No Store? No Problem. DTC Tricks for Selling the Unseen with Eyebuydirect's CEO | Reimagining Retail
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Before we jump into that, let's meet today's guests.

Joining me for today's episode, we have podcast regular, one of our analysts, Sky Canaves. Hey, Sky. Hey, Sarah. It's good to be back. Good to have you. And also joining us is a special guest. We have CEO and president of iBuyDirect, Sunny Jiang. Hey, Sunny. Hey, Sarah. Pleasure to be here. Welcome to the pod. Yeah, happy to have you here.

Okay, we're only on audio here, so our listeners don't know this, but rest assured, Sky, Sunny, and I are all glasses wearers, so we're all prepared to talk about the topic of eyewear. D2C sales account for 5% of U.S. retail sales, and D2C growth is outpacing the greater retail industry. Before we jump too deep into D2C, Sunny, can you tell us a little bit about yourself and about iBuyDirect?

Yeah, sure, Sarah. I'm Sunny Jiang, the CEO and President of Abidirect. I've been with Abidirect for about 18 years, since 2007. My role has expanded from finance to operations, marketing, and the recent general management.

At Abide Direct, we are on a mission to provide exceptional eyewear experiences from a diverse range of quality and fairly priced eyeglasses. And we have thousands of styles on the website, starting from the $6. And 80% of the products are eyeglasses, and the rest is sunglasses.

Right now, we are serving the U.S.-marketed Canada as well as a beating in Europe and Australia.

Great. Let's start with setting the stage for the eyewear industry specifically. Sunny, what do consumers care most about when they're buying glasses? Yeah, so we consistently learn about, you know, like the market trend and the consumer's behaviors as our like brand D2C or like a digital player since almost the beginning. We noticed that the consumers, they are like, you know,

wanting to spend more wisely and they want to know what's going on with the product from beginning to end. So this is one of the learnings, of course, we are applying these learnings back to the work and to the market. Yeah, I feel like glasses are like a really high consideration purchase, but they're not necessarily as expensive as other high consideration purchases, like maybe a TV or something, which makes them kind of unique.

depending on the pair you get, obviously. Right. I think they would fit into that sweet spot where consumers value price, but they're also looking at quality. And really important is the style that it's flattering to one's face. And that's been, I think, a top consideration for consumers. So they might, you know, look at that as well as

The quality, they're putting it on their face, might be wearing it every day, so they want it to last. But if it's affordable enough for younger consumers that might want to have a wardrobe,

of eyeglasses or eyewear, then they will look for the more affordable options as well. Yeah, that makes sense. I want to jump into what you just said about wanting to make sure they look good on your face because iBuyDirect operates for the most part without stores. I saw data from a survey that we at eMarketer ran showing that the number one reason people may research online and then buy in stores is to see, touch, and try the product.

So how does iBuyDirect get consumers to convert without being able to see the glasses in real life? Yeah, so as mentioned since the beginning, iBuyDirect has been heavily focusing on online. This digital model allows us to be really agile online.

So if you think about it, when we have an idea or concept, we can quickly execute on them and push them to the market and to the consumers. In the following days, we will analyze and understand what was working, what was not.

And from there, we will optimize it for better shopping experience. So this is really our dynamic circle to allow for consistent optimizations for shopping experience. And except for the, you know, like agility, also the efficiency, right? As our like a direct to consumer model, all business, sort of like optimization.

Operating most of the things online delivers us some cost savings, and we are able to pass the savings to consumers. This is also why we are providing thousands of styles on the website to choose from, starting at $6.

Yeah, I understand how like being digital first can be really helpful, especially today where like a certain shape of frame might blow up on a platform like TikTok and you want to be able to deliver on that frame, maybe even like the next day. But I've never bought glasses without trying them on first. How do you...

remedy that sort of desire. Yeah. So like that is also like, you know, like something we try to solve. You know, this is, as you said, Sarah, that for the new users, every day on a website, we have a 70% of new users.

