Why ecommerce hotshot Warby Parker needs old school retail stores

By Erin Griffith , written on August 29, 2013

From The News Desk

When Warby Parker got its start three years ago, fashion-forward e-commerce was booming, especially in New York. It was the era of Gilt Groupe, Bonobos and Etsy, each serving opposite ends of the online shopping market.

Certainly no one thought any of these bright shiny Internet companies would find themselves leasing storefronts, hiring interior designers instead of web designers, and ordering inventory instead of drop-shipping it. Lo and behold, Bonobos has opened eight showrooms. Baublebar and Etsy have perennial pop-up shops. And Warby Parker now has 4 stores and 12 "store in stores" around the country which offer on-site eye exams and sell eyewear.

If you read the tech, fashion and social good blogs, Warby Parker is the future of eyewear retailing. And the future of all retailing, if you ask Valley opinionator (and full disclosure, PandoDaily investor) Marc Andreessen, is online. Yes, all of it. (Sarah Lacy actually considered the headline, "Mommy, what's a mall?" for that post.)

So why would all of these scrappy up-and-coming e-commerce companies -- the future of retail -- be so eager turn themselves into to stodgy brick-and-mortar retailers?

At PandoMonthly New York this evening, Neil Blumenthal, co-founder and co-CEO of Warby Parker, made a statement most hardcore e-commerce CEOs (not to mention,  Andreessen) would disagree with. He used a buzzword that even people in the traditional retail industry are sick of. The future of commerce, he said, is "omnichannel."

That cringe-worthy term describes selling things across mobile, Web, and in-person retail. Commerce companies are in the early days of figuring out the best mix of the three, and countless startups have sprung up to help them do it better as they try.

The reason Warby is doing retail, Blumenthal says, is because it makes for better customers. Research shows that customers that purchase across multiple channels have a higher lifetime value. "We're also bringing in new customers, and the majority of new customers coming through retail channel are making their second purchase online," he said. "It's because shopping is about entertainment. It's about discovery and fun and entering this whole different world. As cool as we can make the experience online, in-person it's just different."

Beyond that, some customers are just too risk-averse to buy something without trying it on in person. Those people need a physical presence. Certain ecommerce innovations, like virtual personal shoppers, virtual try-ons, and virtual in-store experiences, just can't be replicated on the Web.

It's not without its challenges. Blumenthal said dealing with "fucking scumbag landlords" was brutal. Beyond that, the bar for a special in-store experience is higher than it is online, he said.

Warby got its start online, and but in order to become a lasting brand, the company has to successfully straddle both the online and offline worlds.