and free no-hassle returns.
The following is a sampling of five leading online-only eyewear retailers, who discuss their growth strategies.
With SKUs in excess of 200,000,
BestBuyEyeglasses.com prides itself on its extensive selection of brands and product mix, but maintains its position as optical experts online. BBE offers customer service support by optical experts Monday through Friday. The majority of BBE’s orders are for frames only, but a growing portion of orders include Rx lenses. In late 2010, BBE added binoculars to its assortment.
Eyal Gutentag, CEO, said BBE experienced double-digit percentage growth in 2010 over 2009, but would not disclose any figures (the company currently focuses on the U.S. market only). The growth has come without the aid of a virtual try-on feature. “We’ve toyed with the feature but believe the right technology is not yet in place to deploy it,” said Gutentag. “I’ve never felt any were accurate enough, but have seen advances in tech that are bringing it closer. We don’t want to roll out a sub-optimal feature.” He said that BBE plans to implement a TryOn function in the not-too-distant future.
However, BBE has several new components to help its design-conscious consumers during the buying process. The site offers 360-degree views of hundreds of its most popular frames and has added in-depth product and informational videos for many of its best-selling products. The videos explain features, show models wearing eyeglasses and point out key qualities. Videos concerning prescription lenses are also being added to the site.
BBE’s recently launched sister site, bestbuysunglasses.com, features Lens Wizard, a tool that presents recommendations to customers based on their RX and intended-use information entered. BestBuySunglasses offers a number of other options including a wish list, gift card feature, gift message options and Facebook sharing options. One of its most significant features is the comparison tool that allows consumers to visualize multiple frames simultaneously.
Although much of its growth has come from word of mouth, BBE launched a substantial social media effort in 2010 including teams dedicated to Facebook and Twitter, as well as blogs on BBE and BBS. The company also expanded its marketing efforts to encompass email, display ads and SEM. “We are now reaching out to our customers much more directly,” said Gutentag.
BBE continues to drive business through affiliate networks such as Linked Connector, Commission Junction, among a number of others. BBE is focused on expanding its informational video offerings and the 360-degree product views and is potentially adding contact lenses to its assortment. “There is demand for contact lenses, so we are considering rolling them out this year,” said Gutentag.
Coastal Contacts experienced explosive growth in the last year. The bulk of the company’s business is contact lenses (one out of every three contacts sold in Northern Europe are sold from Coastal as well as one out of every five in other markets, according to the company), but it began selling eyeglasses three years ago, with that business ramping up last year.
For fiscal 2010, Coastal’s sales rose 10 percent to $153 million, up from $140 million in fiscal 2009. Sales for eyeglasses hit $20 million—a 113 percent increase over fiscal 2009 eyeglasses sales. Net income was $3.1 million, up from $2.7 million in the prior year. In January, Coastal Contacts reported eyeglasses orders of more than $1.6 million in a single week (Jan. 18 to 24, 2011). Total units ordered for that period were approximately 23,000 pairs of eyeglasses. Coastal offers 24-hour customer service and 365 per year free shipping.
Coastal launched its Virtual Try-On function in January 2008. It features eyeglasses to scale and consumers can share the photos with friends to have them help select a pair. “We have over 500 different frames in the virtual mirror so that consumers can get an idea of what styles and shapes look best on their face shape before they order,” said Roger Hardy, Coastal’s president and CEO, adding that a component to measure consumers’ PD is scheduled to launch in mid-2011.
Coastal is active in social media, with a staff that includes full-time bloggers and editors. The majority of the company’s growth has come from word of mouth, but Hardy noted that Coastal will do small media campaigns (television, radio, newspaper and online) from time to time, though not in the U.S. For example, Coastal ran 12, 30-second spots during this year’s Super Bowl in Canada.
The company’s newest initiative is its Change the View Project, which launched in February. Coastal will donate one pair of eyeglasses to someone in need (mainly in third world countries) for every pair sold. “There are a half billion people in the world with vision impairment, so this is a priority for us,” Hardy. The company’s goal is to donate more than 2 million eyeglasses by 2020.
EyeBuyDirect (EBD) maintains a price-driven model and proves that brand names and super-sized assortments aren’t always the keys to success. EBD designs and custom-makes its eyewear in-house—nearly all of its 1,000-plus SKUs is private label. EBD’s sales grew by 40 percent over 2009 and the company anticipates a good—possibly even better—2011. The majority of sales come from the U.S., but international operations are growing.
EBD launched its try-on function—EyeTry—in mid-2008. In 2010, new facial recognition technology was added that measures a person’s PD. This system did not give the consumer a sense of the real proportion of a frame to the face. EBD has been developing new technology that also measures the height of the ears in relation to the eyes, and the distance between the two—factors that will affect the look of a frame on a particular face. This function will also enable EBD to recommend eyeglasses to consumers.
Roy Hessel, founder and CEO of EBD, said this frame-fitting tool will significantly reduce one of the barriers to buying glasses online. EBD plans to launch the frame-fitting tool in the next six to nine months.
