Archive for August, 2013

Warby Parker: A Purposeful Vision

August 27, 2013

Warby Parker InterviewMuch like a brand repositioning itself, eyeglasses have a new image—from a functional apparatus that 1980s youth cringed over (à la braces) to a fashionable tool that many are proud to don.

This bodes well for Warby Parker. The burgeoning e-commerce eyewear company takes pride in likewise transforming those of us who vividly remember wandering blindly through school hallways into trendsetters for the “in-crowd” without breaking bank. But Warby Parker offers more than a pretty face. The student-founded start-up acted on a deeper vision and managed to hit its first-year sales goals in just three weeks… on a $120k budget.

For a mere $95 you can purchase “fully loaded,” custom fit glasses with anti-reflective, prescription lenses—which, by the way, are manufactured in the same facility as luxury brands that charge hundreds of dollars for frames alone. But the three-year-old retailer embraces an even greater purpose at its core—donating stylish specs for every pair sold to those who have forgone proper vision because they can’t afford to buy even low-priced eyeglasses.

Similar to what TOMS did for the shoe industry, Warby Parker is shaking up the optics market. Co-founder Neil Blumenthal explains, “[Glasses] stand for something…. So it wasn’t just about getting a bunch of cheap glasses and selling them online.”

When Blumenthal and three of his Wharton classmates heard that one billion people worldwide were without glasses, they risked trips to the Dean’s office to embark on this venture. Blumenthal tells Mike O’Toole, host of PJA Radio’s The Unconventionals, “[We wanted] to build… a business that is scalable, profitable, but does good in the world and doesn’t charge a premium for it…. The problems that we face are more complex and larger than ever before. And volunteering on the weekend is not going to solve it.”

Blumenthal explains that Warby Parker exists in three distinct worlds—fashion, technology and social enterprise. “We spent a lot of time thinking, ‘What are we?’ and ‘What are we not?’ ‘What do we stand for?’”

Warby Parker, the David in a Goliath world, competes with industry brands like Luxottica (Ray Ban, Oakley, Oliver Peoples) and LensCrafters that monopolize the market. But Blumenthal and his cohorts aim to make  their business model an example for small enterprises and Fortune 500 companies alike. “Ultimately businesses can be and should be a catalyst for good,” says Blumenthal.

For many, eyewear is more than utilitarian. It is indeed an extension of the fashion world, a form of personal style and expression. So the founders were challenged with persuading consumers to buy prescription glasses online rather than in-person at a retail establishment where they can immediately try them on.

Warby Parker implemented the “Home Try-On” program. Customers can select up to five different, non-prescriptive frames which are shipped at no cost to their doorsteps. They then have five days to try the frames, solicit feedback from family, friends, and style gurus. After making a selection, customers simply return the frames using a pre-paid shipping label and order their chosen pair through Warby Parker’s website.

Warby Parker Class Trip

The team behind Warby Parker succeeded in building awareness through a well-targeted campaign convincing aspirational media outlets like GQ and Vogue to feature them. After selling out of their top 15 styles in four weeks, Warby Parker accumulated a waitlist of 20,000 people.

Warby Parker has since expanded from operating out of Blumenthal’s apartment to selling frames at their own brick-and-mortar stores. More recently they launched the “Warby Parker Class Trip,” transforming a school bus into a mobile showroom for a cross-country road trip to bring the Warby Parker experience to the masses.

To hear more about how this start-up became one of the most talked about entrepreneurial ventures, listen to Neil Blumenthal’s full interview on PJA’s The Unconventionals.

By ALLIE ABODEELY

Why Big Data Is So Hard for Companies

August 16, 2013

big-data-eyeballs-mediumI landed in Paris just as the NSA story was breaking, and Europeans were waking up to the extent of their American surveillance. Made for a lot of interest in my speech on big data and innovation to CEOs of the travel industry the following day.

If any industry will be shaped dramatically by the revolution in data and business practice, it should be travel. Travel transactions have already shifted almost entirely online, numerous touchpoints and complex customer experiences allow for wide-ranging innovation, and airlines were an early pioneer in applying dynamic pricing algorithms to optimize “yield” from each flight’s allotment of seats.

And yet, over the course of two days of meetings and conference events, I discovered the travel industry is grappling with the same issues as every other industry in trying to make “big data” work to the benefit of their customers, their business models, and their bottom lines.

Five lessons for CEOs, CMOs, and CIOs struggling with big data initiatives:

1. Customer level data is paramount.
Data is no longer about knowing that “69% of customers prefer X.” As data has shifted from the survey paradigm to real-time analysis and unstructured data, the value is in knowing that “customers who buy X, and do Y, are 140% more likely to want Z.”  This value requires linking together different behaviors and data signals at the level of the individual customer, to unlock insight and deliver much more customized value. As of recently, the airline industry has not even retained historical purchase records, literally “throwing out” the unique ID of each customer transaction after the trip, to recycle the record locator number for another customer.

2. Customers need to see value, to allay privacy fears.
With an ever-increasing spotlight on issues of data privacy, from both governments and corporations, gathering and using customer data surreptitiously is no longer an option. And to earn the trust of customers to use their data transparently, companies need to demonstrate the value they are delivering to them. When customers see actual benefits, from personalization, offers, and unique services, they are much more willing to accept the anonymized use of their data by your business.

3. Loyalty programs will be the leading edge of opt-in data.
The most transparent and familiar paradigm for customers to recognize a value exchange around data is loyalty programs. Huge numbers of customers already participate in at least one such program, and understand that they are opting in to allow the company to deliver rewards based on behaviors it is tracking and responding to. For companies with limited customer-level datasets (e.g. those who traditionally sell only through intermediary channels), loyalty programs are the first step down the path of developing their own strategic data asset.

4. Data is political, not just technical. Most conversations about big data take for granted that the biggest hurdles to assembling and linking diverse and enormous sets of unstructured data are technical challenges. But in the real world of businesses, the toughest challenges are political.  Sharing and linking of data, in order to assemble a complete picture of customer behavior, is very frequently obstructed by reluctance to share between divisions of a single company, or between partner companies.  Whosoever “owns” the data wields a great deal of power. The travel industry is struggling to shift to NDC, a new data standard for airline reservations. Why? Because while airlines claim it will allow for much better servicing of customers, online travel agencies (OTAs) fear being cut out of the value chain – disintermediated by their partners.

5. Data “ownership” is the wrong model. As turf wars heat up over customer data, some businesses are trying to lay down rules to establish their “ownership” of their customers’ data, before they share it with any business partners.  But ownership is fundamentally the wrong legal paradigm. While one business may try to set terms of use before sharing data with another, it does not “own” the data of its customers’ public online behavior. (This is equivalent to a radio station claiming ownership of a songwriter’s lyrics once a song is transmitted over its airwaves.) In a post-Snowden world, companies who try to argue too loudly for legal ownership of their customers’ digital footprints, will not be looked on kindly in the eyes of customers or policymakers.

The conference I spoke at was hosted by Amadeus, a leading global technology provider for the travel industry. If you are interested in the state of play of data in the travel industry, Amadeus has sponsored an excellent independent report on the topic. (Disclosure: Amadeus is a client. However, I was not involved in this study.)

BY DAVID ROGERS

This piece was originally posted by David on the DavidRogers.biz blog at: http://www.davidrogers.biz

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