Groupon says its focus is on the bottom line, rather than top-line growth.
CoastalContacts’ try-before-you-buy approach is helping it market a product that can be a difficult sell for online retailers—prescription eyeglasses. More than 50% of shoppers who order one of its Trial Packs purchase frames, the retailer says.
When web-only CoastalContacts.com decided to move beyond lenses and start selling prescription eyewear, president and CEO Roger Hardy knew how he wanted to do it. “We wanted to be the Zappos of eyeglasses,” Hardy says. That is, he wanted to offer free shipping and free returns with no obligation to purchase. “People want to try frames on before they purchase them,” he says. Hardy and his team came up with the Trial Pack, a package of up to four pairs of free eyeglasses customers can try on at home.
The CoastalContacts.com model is different from Zappos.com Inc. in that with Zappos, a customer must enter his or her payment information before shipment but has the option to return the items for a credit with no initial or return shipping charges. CoastalContacts.com doesn’t require payment information before shipping a trial pack, Hardy says.
CoastalContacts’ approach to selling eyeglasses seems to be working. More than 50% of those who order the company’s Trial Pack buy at least one pair, Hardy says.
CoastalContacts ships the customer-selected pack of frames for free, complete with a return label. Potential customers try out the frames and send the frames along with their prescription back to CoastalContacts, specifying which pair they want to purchase. If unsure of their prescription, they can ship CoastalContacts a current pair of eyeglasses instead. Or, they can opt not to buy any frames at all. Customers are asked to return the frames after a week. If the frames are not shipped back after 15 days, CoastalContacts sends a reminder e-mail. Customers who fail to return the pack are invoiced $600. A spokesperson for CoastalContacts says an in-house collection and risk management team carefully tracks every pack that is sent.
During a two-month pilot program in December and January, CoastalContacts sold 1,000 pairs of glasses. CoastalContacts officially began selling eyeglasses February 1. Hardy won’t reveal how many pairs the company has sold since, but says the vast majority of the retailer’s business is still in contact lenses.
The company also has its own private-label eyeglasses, which average about half the cost of the designer frames it sells. Hardy says about 80% of CoastalContacts eyeglass customers order private-label frames.
CoastalContacts’ sales totaled about $105 million last year. In the past 18 months, the company processed about 1.5 million orders. Vancouver-based CoastalContacts.com, launched in 2000, says about 1,400 new customers make purchases through its site each day and another 3,000 complete a repeat purchase.
CoastalContacts is No. 128 in the Internet Retailer Top 500 Guide.