← The Glossy Podcast
The Glossy Podcast
Kering's new CEO, FIFA's luxury bid, France's anti-fast-fashion bill — and a conversation with Warby Parker's Kim Nemser
00:43:07
Kering's new CEO, FIFA's luxury bid, France's anti-fast-fashion bill — and a conversation with Warby Parker's Kim Nemser
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- [00:03]
Danny Parisi
So you're scaling globally, but if you're accepting higher fees, failed payments and tax complexity off the rack, that's not a good look. Reach is a merchant of record that helps leading fashion brands streamline cross border operations with local payments, fraud protection and automated tax compliance already integrated into the platforms you use. Simplified global selling is always in style. Learn more@withreach.com glossy hello and welcome back to the Glossy podcast. I'm your host, senior fashion reporter Danny Parisi, and I'm here with our international reporter Zofia Zviglinska. Hello Zofia, how are you?
- [00:51]
Zofia Zviglinska
Yeah, good, thank you. Just came back from a week in Poland, so nice to be recovered and refreshed.
- [00:58]
Danny Parisi
Nice. It has been a few weeks since you've been on, but we are happy to have you back. And we have some big news to talk about this week. In our Week in Review segment, we're first going to talk about Luca Di Meo taking over as the new CEO of Kering. A little bit of an inspired choice since he does not come from the fashion or luxury industry. We'll talk about the reasoning behind that. We're also going to talk about FIFA, which is the governing body of soccer or football, depending on where you live, and which is launching its own luxury brand announced this week. Again, also kind of an inspired, unexpected choice. Lastly, we're going to talk about the French Senate passing a bill that would put pretty severe restrictions on the fast fashion industry, including taxes on each product and a ban on advertising. We'll talk about which brands are affected and how that plays into kind of the global conversation around fast fashion. After our week interview section, we'll have a short break and then later in the episode we have a great discussion between our editor in chief, Jill Manoff and Warby Parker's chief product and supply chain officer, Kim Nemser, which was recorded at our E Commerce Summit a few weeks back. It was a great conversation. That will be in the second half of the episode. But let's start with talking about Luca DiMeo at Kering. So like I said, Luca De Meo is taking over as the new CEO of Kering from Francois Henri Pinault, who was the CEO of Kering since the early 2000s. Like I said, of an unexpected choice, DeMeo does not come from fashion, but he's actually from the automotive industry. He was the CEO of Renault, which is a French automaker, previously worked at Fiat, previously worked at Volkswagen, previously worked at Toyota. Not a traditional luxury fashion choice at all. But I think there's Been quite a lot of investor confidence. He did a significant turnaround at Renault, and I think he's viewed as a person who can kind of help turn around a company that is in need of a new direction and a new vision. So I'll stop there. What's your take on his appointment, Zofia? Definitely an unexpected choice, but I totally see the logic of wanting someone with a little bit of outsider perspective here.
- [02:56]
Zofia Zviglinska
Yeah, definitely. I mean, you can see by the reaction of the automotive industry saying that it's a blow to Renault how much of a figurehead he was over there. And I think it's much the same for Kering. You. Kering has been in trouble for a good number of years already. Either the brands haven't had enough of, I guess, an impact to innovate and to kind of focus on what makes them unique, which means that the brand value has gone down. And as a result, Kering's earnings hadn't been as good. If you think about brands like Alexander McQueen, the kind of turnaround with a new creative director was slow. People think some of the other brands under Kering, it's also a little bit of, you know, Gucci, for example, like another. Essentially a horror story in terms of what the brand was like and where it is right now. And that's something that I think has shaped the way that Kering has fallen in the industry. And as a result, you know, the CEO taking the reins, coming from a very different background, could potentially open up, I guess, some new avenues. I think that that's why the external hire was a consideration this time around, because I think previously it's always been, you know, fashion executives.
