INNOVATION & CULTURE at ClearlyContacts.ca

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1 INNOVATION & CULTURE at ClearlyContacts.ca

2 THE RIGHT PLACE TO BE

3 PEOPLE! People build companies!

4 INNOVATION Why is innovation important? Why should Human Resource professionals care?

5 INNOVATION Lets start out by talking about some industries that have faced dynamic and revolutionary innovation.

6 INNOVATION How many are running one of these state of the art systems?

7 INNOVATION How many are running one of these state of the art systems?

8 INNOVATION How about video games and home entertainment

9 INNOVATION How about video games and home entertainment Who is running one of these state of the art systems?

10 INNOVATION Who is using this state of the art camera?

11 INNOVATION Who is using this state of the art camera?

12 INNOVATION Who is using this state of the art computer?

13 INNOVATION Who is using this state of the art computer?

14 INNOVATION How many of us are running around with this music player?

15 INNOVATION How many of us are running around with this music player?

16 INNOVATION Its always a good time to make it a movie night Or is it

17 INNOVATION Its always a good time to make it a movie night Or is it

18 WHAT DO ALL THOSE COMPANIES HAVE IN COMMON?

19 WHAT DO ALL THOSE COMPANIES HAVE IN COMMON? All had greater than 90 % of their categories, The categories were all re named after them You know you OWN the category when they name it after you I still ask my kids where is my Walkman

20 THE ISSUE ISN'T UNIQUE TO THESE GREAT COMPANIES Jim Collins famous work of 2001 Good to Great featured 11 companies Focus on what made them great, enduring brands Of those original 11-5 no longer exist: - Circuit City GONE - Gillette sold to P&G and market value declined by $5 billion - Fannie Mae Boom. - Wells Fargo market cap decline described as Horrific

21 LEADING INDICATOR ON CHANGE Patent Applications The number of patents issued over last 50 years, Proxy for innovation

22 LEADING INDICATOR ON CHANGE Patent Applications The number of patents issued over last 50 years, Proxy for innovation exponential growth

23 THE ACCELERATION OF CHANGE

24 INNOVATION Why is innovation important? The competitive environment has never been more challenging: - Global competition - Technology - Internet - Outsourcing Have all combined to expand the number of competitors and allow them to respond ever more quickly to your companies offering

25 INNOVATION Why are we talking about the importance of innovation in companies? Innovation doesn t just happen automatically. You need to develop a culture within your organization that fully engages the hearts/minds/passions of everyone.

26 CULTURE OF INNOVATION Why should Human Resource Professionals Care? Human Resources plays a key role in leading the organization to develop and implement - Key business processes - Management practices and habits that not only foster innovation but drive it

27 OUR CULTURE at ClearlyContacts.ca The Clearly Contacts Story

28 Innefficient/Non Customer Centric Industry As an employee who worked first in logistics and then for a major contact lens manufacturer who sold to retail optical stores and doctors, I saw first hand: How inefficient the retail optical industry was How a small group of companies had a monopoly on the industry How the consumer was being poorly served How eyeglasses and contact lenses were being marked up 5-10x the actual cost of the product

29 OUR BUSINESS PREMISE Single Business Premise

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31 COMPANY OVERVIEW World s Leading Online Eyewear Company ClearlyContacts.ca designs, produces and retails the largest selection of eyeglasses and contact lenses on the Internet ClearlyContacts.ca services customers in more than 150 countries through the Coastal family of websites including sites in the US, Canada, Japan, Germany, Australia, United Kingdom, Scandinavia and Brazil Online leader in most markets

32 COMPANY OVERVIEW

33 REWARDS OF AN INNOVATIVE CULTURE Eyeglasses Contact Lenses $138.9 $9.1 $151.9 $19.1 $182.7 $39.2 $196.1 $47.9 $204.1 $51.5 $67.5 $81.0 $102.2 $118.8 $129.8 $132.8 $143.5 $148.2 $152.6 $31.2 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 $ in CAD millions. Jan-13

34 ADVANTAGES OF BUYING ONLINE Selection Convenience Price

35 LEADING DESIGNERS & EXCLUSIVE BRANDS Over 2,000 frames styles including leading designers and exclusive brands Top ten selling frames are exclusive brands Over $21 million in inventory to ensure speed of delivery

36 EXCLUSIVE CONTACT LENS PRODUCTS Same high quality lenses as the leading brands for half the price Highest UVA and UVB protection available on the market Blue handling tint which allows for effortless insertion and handling

37 QUALITY EYEGLASS MANUFACTURING ClearlyContacts.ca eyeglasses are manufactured in the US and Canada ClearlyContacts.ca owns and operates one of the most technologically advanced labs in North America Vertical integration enables ClearlyContacts.ca to ensure high quality and removes costs to deliver more value to customers

38 COASTAL vs. TRADITIONAL OPTICAL RETAILERS Traditional Optical Retailer Manufacturer ClearlyContacts.ca Brands Other Brand Makers/Suppliers Distributor Optical Labs VS. ClearlyContacts.ca Optical Retailer Consumer Consumer Customer Cost: $250 - $350 Customer Cost: $100 - $150 Vertical integration enables ClearlyContacts.ca to offer a stronger value proposition to consumers versus traditional eyeglasses retailers

39 SPEED OF SERVICE ADVANTAGE By manufacturing in North America, ClearlyContacts.ca is able to produce and deliver glasses faster than most optical retailers In-house eyeglass manufacturing lab operates 24/7