Like a lot of people, they don't know how to shop when they are not able to physically try on the frames or glasses. So what we introduced in recent years, and that is one of the most promising features on the website, that is the virtual try-on.

So virtual trial is the software that when you activate it and you open your camera, so like the software will detect your motion, will recognize your face and will estimate your pulse. And from there, it will place the frames smoothly on your face. When you move your head from the left to the right, up and down, it follows you to allow you a vivid look and feel for yourself. And of course, some of the people

They have different sizes, right? When you adjust your PD, for example, the frame size fitting on your face will be automatically adjusted. PD, if you're not a classic glasses buyer like myself, is pupil distance. Pupil distance, yes. Thank you, Sarah. Your glasses. That's a great note.

Sky, I know you write a lot about virtual try on, not in eyewear, but just like in general. How does this expand beyond eyewear as a strategy? Well, we're seeing virtual try on taking off in a lot of different fashion categories. I think eyewear and the face might be

a little more straightforward than say with apparel where you have to consider like fabric and draping and all the different body sizes, faces tend to be a lot more consistent. So it's actually one of the easier, relatively easier use cases for AI try on. So we've seen a lot of advancements in AI and AR filters for beauty, for example, for the face. And so eyewear kind of fits in that space

Now we're starting to see a lot more in other areas like clothing, but that's going to take a lot longer. And I think that the AI and AR filters for eyewear, virtual try-on has become pretty well established over the last, you know, couple of years in particular.

And especially when you're looking at lower cost options where a consumer might be developing a wardrobe of eyewear to go with their outfits and different moods, that's a lower consideration purchase. So it's more likely that they will be willing to purchase online rather than going in store. I know I too have bought my fancy expensive prescription eyeglasses in stores, but I often will buy sunglasses online.

online, because that's a lower cost purchase. I have many pairs of sunglasses. I'm willing to try them on. And then there's a low friction part of making a return. If it's easy, if I know if it doesn't work out, I can return it with no big cost to me. I'll be more willing to try that. I have to imagine that people are also much more comfortable with facial AR than they are with

Yeah, absolutely. Just, you know, to understand our culture.

customers' behavior on the website, you know, regarding the virtual try-on feature. So about 20% of the users, they leverage this tool. But, you know, like for this group of people, their conversion rate for the final transactions is doubling.

the people who didn't leverage it. Right. You know, it is telling us that, you know, how much is it helping to elevate the customers or to ease the customers' experience when they shop online. And are you using that data from like what pairs they're trying on to target or keep those customers engaged? You said you had like

thousands of SKUs, which is great, but that can definitely create decision paralysis. Yeah, absolutely. So we, yeah, on the website, we total have over 4,000 styles for the frames and like hundreds of lenses options to choose.

But for the virtual trial, it's almost 90% available. So like which means that most of the frames are having a virtual trial feature that you can interact with. Gotcha. And you guys do have a pop-up store right now. Is brick and mortar something that you're planning to expand on or is that sort of just a marketing installation? Yeah. So from...

You know, as I say, like we just mentioned, we are enjoying so much advantages as a digital player online, right? But we also, you know, like from the surveys, we heard from the customers about their willingness to have our physical touch base with the brand. And our first pop-up store opened about one year ago in California.

Right now, like we're still very much under like on the learning phase. So, but it is a great opportunity to inform us about the future decisions on the business model evolution. Yeah, I have to imagine that once again, the volume of SKUs there is a challenge as compared to other eyewear DTCs. Yeah.

Okay, we've talked about AR. I want to move into another sort of buzzword-y topic, AI. I attended the LEED conference in New York earlier this month, and the conference was mostly focused on D2C brands. And I was shocked to see that every single vendor, it felt like, offered some sort of AI product. Clearly, D2Cs are engaging in using generative AI. How is iBuyDirect doing that? Yeah, that's a super interesting topic. And it is so hot recently, right? Yeah.