- [04:08]
Danny Parisi
Yeah, absolutely. And like you said, Kering definitely is in need of some sort of turnaround. Their stock has been down 70% since 2021. Gucci, like you mentioned, is huge for Kering. It makes up like half of their revenue. And in the last quarter, which I think was reported in April, Gucci's revenue was down 25% and Kering as a whole was down 16%. So really not great numbers for Kering, particularly as they. They would love to compete directly, I think, with lvmh. LVMH is far bigger and is not currently in kind of crisis mode. One thing to note about Luca DiMeo at Renault is that he trimmed more than 2 billion euros in fixed costs within two years. So he did a lot of optimizing, a lot of cost cutting. I definitely think he's very business and numbers focused as a CEO, as a leader. We spoke On a recent episode about the reliance on image and reputation and marketing. Basically that a lot of the luxury industry relies on luxury brands. Much of their value is tied up in their reputation and their perception. I think automotive certainly has some of that, especially at luxury automotive groups. But it is much more of an engineering product and it's, you know, lives and dies more by the product and by the efficiency of manufacturing and things like that. It's much more, pardon the pun, but nuts and bolts. It's very like I started saying it and I realized how it was going to sound and I couldn't think of a better way to phrase it, but you know what I mean, it's much more concrete. It's much more focused on the physical product where I think a lot of luxury can be very nebulous. And they talk about cachet and things like that. So it's interesting to see them bringing in someone with just a really kind of more earthbound sort of take on business leadership.
- [05:56]
Zofia Zviglinska
Yeah, definitely. And I think that that's something that kind of analysts and investors look out for as well. I know that listening in to a number of LVMH calls, the marketing spend is always something that has kind of come under question because either it is very, very big or there are not enough kind of drastic cutbacks in terms of that space spend compared to, I guess, the amount of output you're getting out of it. Especially right now when luxury is undergoing a little bit of a slowdown. I think that that marketing spend isn't quite as justified as it used to. But at the same time, the brands still need to maintain, I guess, that image, the quality, that cachet that you mentioned and caring, I'm sure will have to do the same. Marketing spend will have to go down. And obviously as a result, I'm sure that some people also experience potential layoffs. You know, certain parts of the business might be cut down. Kering is definitely going to be undergoing some changes with this move.
- [06:54]
Danny Parisi
Yeah. And then last thing I want to say on this, we've talked a lot about the creative director shuffling at big luxury brands and luxury groups. It's become increasingly common in recent years for a luxury house to have multiple creative directors and even just a handful of years. I think CEOs are a little bit less prone to that in the luxury space. But certainly we've had some big CEO departures from. From major brands in recent years as well. I do wonder if we'll start to see some of that. The thing we've talked about where creative directors are given kind of a short window to make their mark and if it doesn't work right away, they get thrown out and they bring in a new creative director. If some of that will start to leak into the business side of things. If the c. If the CEO is not making a big impact right away, do we get rid of him? Not saying that's necessarily going to happen with Luca De Meo at Kering, but I am kind of starting to wonder if that the changes we see in creative leadership will apply to business leadership as well.
- [07:50]
Zofia Zviglinska
Yeah, definitely. That's a great point.
- [07:52]
Danny Parisi
So, next topic I want to talk about. FIFA is launching a luxury brand. For those of you who don't know, FIFA is the international governing body of soccer or football. Probably when I was growing up in high school, most well known as the name of a very popular soccer video game with the FIFA branding, which I played so much of with my friends. But anyway, a huge, huge organization. They're not a league per se. They're not like the NBA, but they are the governing body of the sport itself. They do organize tournaments, most famously the World cup, which is one of the biggest sporting events in the world. They are a pretty huge organization. Their revenue is many billions. I think it was at least 5 billion in 2022. It's probably up around 7 billion now. I think also infamously corrupt organization. There have been many, many scandals, as you can imagine. Anyway, that's background on FIFA. The news is that this week they announced a luxury brand called FIFA 1904. Now, from Reading the announcement and reading into it a little bit, it is not like soccer apparel that just costs a lot of money. It's a full on luxury brand, like ready to wear suits, like handbags and things like that. It is a full on luxury brand, which I think is pretty unexpected. There's been tons of crossover between luxury and sport. There's been tons of crossover between luxury and soccer. Some of the biggest teams. Paris Saint Germain has like a really fancy and very expensive store in Manhattan that I've walked past. But this is not a team launching a brand or a league launching a brand. It's the governing body of the sport launching a luxury brand, which I think is very unexpected and pretty unusual. So I'll stop there. I mean, what's your, what's your take?
- [09:34]
Zofia Zviglinska
Yeah, I mean, it's, it's very weird to me. Like obviously I know FIFA from a European background and it doesn't seem like the kind of company which would have enough history and heritage, you know, from, from an apparel perspective to make something like a luxury brand. I don't know, it doesn't feel quite as organic, maybe, as some of the clubs creating their own lines. You know, if you're talking about PSG or some of the Italian clubs that have quite strong branding within their club, you know, either by the colours, you know, the brand history, they've got like a whole archive of things. I just feel like you can't just end up collectively saying, oh, yeah, FIFA, you know, has all of that and therefore can kind of tie that into their products, because each of these clubs is distinct. And I think that's what makes it, you know, so interesting, whether that's Premier League or kind of the major European leagues.
