Luxottica

Grace Chang, Lara Kessides, Stephanie Lin, Brit Vezina

Background Luxottica Group S.p.A. •  1961 founded in Italy •  1971 contract manufacturer to independent producer Expansion into Eyewear •  1980s introduced glasses as eyewear

–  Luxottica created licensing agreements with high-end designers –  1999 acquired Ray Ban

Expansion into Retail Chains •  1995 U.S. Shoe Corporation (LensCrafters) •  2005 Move into parts of Asia and Latin America

Service and Welfare Programs •  1988 OneSight •  2009 Corporate Welfare Program in Italy

SWOT Analysis STRENGTHS •  Strong company with a variety of

brands and retailers •  Large network that includes a broad

range •  Powerhouse in terms of glasses and

sunglasses •  Community welfare programs

WEAKNESSES •  Due to the large variety, spread out too thin •  The high price of designer frames does not

always correspond to the quality of the frame, compared to non-designer frames

•  No convenient, personal online shopping experience

•  Not all subsidiaries offer virtual try on •  High markups (frames not directly from

manufacturer)

OPPORTUNITIES •  Create a stronger personal experience

in shopping •  Utilize Social Media and digital

platforms •  Continued international investments

and emerging markets in Asia •  To be a more ethical company

THREATS •  Smaller and more personal boutiques •  Slow economic growth affects people’s

disposable income •  Rising counterfeit market

Research Objectives

•  To understand the consumer’s decision drivers and buying process in purchasing eyewear

•  To analyze the role of various channels (i.e. in-store, online, etc.) •  To utilize social media based on the findings •  To cover various aspects of the market share that Luxottica is missing

out on

Research Methodologies

•  Open-ended Questionnaire –  Google form

•  One-on-one Interviews –  2 prescription and 2 sunglasses

•  Focus Group –  5-person

•  Secondary Sources –  Mintel, Newspapers (WSJ and NY Times)  

Research Findings: Prescription Primary (Open-ended Questionnaire): •  The majority of the 34 respondents

ages 18-34 choose designer brands when selecting their glasses frames

•  The majority shop for prescription glasses in a store versus online--specifically, retail stores.

•  The majority do not use social media platforms for shopping purposes--but they do like to receive coupons.

Secondary (Mintel): •  Millennial-aged prescription glasses

wearers tend to be most influenced by brand names, trends, and recommendations by others.

•  Glasses purchases for women tend to be driven by appearance. Women also report that they have a harder time finding glasses that fit their face the way they like.

•  Consumers want and expect customized buying experiences.

•  Prescription glasses wearers aged 18-34 are more likely than average to be influenced by celebrity endorsers.

Research Findings: Sunglasses Primary (Questionnaire and Focus Group): •  The majority of the 23 respondents

age 18-30 have purchased designer sunglasses.

•  4 out of 5 focus group respondents wear and shop for designer sunglasses on a regular basis.

•  Ray Ban is the preferred designer brand of sunglasses.

•  Popular channels include specialized sunglasses stores and department stores.

•  Primary factors in purchase decision include brand, fit, and price.

•  Social media is not an ideal channel to receive promotions.

•  Ideal experience includes good customer service and knowledge from store associates.

Secondary Research (Mintel): •  Most important factors when shopping for

sunglasses: they look good (69%) and they have a comfortable fit (68%).

•  A more personalized approach to sunglasses shopping experience will help shoppers.

•  Major Sunglasses Trends: •  Ethical branding

•  Warby Parker •  Education •  Innovative walk-through duty free

stores •  Augmented reality

•  Mobile application to try on sunglasses virtually

•  Cool vending

Research Findings: One on One Interviews

Prescription •  Majority of participants do not care

about the brand •  Usually wear contacts •  No need for expensive glasses

that are only worn at home •  Prefer in-store shopping

•  Ability to physically try the glasses on

•  Purchases glasses after the eye exam

•  Utilizes websites to get deals on cheap frames •  Coastal.com (first pair is free)

Sunglasses •  Prefer to buy cheaper, non-designer frames

•  Sunglasses are more likely to get damaged

•  Don’t wear them frequently (won’t get enough use of them to be worth the cost)

•  Not very concerned with designer name •  Enjoys having a variety of designs so usually

purchases cheaper, non-designer pairs

*Both sets of interviews suggest that users don’t enjoy advertisements on social media unless they are searching for a specific deal or promotion. Interviewees are all heavy social media users, but like to be in control of what appears (i.e. ads or pop-ups).

