The internet has become a tough place to do business. If that sounds against the logic, consider the following factors:
- There are hundreds of businesses competition even in the nichest niche that you can think of.
- It does not take much to set up an e-business. Anyone can set up a pretty impressive e-commerce website for less than $2000.
- Trust factors come for free. Thwate, Google certified, BBB certification, award winning and what not… all of them have these logos and well-designed icons on every page screaming trustworthiness.
- They all look similar – big, full screen, large header, long footer and generally impressive. They are all built for 768*1024 resolution and they all have liquid design. See more on this here and here.
- There are hundreds of websites which are peddling the same stuff with a marginal price difference.
- Given the demand, awards, conferences and certification businesses have cropped up like tadpoles in monsoon. Anyone can buy an award, become an industry authority and well known speaker or buy a pile of certificates. If you don’t believe this, send me a mail and I will tell you what all you can buy at what price.
So, how does one survive, let alone prosper in such a market? Warby Parker did and did it with combination of pricing, branding and service, a solid marketing strategy. For all of you who have just come back from hibernation in North pole, Warby Parker designs, produces vintage-inspired frames with prescription lenses for $95 whereas it would typically cost $500. Now, eye wear is not a novelty business nor is it a newly evolved niche. The competition is intense, stakes high and the players are all established names such as Gucchi… etc.
So, how did the Warby Parker, a shop set up by four Stanford students after a series of discussions in pubs, become such a big name in such a short time? Here are a few factors that resulted in such a stupendous success:
1. Fill in the gaps:
No matter how competitive a business segment is, there are always gaps and opportunities to be exploited. Warby spotted the gap in eye wear industry – pricing. Typically, glasses were priced in the range of $500 per pair. As one of its founders, Blumenthal said, there is no reason why a prescription glass has to cost as much as an iPhone. It’s just plastic, metal and glass.
It was evident that this industry operated as a clique to keep the prices high. Pricing was going to be a huge factor here. Have you spotted the gap in your industry? It may not be as evident as pricing.
In fact, in some industries competition has run prices to the ground, such as aviation. But there is always a gap. For example, when every second airline in America was charging for baggage check ins, Southwest Airlines continued to be the only one that did not. And, among other things, that became a major differentiating factor.
2. Be disruptive:
Don’t be more of the same. Think what differentiates you from the rest. It can be price, it can be packaging and branding, an ingredient, the level of service (or no service, as is the case with self-service hotels or no frill airlines) or anything that makes your offering stand apart. What the heck, being eco-friendly has become a USP now.
Warby Parker chose a combination of methods. First, it offered vintage styled eye glasses at a flat rate of $95 per pair, which was 80% cheaper than the prevailing price. How could they afford it? They remained a true e-business, no physical stores. They sourced their products directly from the manufacturers, cutting out the middlemen. Finally, they kept a profit, but were not too greedy. Warby was going to be a volume player, so the margins were less.
Remember Air Deccan? They took a similarly disruptive route – one based on pricing. But it does not have to be based on pricing alone. I was talking to this small time alcohol brand recently, who didn’t have deep pockets to fight against the biggies. Also, the law restricts any direct advertising, so flashy big budget campaign was out of the picture. They decided to break down the whole marketing plan into 3 parts:
- Surrogate advertising: Launch a product which is directly in sync with the alcohol (not stupid music CDs) and which can be a self-sufficient business unit on its own. For obvious reasons, I can’t go into any specific details.
- In store branding: Given that this is the little advertising space that the industry gets, it is competitive and very important. The company decided to take a cue from superstores and made it more contextual.
- The bottle: The challenge was to make the bottle look more pick-uppable without changing the bottle and thereby the cost. The company decided to do look elsewhere – solution came in the form of a sticker which is inspired more by food beverages industry than its own. Once you put it all together and you will see that the brand is being disruptive across all segments, which is all the more important when you don’t have the marketing muscle.
3. Be ethical
In this day and time, being ethical has become an undeniable business proposition and a great marketing strategy. While most large businesses are involved in scams, forging data and refusing to take responsibility for their own actions, being ethical immediately distinguishes you from the rest. Properly implemented and communicated, this can be the best marketing pitch ever.
Warby Parker donates a pair of eye wear for every pair that they sell. In 2011 alone, they donated 100,000 pairs of glasses. All their donations are handled by VisionSpring, which deserves a case study of its own. Though there is a lot of debate that such social buying can bring about, it is remarkable what Warby is doing.
All the giving helped Warby Parker being recognized as a B Corporation, which is short for the good guys club when it comes to corporates.
B Corps are a new type of corporation which uses the power of business to solve social and environmental problems.
This gave the new company rims of good press. What corporates try to achieve through decades of excellent PR exercises, Warby Parker could it in one swift move. It also made the eye wear market look like the proverbial war between the good and evil. On one side are the big designer houses who have conferred to keep the prices artificially high and deprive the needy, on the other is Warby which almost sounds like a non-profit do gooder.
4. Fulfill a need
With ipods, ipads and kindles selling in record numbers, it has become a little difficult to identify real need. But I am sure eyewear qualifies without a doubt. While innovation based products can be mega successes, they also have very high chances of failing. See here and here
Warby Parker fulfilled the need for eyewear, which is quite indispensable. More importantly, it met the need for quality, stylish and affordable eyewear. It had to do something seriously wrong to fail, it didn’t. No wonder, it sold 20,000 pairs in its very first year.
5. Nothing succeeds like good service
Selling eyewear online is tricky. Customers will like to try on a pair, look in the mirror and get the opinion of their girlfriend/boyfriend. How do you do that online?
Warby Parker has a virtual try on application which does a pretty good job of it. It allows you to upload your photo and match any of the designs. If you insist on touch and feel, the guys will send over 5 pairs of glasses to your home. You can keep them for 5 days and try all you want. If you don’t like them, just send them back. Both ways shipping is pre-paid and there is no obligation to buy. If you have heard of better service, you are not from this planet.
Have you come across any other company that others should know about? Let me know.