- [10:25]
Danny Parisi
It's such a good point. I think inorganic is exactly how I would describe it. No one is a fan of FIFA, the organization. They're a fan of AC Milan or Juventus or Real Madrid, which just had a partnership with Louis Vuitton that they announced this week. So there's lots of crossover between the individual clubs. Like you said, it's weird for the league itself, or not even the league, I'm sorry, the governing body, to be cashing in on their image, their reputation. They have been around for a while, and they have name recognition, which I think is something. Actually, the idea came from Julia Ann Quay, who's the founder of V Files, and she pitched the idea to FIFA after traveling with some team owners to the last few World Cups. There's a good New York Times story about this, and I'm going to quote from the. The story. This is a quote from Julia Ann Quay, where she said she's talking about the owners of various clubs and teams. They travel with multiple trunks of luggage, they speak multiple languages, they're sitting at the most important tables in government as well as sport. She recalls thinking, you guys are a walking brand. So it seems like the kind of genesis is people who own soccer teams are rich, so they would make a good basis for a luxury brand, which is. I can see the logic, but it does seem very, very odd.
- [11:46]
Zofia Zviglinska
I completely disagree with Julia. I think that these people are most likely going to be also, in some sense, corrupt officials. There's a lot of murky goings on in terms of who the owner of a football club is. To put these people on a pedestal and then design lines based on their either aesthetic or background or visual identity, I think is a little bit much. I don't think everyone needs to be an IP product in football. And while the players are definitely someone that a lot of younger people aspire to, they might want to dress like them. I don't remember seeing anyone saying that they would like to dress as a football club owner unless they're playing football manager or one of the FIFA games.
- [12:29]
Danny Parisi
Even the owners of your team, the club you're a fan of? I think people often hate the owners. I don't know, I just don't think they're the most aspirational people. They do have a designer attached by name to the brand. The clothing will be designed by Marcus Clayton, former design director of Fenty, which was Rihanna's very short lived fashion line. So there is some sort of vision here behind the scenes, but I still agree that the whole thing feels a little inorganic to me.
- [12:57]
Zofia Zviglinska
Yeah.
- [12:58]
Danny Parisi
How about we move on to our last topic? So you tipped me off to this, but last week the French Senate approved a bill that would come quite strictly curtail fast fashion brands. It includes extra taxes on fast fashion products, a ban on advertising which also includes influencer advertising, which we can get to that in a second, and a requirement for pretty strict environmental disclosures. The taxes as far as I can tell would start at roughly $5 per item and rise to $10 by 2030, which for low margin, low price goods is pretty significant. I mean a $10 fee on top of a $2 shirt or something is a pretty big deal. So again, relying on your European perspective here, what do you make of this bill?
- [13:42]
Zofia Zviglinska
Yeah, so obviously France in general has been on a very specific targeted campaign against Shein. Obviously the French eco regulations have been a bigger focus in France maybe than in some other parts of Europe and elsewhere in the world. So. So the French government is also very particular about making sure that companies follow these directives because of the growth of Shein and also other bigger kind of E commerce players that are focusing on lower priced goods like Temu, those I guess like wish lists for what the future of Europe would look like from a fast fashion perspective essentially were curtailed because of these players. I think at the same time France has been dealing with repair laws. They don't want to be sending products out. They have very good relationships I think with a lot of countries in Africa and as a result doing this would make things a lot worse. If they keep sending product out there, I think they want to repair those relations and I think that as a result they're coming down on Sheehan pretty hard. The bill was adopted by the lower house in March and then it was passed again by the Senate with 337.
- [14:53]
Danny Parisi
Votes for to one against right.
- [14:56]
Zofia Zviglinska
And one against. Yeah. Don't know who that one person is, but it will see some more kind of legislative hurdles as it moves forward. But I think it's very encouraging that it's had such overwhelming support. And it also, I guess, shows the mindset of where France is at when it comes to the fast fashion conversation, which could end up bleeding out into the rest of Europe as it typically does.
- [15:18]
Danny Parisi
Yeah. What do you make of this element of the bill where some pretty notable European fast fashion companies like Zara and H and M are exempted from two of those three requirements? I think the tax requirement and the advertising ban is not going to affect those companies, but the environmental disclosures will. I have seen some, what seems like to me fair criticism that that seems a little unfair or protectionist, that the Chinese companies won't have to abide by this and European companies won't. But I don't know, is that all it is? It's just targeting non European companies and protecting the European ones, or is there more there? I don't know. What do you think?