Current Buying Process: Prescription

1) Need for prescription glasses or prescription sunglasses - Change in sight/vision

2) Get an eye exam from a doctor 3a) Purchase glasses from the eye doctor

- OR - 3b) Receive the prescription and take it to a third party vendor (boutique or online) 4a) If purchasing in a physical store:

- Choose a few designs based on face shape, price, brand, etc. - Try them on and receive immediate feedback - Based on budget and favorability, purchase new pair of prescription glasses - Return to store when frames are ready and retry them on for any adjustments

4b) If purchasing online: - Choose a website based on promotions, word of mouth, internet search, and credibility - Choose a design based on visuals and provided measurements - Enter prescription - Receive via mail - Hope they fit

Current Buying Process: Sunglasses 1) Need for sunglasses - New trend, replacing old pair, deal or promotion, want an additional style 2a) In store - Go to a boutique like Sunglass Hut or department store like Nordstrom, Saks Fifth Avenue

- Choose a few designs based on price, style, brand, comfort - Purchase the pair that receives best feedback - Receive any adjustments - Take home immediately 2b) Online

- Choose a website based on promotions, word of mouth, internet search, and credibility - Choose a design based on visuals and provided measurements - Purchase a pair based on information provided by the website - Receive via mail - Hope they fit - If not, return according to the website’s return policy

What Does It All Mean?

Prescription Wearers Value: •  Personal experience: receiving expertise advice and

suggestions, as well as opinions as to how glasses look on them.

•  Brands that are sustainable and promote ethical practices. –  Sharing/Leasing/Renting

Sunglasses Wearers Value: •  Excellent customer service. •  Knowledgeable sales associates.

Two Major Holes in the Current Online-Shopping Experience 1.  Luxottica offers an augmented “try-on” experience for consumers

shopping online--but they can only do so by downloading an iPhone/iPad/Android app. But what about consumers who don’t have smart phones, or prefer to shop on the larger screens of their laptops/desktop computers?

2.  Luxottica offers expert online chat advice explaining about frames, which are best for which facial shapes, etc. But consumers want opinions. The site lacks the personal advice for how the glasses actually look on those who try them on with the augmented tool.

How Do We Do It?

#1 Put the Augmented Experience On the Website

•  Luxottica will allow customers the option of the augmented try-on experience on the brand’s actual website--as opposed to having to download a separate application in order to access the tool.

•  Customers will be able to create a personal account on the website where they can save snapshots of the the glasses they “tried on.”

KEY BENEFIT: Will lead to increased website traffic, and appease the consumer desire for an easy, convenient purchasing

experience.

#2 Use Social Media to Fill in the Major Missing Link to the Online Purchasing Experience: Personal Opinion Polls

The Process: •  Customers can embed the save photos of their

augmented try-ons onto their social media platforms (Facebook, Instagram, Twitter) as an opinion poll: “How do I look?”

•  If the customer hits a certain number of opinion polls (e.g., 50), they will receive a special coupon for the pair that they choose to purchase.

Social Media Opinion Polls: Key Benefits

•  With in-store shopping, for a customer to get opinions of how glasses look (aside from those from the employee) requires them to bring their friends/families along. Using their social media platforms, they can get hundreds of opinions without having to inconvenience anyone.

•  Fulfills the millennial demand for coupons and discounts.

•  Will allow Luxottica brands to transcend social media and accumulate awareness.

Social Media Opinion Polls: How Do We Promote?

Celebrity Promotion: •  A participating celebrity who is popular on social media trend (Cara

Delevingne, Justin Timberlake, etc.) will select a few pairs of Luxottica glasses they want.

•  They post the photos of their virtual try-ons frames onto their

Instagram/Twitter/Facebook and ask their followers to poll their opinions. → This will encourage people to visit the site and try the virtual reality try on. (See how the pair the celebrity is wearing looks on themselves.)

•  Whichever pair the celebrity ends up choosing--followers who voted for that pair receive a special coupon for Luxottica eyeglasses.

Problem Recognition

Information Search

Evaluation of Alternatives

Purchase Decision

Post-purchase Behavior

Desired Buying Process

Recognition of a need or

want

Searching different business

environments to receive expertise advice

Evaluation of different

products and brands (high

customer involvement)

Positive online

feedback from social networks

and experts leads to

purchase

Expectations satisfied = trust in the

brand

Thank You!