With optical stores closed because of the pandemic, the premium eyewear maker Silhouette had to quickly find new distribution channels.
Shopping for luxury eyewear is still predominantly an in-person experience, with opticians heavily influencing buying decisions.
Silhouette pared its partner network and launched several digital-only and hybrid online-offline services to address changes in the retail environment and consumer behavior.
Opticians aren’t thought of as salespeople. But they have perhaps more influence over buying decisions than anyone else in retail. Part technician, part fashion advisor, part therapist, people look to opticians to help them decide on what is essentially a new face.
“Consumers trust opticians to choose the best product for them,” says Christian Ender, chief sales officer of the premium eyewear maker Silhouette International.
But what happens when the physical touchpoint and personalized experience between consumer and optician is eliminated? That’s the existential question Silhouette faced as a result of the pandemic. Shopping for eyewear, after all, is still a predominantly in-person experience— e-commerce accounts for less than 5% of the roughly $130 billion global eyewear market. And for Silhouette, whose glasses can run from around $300 for frames to $1,500 for frames and lenses, more than 90% of its estimated $160 million in annual revenue comes from optician sales.
Silhouette, of course, wasn’t alone among high-end brands in figuring out how to pivot amid the pandemic. COVID-19 hit the luxury category particularly hard, with the market declining for the first time since 2009. The estimated 25% drop in revenue last year for luxury personal goods—falling to a total market value of around $260 billion—marked the largest yearly decline on record. While people abstaining or trading down from extravagant purchases was the primary driver for the decrease, it wasn’t the only one. The reduction in tourism, which is a primary revenue driver for luxury goods, and the push toward purpose and social impact also played roles, says Marion Heil, a Korn Ferry senior client partner in Austria, where Silhouette is based. “People had other things on their minds besides luxury last year,” she says.
Despite the cancellations of routine eye exams or prescription updates, eyewear held up better than most other categories, with the entire segment falling only around 7%. One reason for that is because, on the medical side, glasses are considered safer than contacts in terms of curbing the spread of COVID-19. Still, as a result of the pandemic, luxury eyewear is undergoing a long-overdue reckoning with changes in the retail environment and consumer behavior. Or, as Ender says, “We need to create a better buying experience for our customers.”
Consumers trust opticians to choose the best product for them.
Innovation is not new for Silhouette. The family-owned company, whose core brand has been around for nearly six decades, is known for its precise craftsmanship and lightweight frame designs. Its Titan Minimal Art frames, introduced in 1999, weigh less than one-tenth of an ounce and are constructed without rims, screws, or hinges. So revolutionary were the glasses that a national space service for astronauts ordered them in bulk to use in training and for missions. To date, this Silhouette style has been part of 37 trips to outer space. “The best part,” says Michael Schmied, chief marketing officer and a descendant of the company’s founding family, “is that customers can buy that same product.”
The challenge for Silhouette was replicating that innovation and premium service in a digital environment. Doing so required making some tough choices with regards to its vendor network. In a bid to heighten the exclusive appeal of the brand, for instance, the company embarked on a selective distribution strategy, reducing its worldwide sales partners by around 30%. By being in fewer stores, says Schmied, Silhouette can work more closely with the retailers, helping them choose the best product mix from its newly launched digital showroom and creating a digital strategy that replicates the personalized service of an in-person experience.
Moreover, by reducing its distribution footprint, Silhouette can use its website to help drive traffic to its partners’ stores. One way the company is doing that is through its newly launched “click-and-collect” service. Using Silhouette’s online and mobile virtual try-on tool, customers can select up to three pairs of frames to be delivered free of charge to a nearby optician to sample when booking their next appointment. Think of it as similar to traditional retail’s order online, pickup in store service—except in this case, instead of buying beforehand, customers get to consult with their eyecare professional before making a purchase. Ender says the service gives customers the comfort of an at-home digital experience as well as a safe, secure, expert consultation because traffic coming into the store is prearranged. The service, currently offered in Austria and Germany, will roll out globally over the next few months as restrictions ease and eyewear stores reopen.
The click-and-collect service also provides a solution to the drop in tourism caused by the pandemic—about 25% of luxury goods sales are to tourists. Silhouette, for instance, is in more than 100 countries, and exports account for about 95% of its annual production. To help attract more local clientele, the company late last year launched a “buy local” initiative designed to link customers to nearby opticians. Ender says premium customers in particular value the personal consultation. The initiative also plays into the desire among consumers to buy sustainably and locally sourced products. “People want to shop nearby; they don’t want to have to buy everything from Amazon,” says Ender. “With ‘buy local,’ we can help match them with opticians [that are] open.”
People had other things on their minds besides luxury last year.
While most luxury retailers have been reluctant to embrace digital, believing it can’t truly replicate a personalized, white-glove shopping experience the results for Silhouette so far have been more than encouraging. The majority of its website’s visitors now use the virtual try-on tool, leading to strong growth in digital revenue albeit off a small base. Customer satisfaction is also through the roof, as evidenced by a roughly 50% reduction in returns over the last year.
Korn Ferry’s Heil says Silhouette’s response to the pandemic is a textbook example of an organization turning a crisis into an opportunity for reinvention. To be sure, most experts agree that the pandemic will have an everlasting impact on the business model of luxury retailers, with those who have lagged behind in pursuing a digital vertical integration strategy likely to perish or become acquisition prey. Expect more direct-to-consumer offerings and a true, seamless omni-channel approach across physical, digital, and social media platforms. Don’t be surprised, for instance, to see pop-up ads and video interstitials during YouTube videos for premium luxury brands.
People want to shop nearby; they don’t want to have to buy everything from Amazon.
Also expect to see luxury personal goods retailers across categories exploring more tailored regional experiences akin to Silhouette’s click-and-collect and buy-local initiatives. The move is a way to address the expected shift to more responsible and inclusive luxury consumption—if such a thing isn’t an oxymoron—when consumer spending returns. Luxury retailers have some time before that happens, however, with sales expected to fall this year and again next year before returning to pre-crisis levels in 2023.
In the meantime, Heil says luxury retailers need to get the right talent in place to accelerate its much-delayed and much-needed digital transformation. She says luxury eyewear in particular has been more conservative than other categories in transitioning to digital. “It’s time for that to change,” she says.
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For more information, contact:
Marion Heil: marion.heil@kornferry..com
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