- [15:59]
Zofia Zviglinska
I mean, there definitely is more there from an environmental standpoint. I know that both because of the, I guess, changes to the supply chain on the side with Zara and H and M in particular, I think has been doing a lot more when it comes to designing for sustainability, focusing more on sustainability programs, focusing funding sustainability programs, which is extremely important. Like even nowadays they are some of the most, I guess, progressive when you're thinking about fast fashion brands or mass fashion brands and what they're doing to combat the impact they're having but also improve the industry more widely. They support younger designers. They put money towards energy projects as well. And they have also had a little bit of a look at overproduction, what that means for the brands. I think as well, when you're thinking about Zara, H and M, I'm not sure what the Kiabi one is. But for Zara and H and M in particular, both of these companies have raised their price points over the last couple of years, which I think is also meant to discourage the level of, you know, shein haul kind of shopping habits that have kind of blown up over the last couple of years. And I think they're targeting a slightly different customer as a result. And they are putting a little bit more attention towards where, you know, the products and the materials that the products are made from are coming from as well.
- [17:22]
Danny Parisi
Yeah, yeah. No, I mean, I do think there is a distinction between those companies more than just sort of where they're Based. Last thing I want to talk about is the provision within the advertising ban that it includes influencer marketing. I mean, immediately thought of that ill fated Shein influencer trip from a year or two ago which pretty spectacularly backfired for everybody involved. But I was thinking about how influencers and influencer marketing is a little bit of a shielding strategy. Sometimes it's a little bit, you know, brands kind of, I think are anxious sometimes about doing influencer marketing where you're handing over some control of your brand image to someone who does not work for you to an influencer. But if you're kind of under the microscope from regulators and governments and stuff, working with influencers might be a way to kind of sneakily hide your own involvement. And there's lots of rules about influencers have to disclose what's an ad, but we also know that a lot of times they don't. So I do think influencer marketing can be a way to sort of get around rules. So it's interesting that this French bill specifically includes influencer marketing within that.
- [18:32]
Zofia Zviglinska
Yeah, I mean it's something that I think they've been focusing on a lot more. Like influencers in particular, I think they understand how valuable, I guess that influencer opinion is on spending habits. How many brands end up being supported without any kind of extra information or oversight into what the influencers are promoting? I think most of the time if you're getting information from a 20 second video, chances are you're not going to be looking at sustainability impact, you're just going to be looking at what you're seeing in front of you as a result. I think that it's become almost under regulated in many ways because promoting products, whether that is, you know, something that is going to be bad for the planet, bad for your own health, you know, I don't know how many influencers there are nowadays who promote, whether that's like athleisure or something made of plastic that probably ends up being in the lining of your gut at some point. Like it's, it's just a very quick industry and influencers promote things because they're getting paid, not because necessarily they're doing it because of their values.
- [19:36]
Danny Parisi
Yeah, absolutely. I think that's all the time we have this week for our week in review section. But thank you so much for being here, Zofia.
- [19:43]
Zofia Zviglinska
Thank you so much. It was so fun.
- [19:45]
Danny Parisi
Like I said at the top of the episode, we're going to take a short break and then when we come back you're going to hear A great conversation between our Editor in Chief, Jill Manoff and Kim Nemser, who is the chief product and Supply Chain officer at Warby Parker. They had a great conversation at our E Commerce Summit in Miami at the beginning of June. They talked about omnichannel retail. They talked about how Warby Parker is using AI. A lot of interesting stuff. So stick around after the break for that. Saving money Selling internationally and boosting your transaction approval rates is always in style. As a merchant of record, Reach helps ambitious fashion and beauty brands optimize global sales with local payments, fraud protection, and done for you. Tax compliance. From registration to filing and remitting, Reach is already integrated into the platforms you use. So activation is fast. No coding, no extra dev work. Brands like Revolve and Everlane use Reach to increase approval rates to over 90% and cut cross border costs by up to 40% while eliminating the stress of global compliance. Learn how to unlock the full potential of your global sales@withreach.com glossy that's withreach.com glossy.
- [21:11]
Jill Manoff
Well, let's jump in. I think that everybody knows Warby Parker with being, you know, at your origin, being synonymous with direct to consumer. You've since evolved. Tell me about your take on prioritizing direct to consumer now, what channels you're playing in all that jazz, all the stuff.