In February, EBD unveiled the “new and improved” Wall of Frame 3.0 Virtual Dressing Room. The face recognition virtual dressing room allows shoppers to mix and match eyeglasses onto their photos, as well as share feedback with other shoppers across its social community of 20,000 users. Users are able to email the link to their friends, post on Facebook and Twitter, add to the Wall of Frame, engage in real-time conversation and vote on their favorite eyeglasses.
Since going live in early February, the company reported average pages per visit increased 7 percent and the average time shoppers spend browsing on EBD rose 3 percent. EBD is also using the Wall of Frame as a data-mining and analytics tool to gauge what consumers are talking about and their needs. “Direct communication is the best analytics tool—listening to consumers, seeing what they like and don’t like is crucial—we can only be as good as our satisfied customers are,” said Hessel. “We are learning a lot from our Wall of Frame 3.0 [feedback]. This will help us to optimize our services and offerings.”
EBD engages strictly in online advertising and marketing—although the majority of its growth can be attributed to word of mouth. The company is active in social media and launched its new “How to Kiss with Eyeglasses” Video Contest around Valentine’s Day. Online shoppers are encouraged to post original video stories of “kissing with eyeglasses.” The contest runs through March 15—the Grand Prize is a $500 EBD gift voucher. “This contest appeals to a younger crowd. It is a fun, quirky way to get to know our customers and strengthen our bond with them,” said Hessel, noting that the better the connection with consumers, the greater the trust and the conversion rate from browser to buyer grows.
Eyeglasses.com registered another strong year in 2010—experiencing double-digit sales gains—but expects 2011 to be even better. International sales are 6 percent to 8 percent of its business, and are growing. Eyeglasses.com remains committed to offering a value proposition and superior customer service. The company offers overnight shipping, and the typical turnaround time is three business days. The assortment has not changed much since last year—more than 200,000 SKUs including 35,000 frames.
Last year was the first full year
Eyeglasses.com ran on a new platform that launched in late 2009. As a result of the new operating platform, James Hilford, president, Eyeglasses.com, said the virtual try-on function had to be reworked in order to properly mesh with the new system. ETryItOn will be relaunched in mid to late spring. It has a patented technology that matches the scale of the consumer’s head to the eyewear. ETryItOn will also have a side-by-side comparison feature that allows consumers to try-on multiple frames.
In addition to a new platform, Eyeglasses.com made significant updates to its website such as better search functions and a dressing room where consumers can store glasses. The site will be more socially interactive so consumers may give each other feedback on what frames look good and which ones do not.
Aside from social media efforts where Eyeglasses.com is active on Facebook and has its own blog, the company does very little marketing—most of its growth has come from word of mouth, but Hilford admitted that is about to change. “We have a major marketing initiative planned for the third quarter,” he said, but would not disclose the details. The company continues to work with affiliate networks such as Nextjump.com to help drive business.
Eyeglasses.com is planning to add a component that will measure consumers’ PD. “We anticipate adding the PD function in 2012,” said Hilford.
ZenniOptical has no manufacturers, wholesalers or importers—the company is its own manufacturer. Cutting-out the middle-man helps keep costs low and improved technologies allow the company to offer high quality prescriptions for a fraction of the price. Zenni owns lens manufacturing and eyeglasses-assembly factories in China. Zenni built a 227,000 square foot state-of-the-art facility that it recently moved into. “The equipment in the new facility is found in less than 10 percent of U.S. labs,” said Zenni’s founder and CEO, Levente Laczay. With the exception of Transitions photochromic lenses (it also carries its own brand of photochromic lens) Zenni does not offer branded eyeglasses.
Between 2004 and 2009, Zenni grew more than 200 percent year over year. Sales did not double last year, but Laczay said the company grew by nearly 100 percent (the company would not release figures). January 2011 sales exceeded 30 percent, a mark Laczay said the company hits every year. According to Laczay, Zenni sells approximately 4,000 eyeglasses per day. More than 80 percent of Zenni’s sales are U.S., but international business is growing faster.
Laczay expects sales to double in 2011 as a result of improvements and updates to its website. Zenni has made significant investments and improvements to the site including better aesthetics, improved search functions as well as making the site clearer and more user-friendly. Updates also include new capabilities such as analyzing prescriptions and picking up user mistakes.
One of the most substantial improvements to the website, which relaunched in October 2010, was the addition of the virtual try-on function. The pattern recognition technology automatically centers the eye (after user enters his/her PD) so the consumer does not have to rotate, position and size the image. Zenni’s try-on function allows consumers to “try on” four different frames simultaneously.
Though he would not discuss them, Laczay believes new marketing initiatives will also help sales grow significantly this year. Growth to date has primarily come from word of mouth. The company has previously not really done much marketing with the exception of some Google ads. Zenni had not partnered with, nor has any plans to partner with affiliate networks because, “I don’t know how it would enhance our services or help our customers,” said Laczay.
Zenni’s leading initiatives in 2011 include tweaking the website to further improve its userability and expanding its customer service hours. Customer service is currently available Monday through Friday 6 a.m. to 5 p.m. but is changing to 12 a.m. to 5 p.m. weekdays. “We will eventually move to weekends and plan to offer 24-hour customer service by year-end,” said Laczay.
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