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Retail Foresight May 7, 2008

Posted by Brian L. Belen in Academically Speaking, Ramblings.

A number of circumstances conspired to get me fixated upon getting a new pair of eyeglasses. In large part, seeing the wear and tear on my existing pair did the most to convince me that I needed new ones, as did their more recent tendency to slip off if my head were inclined just so. That the optical shops in my neighborhood began their markdowns for Spring also began egging me on, to the point that I just couldn’t resist. Besides, after walking into one such store to have a look around I managed to find just the one that caught my fancy. So now I find myself obsessed — albeit mildly — on a particular pair of Oakley prescription frames.

I’ve owned a similar pair before, so knowing they can be a bit much I set out to find the best deal I could before taking the plunge. Hence, on the day I was bitten by the bug I spent a good amount of time online “window shopping”, scanning through frames of different styles and colors and comparing their prices. Unfortunately, the few that were to my liking weren’t available to order online, nor did the optical shop around the corner have them on hand, though they did offer to order it for me if I wanted. But I wanted to see what they were like for myself, so I decided to make the trip to the Oakley store in SoHo to try my luck (and have a look around, naturally).

Anyone obsessed with Oakleys would have felt like a kid in a candy store at their retail outlet. Not only were there wall to wall displays of all manner of eyewear, but they also offered an “assemble your own” option for people to customize their own lenses, not just in terms of shape of the frame or shade (and polarity) of the lenses but up to and including engraving on the lenses (if that’s your sort of thing). Unfortunately, against such a backdrop their display of prescription frames was nothing short of underwhelming, relegated to a solitary corner of the store amounting to a narrow single-column set of shelves.

They did have the frame I’d settled on, though not in the color I would have wanted, at the standard retail price of $200 even.

I decided to sleep on it first to give me some time to think it over.

On the way back to my apartment, I popped into the optical store that was willing to order it for me to see if they could offer a better deal. Their clerk asked me for the details and promptly picked up the phone and placed a call to Oakley. I could only make out half of the conversation he was having with the sales representative on the other end (“Do you have them available? Uh-huh. Okay. That long?”), from which I figured out that the pair I wanted was backordered. “And how much would it cost?” he asked. Then, “How much should it retail?” Following that exchange, the clerk thanked his counterpart, put down the phone and relayed the information to me.

“So?” I asked.

“Well, the frames are out of stock right now, but they’re expecting a delivery in the next two weeks.

“Oh, and it’ll cost $240.”

At that point I told him I’d think about it, thanked him for the trouble, and headed home.

The entire episode made me think about how shopping is really a matter of asymmetric information. No doubt that the glasses themselves must cost much less than $200 for Oakley to sell them and still make a profit; but consumers don’t know that. Naturally, the optical shop also needs to make some margin from the resale of the frames (albeit with lenses), so they tack on a value-added premium for just that reason. Yet consumers don’t necessarily know that either — unless of course they happen to have asked around at the source and done the math for themselves.

In a perfect world, informed consumers should be able to make use of this information to their advantage by browbeating (i.e., bargaining with) retailers to get what they want at the price they desire. But the world is hardly perfect, and in the end neither the Oakley outlet nor the optical shop made a sale — because I was aware of how much the frames should cost, and they didn’t know that. Score another one for consumer empowerment.

Then again, this also means that I don’t have that stylish new pair of frames I’m still obsessing over. But a hollow victory is a victory nonetheless.



1. Random Travel Notes 7 « BRAIN DRAIN - June 9, 2008

[…] Required. Because of my unrequited obsession over glasses, I found myself at an optical shop where a pair of frames caught my attention. It wasn’t […]

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