- [21:28]
Kim Nemser
First of all, thank you so much for having me. I'm really excited to be here. And as Jill said, I oversee our product strategy and supply chain organizations, which is essentially everything from the initial design and development of the product all the way to making sure it's in the right channel and getting it to the customer. On direct to consumer, I would say first and foremost, that's our heritage and that hasn't changed. We're very much a direct to consumer brand and one of the things that we talk about a lot is putting the consumer at the forefront of every decision that we make. But since we launched in 2010 where eyewear was kind of just online and that was our main strategy, the channels have evolved a lot. In the last 15 years, we've opened over 280 stores and retail is over 60% of our business. So you can imagine that's been a large evolution. On top of that, we've really expanded our products and and services. So besides just eyewear, we're selling prescription sun. We launched contact lenses about five or six years ago and now we offer eye exams in over 80% of our stores, which has been a huge unlock for us from just a customer engagement perspective. But also has forced us to be pretty innovative on how do we bring some of that into our E. Comm strategy. Right. So what does that seamless integration between those two channels look like?
- [22:38]
Jill Manoff
For sure. What about retail partners? What's your take on Google?
- [22:42]
Kim Nemser
Well, I don't know if you know, but we just announced recently that we're launching with Target, which has been a really exciting update. It's really fun when you've been working on something for so long to finally kind of get it, put it out in the universe. So starting on the back half of this year, we'll be opening five shop in shops in Target locations. And this is really a new strategy for us. Right. We've really just sold online and in our stores, but the strategy felt kind of like a natural evolution for us, sort of playing back to where are our customers, how do we meet them, where they want to be met and how they want to shop. And Target felt like a pretty natural evolution there. So we know Warby Parker's shop at Target, so how do we make that more convenient for them if they're shopping? Kind of giving this holistic eye care offering. We also know there's probably Target customers who haven't engaged with the brand before. So how do we make that more consistent for them, but very exciting. And then the other piece within these five shop and shops is we spent a lot of time with Target making sure that it felt like Warby Parker in the Target stores. So it's all the same products and offerings. It will look and feel like a Warby Parker from the colors to the signage. All the advisors will be Warby Parker advisors. So really making it that organic Warby Parker experience inside of Target.
- [23:55]
Jill Manoff
Nice. And tell me again, you consider this kind of a trial run, a test test bed for further expansion or tbd?
- [24:02]
Kim Nemser
I would say one of Warby Parker's core values is learn, grow, repeat. And this is very much in that vein. We're starting with five so we can learn. It's a new strategy for us. We haven't done this exactly, but the idea is to be able to grow and make this a repeatable and scalable venture with Target. So starting with five at the back half of this year with the hope that we learn and figure out how to make this a larger scalable process.
- [24:24]
Jill Manoff
Nice. Well, speaking of your experience and you mentioned some product expansion, you also had another fun, exciting announcement that Intelligent Eyewear via a partnership with Google.
- [24:34]
Kim Nemser
Yes.
- [24:34]
Jill Manoff
Tell me about the opportunity.
- [24:35]
Kim Nemser
We've had some big announcements in the past couple months. I know and what's fun to my earlier point is we've been working on them for some time, so to finally get to put them out in the universe this year is really exciting. Yes. We announced at Google I O a couple weeks ago that we'll be launching smart glasses with Google and this was another very natural partnership. I think when you think about our approach to eyewear and design and the overall customer experience and you put that back with Google and their best in class technology ecosystem, it sort of just makes sense in that piece. I think on top of that, the evolution of multimodal AI is also made this timing just feel right. I think glasses are part of your everyday use. Use them to see the world. Technology is more than everyday use. Right. We're so tied to that piece and so how do we think about the utility, the function, the innovation and putting it in this new form factor which is glasses. So I can't share too much, but we'll be launching after 2025 and if you guys haven't seen the Google I O announcement, they do talk a little bit about the functionality of glasses. Some of my favorites are the translation piece. I think it's amazing to be able to be translating in real time and communication wayfinding, which is great for me because I have a terrible sense of direction. It's the idea that I could just have that within my glasses and then the best is actually the memory function. So hey, where did I last leave my keys? Or where's my phone? Which I feel like I spend too much time in my day looking for things. So it's this idea of what feels natural, but really what we're focused on is incorporating them into your everyday versus it being a gaming or a specific use case. Like how are these glasses just part of what I do? And I think that sort of plays on how AI is coming into everything that we do all the time.
- [26:23]
Jill Manoff
That's exciting. It really is very forward. Feels like the future.
- [26:27]
Kim Nemser
I think that's what we think it is, the future. And we're excited to be partnering with another team who has a like minded approach to it.
- [26:35]
Jill Manoff
Yes. Well, I talked about, I mentioned those glasses in my intro when talking about AI is transforming retail high level. Like, are you talking about AI in every conversation these days?
