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Building A Niche E-Commerce Powerhouse: Coastal Contacts CEO Roger Hardy (Part 9)

Posted on Saturday, Nov 20th 2010

Sramana: How well are you prepared to enter and compete in the eyeglasses market?

Roger Hardy: We have started sourcing the planet for eyeglass components, such as stainless steel and titanium frames. We have also started sourcing all of the products that go into them, such as German quality lenses and Korean quality lenses. We have sourced from the very best manufacturing in the world. We have found that we can put together a pair of top quality glasses capable of competing with any of the major manufacturers or retailers at a fraction of the cost.

Once we put the pieces together, we got really excited. We already have 2 million customers who need vision correction, and they all need eyeglasses. They are happy with the service they received when they purchased contacts from us, so we think this is a great opportunity to grow our business.

Sramana: How do you handle insurance?

Roger Hardy: A customer may have a $300 insurance premium. Our feeling is that we will be able to better serve customers because they will get more value for the compensation. If a customer feels they must spend that $300 a year they receive from their employer at an optical store, they will probably have to still pay a little more to actually purchase the pair of glasses they are looking at. If that same customer comes to us they will get a year’s supply of contacts plus at least one pair of glasses, if not two pair of glasses, for less than $300.

We think we have a very interesting model for pharmacy benefits managers and for large employers who are serving large masses of people. We can serve those big markets because it won’t take them long to realize the savings are dramatic and that the savings are substantial. Their members don’t have to settle for getting a pair of glasses every 18 months or 24 months. They can get a year’s supply of contacts and glasses.

Sramana: How does your situation apply to Web 3.0?

Roger Hardy: We are focused on a lot of user-generated content. A lot of people say they cannot buy glasses online because they think that they have to try them on. Web 3.0 will let us deal with that challenge. Customers can be educated by their friends and family much more quickly than they could in the past.

Sramana: Is that really Web 3.0, or is that just word of mouth?

Roger Hardy: We envision customers creating videos and a lot of dynamic content. I also see that our Facebook has grown by 20% over the past month. I see social channels where customers are making referrals as a next step for us.

Sramana: Your business has a very useful function, and it is about something people use on a regular basis. It is a must-have product.

Roger Hardy: When it comes to contacts, definitely. However, glasses are different. You can narrow search around glasses much more easily, and social feedback is much more important because it is design and style.

Sramana: Glasses are different because they are a fashion accessory. You do have opportunity to apply the Web 3.0 utility around the glasses, which you don’t really have around the contacts. Your vertical search functionality must also be very important.

Roger Hardy: It is very important, but more from a fashion context. We may have 2,000 frames for someone to select from, and that might be too much for a consumer. We need a vertical search engine for consumers to focus in on.

Sramana: Thank you for your time. I have really enjoyed the conversation!

This segment is part 9 in the series : Building A Niche E-Commerce Powerhouse: Coastal Contacts CEO Roger Hardy
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