40 ONLINE SHOPPING TOOLS ENHANCE CUSTOMER EXPERIENCE Perfect Fit Tool: by entering the frame measurements listed on your current glasses, ClearlyContacts.ca can quickly show the frames in its selection that will fit you best Virtual Try On View: upload your picture & try on several pairs at once and ask for feedback on Facebook Access: Website designed to accommodate PC, mobile & tablet users

41 THE BEST GUARANTEE IN THE OPTICAL INDUSTRY ClearlyContacts.ca is so confident of its quality, it offers the best Guarantee in the industry Day Return Policy - 100% Money Back Guarantee Customer Satisfaction is extremely high - Average rating of 9 (on a 10 pt. scale) Over 1 million fans on Facebook

42 INNOVATION FOCUSED ON SERVING CUSTOMER NEEDS Customer Needs Value Same products discounted up to 50% for eyeglasses & up to 20% for contact lenses versus typical traditional retailers Service Selection Superior customer service Free shipping on virtually all products No hassle 366 day return policy ~15,000 contact lens SKUs ~1,800 eyeglasses Quality Top quality branded & private-label selections manufactured in state-of-the-art facilities Turnaround Time Typically shipped same day of order Average 24 hour turnaround on eyeglasses orders

43 STRONG VALUE PROPOSITION = HIGH CUSTOMER SATISFACTION Simple Online Ordering Great Price Broad Selection Rapid Turnaround Exceptional Customer Service Free Delivery¹ No Hassle Returns Strong Value Proposition Net Promoter Score (NPS)² ClearlyContacts.ca³ 77% Costco 57% Contacts Independent ECPs Sam's Club & Walmart Lenscrafters/Pearle Vision 33% 32% 24% 51% ClearlyContacts.ca NPS Score at 77%³ Sears Optical 24% Other Optical Retailers 14% Target Optical 6% 0% 20% 40% 60% 80% 100% 1) Free delivery on virtually all products. 2) Source: Bain & Company Consumer Survey, Competitor data as of Oct 2010 and is the most current data publically available. 3) ClearlyContacts.ca NPS data calculated as a three month trailing average as of Jan 2013.

44 ClearlyContacts.ca STORY

45 SO HOW DID ALL THIS HAPPEN?

46 CULTURE OF INNOVATION

47 BHAG 20 million people impacted by the year 2020

48 BRAND PROMISE THE BETTER WAY TO BUY EYEWEAR

49 CORE VALUES Values by which we run the company by Innovation Agents of Change Bias to Action Hard Working Do More with Less Team Coastal Do some good

50 DO SOME GOOD Recent Change the View glasses distribution in the Downtown Eastside

51 HABITS AND PRACTICES Meeting Routine: Quarterly Theme and Objectives Weekly Meetings - Management Team - Marketing Daily Stand up Meeting

52 HIRING PRACTICES Influence of Core Values Team decision Diversity of ideas/backgrounds

53 EMPLOYEE ENGAGEMENT Employee satisfaction survey Employee recognition Start, Stop and Keep list

54 VITAL ROLE HUMAN RESOURCES PLAYS Celebrating and re-enforcing Core Values Hiring and retaining the right people Employee satisfaction survey Training Team events Management Practices

55 STAY CONNECTED WITH YOUR CUSTOMER We re constantly surveying and listening to our employees and customers to find out how we can better service them Examples: - Physical Retail Store Robson street location - Mobile Apps - Free cleaning and repair kit - Giving a pair with every pair we sell - Employee vision plans

56 FUTURE GROWTH OPPORTUNITIES Licenses, Partnerships & Vision Plans Examples Exclusive Licenses Leverage manufacturing, distribution & marketing expertise to drive value for Coastal & licensors Alyssa Milano Strategic Partnerships Develop preferred relationships Corporate customers Managed care organizations Celebrities Flo Rida Alicia Keys Employee Vision Plans Better Vision Benefits for employee + Lower Costs for employers BC HRMA Vision Plan Funded and Self Funded Plans

57 BC HRMA No Cost Vision Plan Ideal for companies with no vision benefits today Initial Benefit Ongoing Benefits BC HRMA Plan Initial Free pair of designer eyeglasses For all employees and their dependents Exclusive discounts/savings on: Additional pairs of eyeglasses Designer sunglasses Contact lenses Note: this is on top of ClearlyContacts.ca already lower prices Other Benefits Free shipping and handling Free 366 day return policy Cost NO Cost

58 FUNDED PLAN More Benefits At Lower Cost Core Benefit Traditional Plan Part of a pair of glasses $200 allowance Clearly Contacts Plan Complete pair of designer glasses Benefit Frequency Every 2 years Every year Other Benefits N/A Free lens coatings Free shipping Free 366 day return policy 50% off additional pairs of glasses 25% off designer sunglasses Use at Robson store Alternative Benefit N/A Option to choose any optical provider Cost 20 25% less than traditional plans

59 CONCLUSION There is only one constant today Change! Innovation will keep your business relevant Become a Change Agent at your company - Bring forward new ideas, programs and innovations that better serve your employees and customers Join us in working together to make BC the world s home of leading, innovative companies and ideas

60 CONCLUSION FREE DESIGNER EYEGLASSES

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62 What are key insights derived from this session and how can you implement them in your workplace?