- [26:45]
Kim Nemser
What role is AI?
- [26:46]
Jill Manoff
Every conversation, every conversation in house. What role does AI play in your business?
- [26:50]
Kim Nemser
I think even my kids are like, okay, okay, we get it, we get it. AI is coming. My kids just went through final exams and it was amazing utilizing AI to figure out how to help them study or prep or do study guides. We just went on a family trip and it was like we used a travel planner. But I think AI was even more smarter about taking all the recommendations that we liked and didn't like. And so I think it's here and it can be overwhelming if you don't start to chop it up into exactly what problems am I trying to solve and how can AI better use those? But in the world of retail, when we think of AI, we think of a couple different things. One is how can it enhance our customer service? Another is how can it enhance the customer experience? And then what kind of problems can we solve for that are faster, more efficient, and make the customer want to come back? And then lastly is the personalization. I feel like we all hear that word. What does personalization actually mean and how does it feel authentic? And so on the customer service piece. I mean, as a tech enabled brand, we've always thought about how technology can enhance the customer experience. And so we built an in house proprietary system that's our point of sale, but we call it our point of everything with a little nod to our literary heritage. And really what that does is bring all the customer information that we have to the hands of our advisors. So they're each carrying around their own point of everything. And that might have everything from glasses you bought in the past, your prescription, if you've engaged with one of our other virtual tools, what you may have liked or not liked when it came to your digital experience, and how do we translate that into the retail experience? So really optimizing that customer service, because one of the things we know is that our customers value convenience over almost anything else. Right. They come to Warby Parker for convenience, for great experience and stylish glasses at a great value. But that convenience and that, you know, how fast can I get this done without being overwhelmed, without having to make too many decisions is a big part of that. Yeah. On the experience side, the other piece that has been really fun is we just launched something called Advisor and it's really our newest AI tool. And the idea is how do we bring that personalized Advisor experience in stores into the digital universe? And that's where we're really using generative AI to say, okay, I'm going to take a face scan, I'm going to take your measurements, understand your bridge width and all the different pieces, and start to recommend frames and sort of like a dating app, you're swiping right or left. I like these, I don't like these. And the nice part about that is our product team gets to see what people don't like. Okay, maybe we have too much green. Maybe we need to go more into blue. Or this classes don't seem to fit anyone or they never get recommended. Why? So we're using that data to inform future product launches, but also to get to know the customer. And this is pretty new. But the engagement's been through the roof. So exciting. But also the conversion's been really high. And so we're realizing, ah, there's something authentic about this AI experience. Experience. And it's sort of understanding how we can continue to replicate that online, but also in stores. What is it about that experience that's engaging? That was a long answer. But there's so much.
- [29:52]
Jill Manoff
That was great. Well, I know of your Virtual Try on tool because I've used it. Is that an evolution of that or is the same customer using both?
- [29:58]
Kim Nemser
So it's the same customer using both. And Virtual Try on is really. How do we know? One of the things that was really unique about Warby when we first started is, is we allowed you to come into our stores or even through the home Try on program and engage with the glasses. I think when you think about what we set out to do 15 years ago was to put the power back in the consumer's hands. It used to be you went maybe to an eye doctor and they said, these are the five glasses that you can choose from. And then you sort of go from there. We sort of said, you can try on everything, like, get in there, experience the frames, whether through home Try on at home or in our stores. And the Virtual Try on was really that how do we allow you to engage, engage with more of our assortment in an easier way? And then we even enhanced that with our glasses eraser tool, which is what we call another generative AI piece where we heard the customers complaining, okay, I love Virtual Try on, but I wear glasses, so how can I try on glasses? I have to have my glasses on to even see. And so that sort of. Our product team came back and said, what if we erased the glasses so that you could try them on virtually, but you're still wearing your glasses so you have the element to see. So that was a really fun unlock and one that our product team was really proud of because it was pretty innovative. But it even just upped the engagement. And one of the things with Virtual Try on is we know if you engage with Virtual Try on at home, you're that much more likely to convert when you come into the stores because you've gotten more well versed in the layout of the store, what fits, and that kind of thing. So that's been another really fun one for us.
- [31:17]
Jill Manoff
Yes. You're like, does it really look this good? Then you try it on.
- [31:20]
Kim Nemser
Exactly.
- [31:21]
Jill Manoff
Same thing.
