5Q: Roger Hardy, founder and CEO of Coastal Contacts

At a time when many Canadian retailers are turning to the web, corrective eyewear e-tailer Coastal Contacts is the contrarian.
 
Earlier this year, the company opened two physical stores in Vancouver and a third store opened in Toronto's Queen Street West neighbourhood on Black Friday. Founder and Chief Executive Roger Hardy is betting the touch-and-feel approach is a perfect complement to its online business, which operates as clearlycontacts.ca in Canada.
 
Initially, the idea was supposed to be an experiment that took surveys, polls and focus groups on contact lenses and glasses to the next level, enhancing an already flourishing e-commerce business that began in 2000, which now has operations in North America, Europe and Australia.
 
Hardy sees the move to brick-and-mortar locations as a way of fortifying their customer service in an increasingly cutthroat industry fixated on omni-channel retailing or seamless shopping experience in-store, online or via mobile device.
 
By Canadian standards, Hardy got into e-retailing early and can offer unique insightsas competition in the retail industry here heats up. U.S. entrants like Target, Nordstrom and Saks are expected to rattle the establishment, making the desire by retailers to engage consumers through all venues a high priority, says Hardy.
 
How did you get into the eyewear business?

I went to work briefly for a contact lens company right around the time when the Internet was upticking. The first thing I saw when I got into the business was the complete inefficiency of the model and, like many others, decided to start a website and break the cartel as I saw it was an interesting opportunity.
 
What do you mean inefficiencies?

You have an office where you're trying to manage patients, where you have an eye exam and you're also a shipper and receiver, a merchandiser and a retailer. Trying to do all these things well in what's really a one-person office. You've got an eye doctor working the front desk. It's not an efficient model. You don't capture any of the benefits of scale.
 
You've opened physical locations. Why did you go this route?

Really it's just having seen the success of companies like Apple, companies like HP that are looking to engage with their customers. Our vision is to make sure we're serving customers how they want to be served and that's where the store gets created. We're also employing optometrists in our stores that can do eye exams, who can help people with measurements and adjustments. That helps complete the circle for customers.
 
Looking back, what would you say has been the cornerstone of your online sales strategy?

We started fairly late to the Internet game. But when I think back about why we've been successful in contact lenses there's really one reason: we over-invested, hyper-invested in customer service. So we made sure we had the biggest inventory. If a customer ordered we would have their product in stock and we would ship it out to them that day and they would get it the next day.
 
How important is it to focus on the customer these days?

People want savings and convenience. The convenience one is important. You can order a pair of eyeglasses online in about four minutes and the next morning they're at your door as opposed to getting in your car, driving somewhere, booking an appointment, waiting around. You know, who's got two hours to go buy glasses versus four minutes.
 
Canada's retail industry is currently focused on omni-channel retailing. Can you give me a sense of what consumers want?

We can call it omni-channel, but the simple truth is that consumers don't really care if you're omni-channel or not. They want to make sure that when they walk into your store, when they go online, on their desktop, when they pull out their mobile to check their order, that everything works seamlessly and is integrated in a thoughtful way.
 
What's the outlook then?

I think the next year is going to be super dynamic in Canada. You've got some tier one e-tailer/retailers coming. You've got Amazon coming to Canada. They've already launched their dry-packaged goods grocery business. This is going to dramatically affect the landscape for any grocery retailer. You have tier one retailers like Nordstrom that really understand customers and serving customers in a top-of-the-food chain kind of way. They've been working hard at making sure they are an omni-channel retailer. Frankly, I look at some Canadian retailers and they are in for a shock to their system if they don't get moving very quickly.
 
Who is exposed?

Any retailer who has not understood their technology platform. [This] is really what the whole game is about in the next 24 months. If they thought it was going to be the status quo and that they're competitive advantage was going to come from something other than technology, they are super exposed.
 
What does everybody mean by 'seamless experience'?

Recently, my wife and I were in Phoenix and we went into the Nordstrom as my wife is definitely prone to do. As we were checking out, they gave us a screen. We enter our e-mail and, boom, it recognizes us. It shows me who I am, it's got all my transaction history, it pulls it up. I look at that and I think, you know, wow, they just nailed what everybody's trying to do.
 
Shipping is often seen as a hindrance in Canada. How do you create a shipping model that works?

For us, we try to be fairly transparent. We try to get our prices as low as we can and win on the scale battle. If we sell $160-million worth of contact lenses next year that's more than every optical shop in Canada. On average, those competitors are selling three to five orders a day and we're selling thousands. So we're trying to benefit from economies of scale in our product pricing.
 
On payment and processing, are there any great technologies out there?

That's dynamic as well. You're going to keep seeing a lot of interesting things in terms of payment and processing. It's clear Amazon is trying to get into the payments game, PayPal, eBay.
 
But what's a great recipe?

Bitcoin is attracting a lot of attention. I don't know if that's the perfect recipe yet, but there are a number of alternative payment methods that are going to increase in popularity over the next decade. There are a number of companies thinking about how to make payment easier such as Google Wallet, Amazon's wallet, all these big guys are all trying to show up there. I don't think we've seen a killer app yet, but it's definitely all about what makes it easier for customers.
 
You recently invested in shoeme.ca. What sectors of online shopping do you see growing in demand?

I think there's always a space for a fashion-type brand. A lot of Canadians have lacked this access to selection when we're speaking specifically about shoes. Shoeme is really a technology platform. It's much more than a just shoe retailer it's really a technology platform that is going to serve customers well in areas where they haven't been served well. That's the opportunity.
 
*This interview has been edited and condensed