In a recent couple of years, in Abai Direct, we identified the relevance between AI and our business model. And we set up our AI committee consisting of the members from the UI/UX team, IT team, product and marketing team.

These members, they are so fascinated, so passionate to, you know, like research and use AI. They have led us as a company to initiative AI-oriented project by more than 70% in the past two years. And one of the promising features, as we discussed a little bit earlier, it was about virtual try-on. But I'm also thinking of a very recent application.

on the website. That is the prescription scanner. Oh. Yeah. Basically, you know, just a quick description about how it functions.

functions or works so you know every consumer when you come to shop online you need a prescription from your optician right to tell the details of your vision etc and a lot of customers they are challenged to upload or to translate the information from the document to the website and this software allow people to you just upload the paper to the website and the

The AI will automatically recognize the handwriting from the doctor, the image, and the information there, and will match that information from the paper to the form on our website.

That's pretty cool. I have astigmatism in both eyes, so I have like three different numbers going on under each eye there. Absolutely, I encourage you to try. But you know, like here, like it is like helping, like around since the launch about I think two, three months ago, it is rather a new feature. About 15% of the customers, they interact, they use this feature, but it is significantly contributing to the overall website experience.

revenue. Skye, how does this kind of thing compare with other D2C AI efforts that you're seeing right now? Well, a lot of D2C brands don't require that step of having to enter the prescription, the additional information. But then I think that's helping to remove friction and then you can enhance loyalty because it's easy and

The prescription will be there. It can be maybe easily updated and as the prescriptions get updated. And I think when you have like customer data around an infrequently purchased product, then you can use AI to try to drive the longer term loyalty and customer lifetime value, which in the case of eyewear, prescription eyewear really can span a lifetime. So some products are only purchased for like a short period of time. But I think eyewear is one where as we age up, we may have more eyewear needs.

For example, I'm now at the stage where I could use three pairs of three different prescriptions, one for my computer and work, one for reading and one for driving. And then I might want another one with sunglasses with tint as well. So I think using the AI to kind of meet consumer needs as they develop and then offer them the products that would be most suitable, as you say, if you have over 4,000 options, that

How do you look at the customer's history and then tailor recommendations and offerings and help them narrow it down to what they might actually be interested in or work best for them? Yeah, because I mean, if you're a D2C, there's sort of two routes you can go. You can have super tailored, super limited product assortment that is like really consistent with a particular brand, or you can have a really wide sort of

inexpensive or wide-ranging offering like iBuyDirect has. Sunny, I'm curious. You guys have such similar names in terms of where they are. Sunny's guys.

Sunny, I'm curious. So you have, I would imagine, like a few kinds of shoppers. You've talked about the consumers who view eyewear as a piece of fashion and they're probably buying a lot of products. Then there are probably people like me who really only wear one pair of glasses and will have that pair for several years. How do you get those consumers to convert and re-engage before they necessarily like have a new prescription or need more glasses? So when they do

don't have a new prescription, of course, we encourage them to, you know, like a check, double check with their doctors, you know, like on the website, we also provide the options, you know, like to have an appointment with the doctors. We are helping on that.

But really, you know, like once they are ready to shop all their, you know, like browsing on a website, experience the journey from a funnel to a funnel. So we give them a lot of guidance, especially for new users. As we said, you know, 70% or under 70% of the users on the website every day are

are new, right? So this group of people, they need a lot of instructions and information updates, etc. So we have a bunch of videos to provide some help. And also, you know, during campaigns or marketing activities or the promotions, we consistently give the information. For example, when you buy a pair of sunglasses, right?