- [31:21]
Kim Nemser
Well, we know some people come into our stores and then they want to go home, and they either want to get feedback from maybe their spouses or their loved ones, or just they don't want the pressure of converting in stores. We also know some people don't like to come into the store until they've done all their research. So this idea of omni channel, as overused as that word can sometimes be, there really is an interplay within the channels, and we learn so much from both channels. I mean, my team and I flew in yesterday and we spent all day on the sales floors at a bunch of our different Miami stores. What are you hearing? Are people talking about advisor? We just launched a new campaign talking about our retail experience because brand awareness and retail has been a big thing, but really, you still have to get on the floor and talk to your sales associates and understand what they're hearing and what the customers are asking for.
- [32:04]
Jill Manoff
Let's dig in there a little bit. How do you guys think about omnichannel and, like, as you open stores, is it. I would think there's a halo effect on your e commerce sales and all of that. You tell me.
- [32:12]
Kim Nemser
Yeah, Well, I would say one of the distinct advantages we have is we are a digitally native brand, and so that digital heritage allows us to be pretty informed with our retail strategy. We know where our customers are. We know how they're shopping by geo. We know what markets are saturated, undersaturated, oversaturated, and kind of play with that piece. But really a huge part of brand awareness has been opening stores, stores on stores, on stores, sort of put the brand out there and get people even that much more interested. But everything we do is sort of at the forefront of how do we serve our customers and how do we make this experience easier. So we know whatever we're building in stores, we need to also replicate somehow online so that the interplay between the two. But if you engage with us online, you're that much more likely to convert when you come into our stores, if you get an eye exam in our stores that same day, conversion is through the roof because you're experiencing the total holistic offering. So I'd say omnichannel is sort of at the heart of everything that we do. And every decision that we make, knowing also that retail drives E Comm. The more we have stores, the more customers trust and engage with the brand, feel the product, engage with it, the more comfortable they are to convert online. But also there's that whole new generation of shoppers that we're all trying to figure out in terms of how they consume media, what acquisition looks like for them. And we know that they're just, they're digitally native. Right. They grew up shopping online. And so how do we make sure that we're engaging them and bringing that customer experience, the education overall to them and maybe even driving them to our stores?
- [33:40]
Jill Manoff
Yes. Well, I want to circle back to AI because there are many ways that you guys are using technology and AI for efficiencies. And we just had a working group about this very topic in house. Efficiencies. There were some questions from the attendees from this group about how do you get the employees, staff to engage. Maybe they see it as a threat. But anyway, is this something you guys are embracing and what kind of internal operations has it proven most effective or valuable?
- [34:07]
Kim Nemser
I would say we've had a lot of conversations about getting the employee base comfortable with AI and really looking at it as an optimizer, an enhancer, and not a replacer. Right. I think putting that message out there from the very beginning. So we've put AI into everyone's computational world so that they know that it's at their fingertips and are almost reminded, hey, I could do this through AI. That piece. We also launched something that we're calling the AI Visionary program. And that's every team is nominating one to three people on their team who are kind of AI power users. And giving them this opportunity a from a growth and development perspective to sort of shine amongst their peers, but also to say, here are best practices. So I know in my ALTIM meeting in two weeks, we have our AI visionaries coming up and sort of showing. Here's how I've started to incorporate AI, because some people are super excited about it and some people are super overwhelmed. I mean, me included. At first it was like, I should use AI. What does that mean?
- [35:02]
Danny Parisi
Right.
- [35:03]
Kim Nemser
Where do we start? And I mean, for me, I started now, like taking notes on my train into the city and then immediately having them be put into slides and like slide generation. I don't know about you guys, but we just have a lot of decks at Warby. We love decks and we make decks on decks on decks. If AI can help with that, whether it's through chart creation or, or summarization. I think those are some of the key pieces on the back end. In my supply chain and labs world, we're looking at a lot from inventory allocation. How do we run these models? And I think part of it is growing with trust. So teaching some of our allocation specialists or planning specialists, you do it your way, have AI also do it and cross reference and see, hey, this is where I still need to overlook, oversee this piece or hey, I can start to integrate this and that frees up my time to be even more strategic or forward thinking. So I think getting the adoption is a big piece of it. But I would say from an allocation and inventory perspective, I mean, I don't know if you guys have been dealing with tariffs, but those have been a real work driver in the last two months. So it's actually kind of a good on the spot. How can AI help us with these PO reallocations or PO reissances or communication with vendors on a larger scale in real time? How do we use that? And that was actually a great learning because we had to do it.
- [36:19]
Jill Manoff
Oh great. And a great unlock. You were able to put it into use.
- [36:23]
Kim Nemser
Exactly.
