Posts Tagged ‘innovation’

20/20 vision for business

January 23, 2011

The optical industry isn’t in good shape, at least here in Finland. The biggest Finnish business newspaper Kauppalehti reported that half of the optical companies are making losses, not profits (Kauppalehti 20.1.2011).

“The market is saturated, there is more supply than demand” concluded Ilkka Liukkonen the CEO of the Finnish Opticians Union (Suomen Optikkoliikkeiden liitto) on Kauppalehti. Another reason for the downfall of the industry are the expensive rents of the store locations.

When the going gets tough, what do the tough do?

Seek for a blue ocean.

Enter Warby Parker, a New York start-up and a manufacturer of fashionable vintage glasses. Against the conventional wisdom, they sell their glasses on their website only. You try the glasses on virtually (see below), or even order a set of five to try at home for five days, before buying them.

And why wouldn’t you buy them.They’re Brooklyn-fashionista-class fantastic and they only cost $95 a pair — 3 – 5 times less than competitors’ glasses. This is because Warby Parker cut out the middlemen and sell straight to customers, and thus avoided also extra costs of retail markups and brand licensing fees. Another thing they did against the common sense of the industry is that they only do the basic prescriptions, not bifocals for example.

Warby Parker is a brilliant example of a strategic marketing value innovation, where at the same time the costs go down and the customer value goes up. See the results for yourself: their business isn’t going down, but up, up, up — in the first three weeks they had reached their sales goal for the first year.

P.S. My personal fave is of course the monocle, which is, as their website puts it, “the perfect accessory for budding robber barons, post-colonial tyrants and super villains”. Just my style.

(Source: Business facts about Warby Parker from The New York Times.)