And maybe in the IX process, we recommend you a pair of blue light blocking lenses. Yeah. Yeah. And the sunglasses can be also paired with the transition lenses. I don't know whether everyone is familiar with the transition lenses. That is the instant color change lenses, which is...

right now I'm wearing this transition, the newest color. I don't know whether you see. No, they're fully clear right now. Yeah, because I'm indoor, right? Yeah. Eyewear is weird because I know that I get essentially allotted like a pair of glasses I can buy per year because it's so tied to insurance. So you sort of have to know that some of your consumers

can convert maybe like once a year and be the company that they convert with. Yeah, that is true. So insurance can be definitely our consideration. But what we, first of all, what we do at the company is to, you know, like we're very actively working to incorporate some insurance providers. So hopefully this function will be ready in the near future so people can freely use their insurance.

But even now they don't have it. We provide the invoice form like for the reimbursement when you do that, like after when needed. And Skye, I have to imagine that there are lessons that other DTCs can glean from that because a lot of like health and wellness issues

D2Cs must be working with HSA and FSA money as well. Yeah, that's an important area now for more brands to pay attention to, especially as consumers are more budget conscious and looking at how to maximize their dollars is when they can use, particularly in the health and wellness space, when they can use insurance dollars or pre-tax dollars through like an HSA to pay for purchases. And then the brands should, you know, through their platform,

forms make it easy to submit that information and make sure that their product catalog is lined up with the HSA rules and product categories that are allowed for payment in that method. Yeah. At the risk of like going on a full tangent, we won't, but like that is sort of almost a form of holiday spend or Q4 spend that we don't really consider. I feel like Q4 is

And into Q1 as well, because there's usually that March deadline. Yeah. Yeah. Q1 is also a very popular season for insurance. That makes sense. Everyone realizes they have this, maybe not everyone, but some people realize they have this money lying around that they have to spend. So you have to. Yeah. And brands can target them that way. I think I've had some emails from brands where they market like around February, March. Like, don't forget, check if you have some money to spend and remember our products are eligible. Yeah.

Let's keep moving into our final topic for this episode. We're hitting all of the big topics today, the last of which is tariffs. Obviously, we're talking about tariffs.

Are you seeing tariffs impact your core consumers, Sunny? Yeah. So at Avidirect, we constantly observe and learn what's going on. Yes, it is true that the current situation is a bit tricky. But one of the biggest takeaways recently is that...

under such economic uncertainties, the value becomes even more essential. So like here, it is, you know, like helping us to restress our mission and the core values that is to make a high quality and a stylish eyewear accessible. It is putting us in a stronger position to meet the evolving customer needs. Do you find some consumers are like,

upgrading? Like, are you seeing bifurcation there? Are you seeing everyone sort of trade down? Yes. So like, it's both, I would say. So, and recently, we are adjusting very thoughtfully about, you know, across the product, the services, the deliverables, etc. In the business or like the platform, very interestingly, we found that about half of our customers didn't

they're upgrading from the previous purchases. They're showing our continuous trust with the brand. And this insight also helps us to reach the right balance between offerings and budget-friendly options.

Skye, is that consistent with what you've seen across retail? Yeah, I think among all this turmoil, there is like a very heavy emphasis on value and saving money, which makes shoppers more open to trying new brands and retailers.

But that also creates opportunity for those brands and retailers that have a very strong value offering to capture some of the share. Because if prices are increasing across the board, those that are more competitively priced and have better offerings, not just in terms of price, but the value with the quality factored in can really stand to benefit.

Yeah, we just saw like dollar general earnings just came in and they actually did pretty well because of consumers trading down. I have to imagine consumers who maybe see like

Warby Parker or something similar as the cheap option might now be looking around to see if there's an even cheaper option available for eyewear. Okay, that is all we have time for today. Sunny, thank you so much for joining us. Thank you for having me. It's my pleasure to be here. And thank you for being here, Sky. Thanks, also my pleasure. Thank you to our listeners and to our team that edits the podcast, providing a clear vision of our podcast.

Please leave a comment or review and remember to subscribe to the Behind the Numbers podcast wherever you listen to podcasts. We'll be back next Wednesday with another episode of Reimagining Retail. And on Friday, join Marcus for another episode of Behind the Numbers, an e-marketer podcast made possible by Sint.