Sector Spotlight: Eyewear

The sunglass business is thriving and retailers are trying to woo its trendy shoppers from the Internet.
Posted March 6, 2012

FRED is a high-end French jewelry brand (part of the LVMH Group) making platinum, gem-encrusted sunglasses that can cost upwards of $10,000.

At Morgenthal Frederics, the fashionable New York-based eyeglass retailer, a pair of frames hand-carved from the horns of Asian water buffaloes, with inset mother-of-pearl flourishes, can approach $2000.

Even Sunglass Hut, the eyewear industry’s biggest retail chain, has arranged its merchandise so the first thing shoppers see is an array of $500 Tiffany frames, the store’s highest-priced merchandise.

Sunglasses have always been regarded as one of those fashion accessories that could make the owner feel special for less than $100. But “special” carries a higher price tag these days. Consumers are buying those high-end fashion brands after first checking the fashion magazines and online gossip sites to see what Brad Pitt, Jennifer Lopez and Posh and Becks are wearing. The challenge for retailers, however, is that much of that purchasing is being done online.

“We ship thousand-dollar pairs of glasses all over the world from online orders placed on our web site,” says optometrist and eyewear retailer Dr. Michelle Calder, owner of Urban Optiques, a boutique shop in Northville, Mich.

To get those online consumers into the stores, bricks-and-mortar retailers are being forced to step up their games and use the tools they can control. Eyewear companies like Luxottica Group SpA (Milan) – parent of retailers Sunglass Hut, LensCrafters, Ilori and Optical Store of Aspen – know they still have the in-store advantage of personal service and consultation, and shoppers’ hands-on ability to try glasses on, see how they look and fit and make any necessary adjustments.

“If the Internet were perfect for everybody, no one would shop in stores,” Chris Beer, ceo of Luxottica’s Asia, Pacific, greater China and South Africa division, told The New York Times recently. “The reality is, you need to create a connection, a personal experience.”

Luxottica’s Ilori stores aim right at the want-to-feel-affluent segment with its sophisticated store design and expensive-looking materials. The more middle-market Sunglass Hut appeals to a young target market with a high-tech, interactive experience. An in-store fixture called “Social Sun” has touchscreens that function as both mirrors and camera, allowing customers to take images of themselves in the store with sunglasses on and share those photos with their friends around the Internet. The retailer also displays the photos as part of its in-store graphics package.

For even more impactful experiences, some newer Luxottica locations have wind machines, so runners can test the wind resistance of glasses. There are also children’s areas with soft walls and videos.

“They want an interactive, social environment, where people feel they can try on different personas, take pictures and have fun doing it,” says architect Robin Osler, principal of EOA (New York), which designed Sunglass Hut’s new SoHo flagship store (see page 58).

It seems to be working. In January, Luxottica reported a 12 percent increase in quarterly sales. The Milan-based company’s revenue in the three months ended Dec. 31, 2011, rose to $1.96 billion, exceeding analysts’ estimates. The company says that the outlook for its retail division in 2012 is positive, citing “improved conditions in the U.S. and opportunities in emerging markets for its various retail banners.”

Department stores, too, want in on the booming sunglasses business. Nearly every Macy’s store now houses a Sunglass Hut shop-in-shop, even though there’s often an in-line Sunglass Hut store located in the mall corridor. And Lord & Taylor has been upgrading eyewear departments in some of its stores with illuminated cases that make the glasses glow and highlight the colors and textures. Each fixture has a 12-inch-wide mirror that extends the entire height, replacing those tiny round countertop mirrors nobody really likes. And it’s set up almost as a perimeter fixture, with the collection of brands all facing the shopper.

“In the past, too many eyewear departments were organized along operational needs – available square footage, security concerns, staffing, getting as many SKUs out there as possible – and not with an eye toward the customer experience,” says Mare Weiss, an associate at Boston-based Bergmeyer Associates, which did work for the new Lord & Taylor store at Westchester’s Ridge Hill (Yonkers, N.Y.). “That’s changing. The eyewear shopper is willing to spend but she’s demanding a better experience.”

Many shoppers are finding what they need in small, regional eyewear suppliers. A new national chain called SEE Inc. (stands for Selective Eyewear Elements) has been growing since founder Richard Golden sold his D.O.C. optics chain to Luxottica in 2007 for $120 million. The new, high-end group of boutiques has 25 locations in fashion centers like Newbury Street in Boston, Lincoln Road in Miami Beach, the Beverly Center in Los Angeles, Somerset Collection in Detroit and New York’s SoHo.

The stores are edgy, with retro graphics and lots of personalized attention. Unlike some of the other retailers, though, SEE eschews brand names in favor of its own private-label, European-made frames, which keeps the prices down. However, it goes at the Internet generation in another way – with $200 Groupon offerings that lure shoppers into the store.

“We like to thumb our nose in the face of criminally overpriced eyewear,” Golden says on SEE’s web site. “We’re just saying, ‘accessory snobs, unite!’”

Optometrist Calder is driving in-store business, too, in her boutique on a charming suburban shopping street, using such tried-and-true retail strategies as personal service and good visual merchandising. The front window of the 1300-square-foot store is always merchandised with attractive eyewear and appealing graphics. She also admits to using clever tricks.

“People walk their dogs on our street,” she says, “so I put dog treats out on a vintage ashtray on the sidewalk. Dogs stop, and their owners stop. And once the dogs know the treats are there, they’ll stop repeatedly, every day. It forces people to pause, and then they look in the window” – where thousand-dollar sunglasses are looking back at them.