- [36:23]
Jill Manoff
Okay, fantastic. Well, when it comes, you mentioned the way that the try on was informing your product development. Any other ways that some of these emerging technologies are informing that?
- [36:34]
Kim Nemser
Yeah, I mean I would say from virtual try on and glasses eraser to NowAdvisor, seeing what our customers are engaging with in real time is massively helpful to our merchandising teams. If there's a certain color that's trending or there's a style that keeps coming up but it doesn't fit so they keep not using it from a fit perspective. That was sort of how we launched extended sizing way back in the day is we had some of our best sellers like Percy and everybody loved Percy, but it only came in one size. And so we thought, why can't glasses be like clothing and we can offer them in an extension of sizes. So that's sort of how we got to Percy narrow and Percy medium and Percy wide. So I think some of those on the spot customer interactions with products that we're seeing both from our AI tools but also even from our store advisors informs how we're thinking about product trends as well. Like we may have three red frames and if every single red frame keeps getting recommended and swiped right, maybe we need more in different shapes or in different sizes, that kind of thing. So from a trend perspective, a size and fit perspective, it's definitely helping the team be that much faster and seeing it's not just waiting on sales only, but sort of upfront engagement with the customer.
- [37:38]
Jill Manoff
Yes. It seems like you have a good grasp on how do you, I don't know, personalize communication and achieve personalization with your customer. Any other ways we haven't discussed?
- [37:47]
Kim Nemser
I would say from the services perspective. Right. As eye exams have been a really big unlock for us is bringing the doctors and the exams into our stores and really understanding that, you know, Warby's an interesting intersection of technology, fashion, retail, but also medical. Right. And so when you think about all three of those and how we bring all four of those and how we bring them together, that's been a big piece. But on the services sense, Covid was really interesting because obviously people couldn't get to stores, couldn't get to their doctors. So how do we engage with the telehealth community in that sense? So our virtual vision test allows you to use your phone to renew your contacts or a glasses prescription. But it's also an interesting one because if you're not eligible, also can drive you into our stores to meet with our doctors. So it's kind of that whole omnichannel approach. Digital retail. Exactly.
- [38:32]
Jill Manoff
So nice. Well, I have to ask because you also oversee supply chain.
- [38:35]
Kim Nemser
Yes.
- [38:35]
Jill Manoff
So like you mentioned tariffs. Can we just like the impact kind of in terms of your operations now or like how are you guys navigate? This is a huge question for two minutes. But anyway, I'm glad there's only two.
- [38:47]
Kim Nemser
Minutes because you don't want to hear about this for more than that.
- [38:49]
Jill Manoff
This is not great.
- [38:50]
Kim Nemser
I would say it's changing on the daily. And so I think what we're focused on is what decisions do we need to make right now and where can we strategic in waiting a little bit? I would say one of the things that's become really clear to us is the importance of vendor relationships. Right. And the strong vendor relationships that have allowed us to work directly with them. So we. We keep our portfolio base manageable. Right. And so that we can call them and say, here's what we're going through, here's what we're proposing. I think we've also our vendor bases are across countries of origin, which has been very helpful. So we're not overexposed in one particular area in that sense. But it's allowed us to be dynamic. I think the technology that we've put in, whether it's our PLM systems or planning systems, have allowed us to be more nimble. But I can't stress enough. We have been good to our vendors and they've been good to us. And in times like these, where there's so much uncertainty, leaning into that and knowing, you know, the more transparent you can be about where your struggles are, where you see promise in the future and giving them those forecasts, but also saying, I don't know what will happen tomorrow, but here's where we are today and here's what I know I can provide has been really helpful. Yeah. And being open to change.
- [39:59]
Jill Manoff
Yes.
- [40:00]
Kim Nemser
Like, I think we've all recognized there's certain rules that we want to set, but we can't always live by those because we can't control this.
- [40:06]
Jill Manoff
Would you say the word of the.
- [40:07]
Kim Nemser
Day is nimble, Nimble dynamic, Nimble Omnichannel. AI.
- [40:13]
Jill Manoff
All the points.
- [40:13]
Zofia Zviglinska
All the points.
- [40:14]
Kim Nemser
Exactly.
- [40:15]
Jill Manoff
Oh, my gosh, Kim, this was fantastic.
- [40:16]
Kim Nemser
Thank you for having me.
- [40:17]
Jill Manoff
Thank you for being here. Let's give her a hand, guys. That's all for this episode. Our theme music is by Otis MacDonald. Be sure to give us a rating on. On Apple Podcasts or wherever you're listening to the Glossy Podcast. See you next week.