{"id":5151,"date":"2015-12-09T17:35:36","date_gmt":"2015-12-09T22:35:36","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/warby-parker-affordable-fashion-thats-easy-to-see\/"},"modified":"2015-12-09T17:35:36","modified_gmt":"2015-12-09T22:35:36","slug":"warby-parker-affordable-fashion-thats-easy-to-see","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/warby-parker-affordable-fashion-thats-easy-to-see\/","title":{"rendered":"Warby Parker: Affordable Fashion That\u2019s Easy to See"},"content":{"rendered":"

Founded in 2010, Warby Parker has disrupted the premium eyewear industry, a $13B segment of the $36B global frames and sunglasses market.(1)<\/sup>\u00a0 One conglomerate \u2013 Luxottica \u2013 dominates the segment, with ~$8.5B of annual revenue at a 20% operating margin, and control of many of the world\u2019s major eyewear brands, including Lenscrafters, Sunglass Hut, Ray-Ban, and Oakley.(2)<\/sup>\u00a0 Yet Warby Parker has been able to carve out its niche as a low cost, high fashion competitor with a $1.2B valuation \u2013 and its innovative operating model has been one of the keys to its success.(3)<\/sup><\/p>\n

 <\/p>\n

Business model: Designer eyewear at a revolutionary price<\/strong><\/p>\n

Lower price<\/u><\/em>: Warby Parker recognized that Luxottica was employing a skimming strategy, keeping prices (and margins) artificially high.\u00a0 The concept beyond Warby Parker\u2019s philosophy was simple: Fashionable glasses don\u2019t need to cost hundreds of dollars.\u00a0 At an entry price point of $95, Warby enabled fashion-conscious consumers to purchase designer glasses at a fraction of the price of designer alternatives.<\/p>\n

Easy and fun<\/u><\/em>: At a lower price point, Warby Parker\u2019s brand couldn\u2019t \u201cout-luxury\u201d Luxottica\u2019s, but it could \u201cout-fun\u201d it.\u00a0 Easy and fun are the critical ingredients to the company\u2019s style of premium.\u00a0 Buying glasses, says the company\u2019s website, \u201cshould leave you happy and good-looking.\u201d (4)<\/sup><\/p>\n

Social mission<\/u><\/em>: The social mission is the third tenant of the company\u2019s strategy.\u00a0 For every pair of glasses sold, Warby Parker ensures a pair is distributed to one of the one billion people worldwide who lack access to glasses.(5)<\/sup><\/p>\n

 <\/p>\n

Operating model: True to the brand<\/strong>\u00a0<\/strong><\/p>\n

Low cost production and distribution<\/u><\/em>: First and foremost, Warby Parker needed a lower cost operating model to enable lower prices. There are (at least) two critical building blocks: First, the company designs its own eyewear, cutting out licensing fees.\u00a0 This vertical integration is important, but the bigger innovation is in its direct to consumer distribution model. \u00a0Warby Parker originally sold glasses exclusively online, cutting out the expense of building a brick & mortar retail presence (or paying a retailer to do so). \u00a0This was a major innovate risk in a market that at the time sold less than 1% of prescription eyeglasses online.(6)<\/sup>\u00a0 Today, Warby Parker has a limited brick & mortar store presence, but still controls its distribution.<\/p>\n

The customer experience – easy and fun<\/u>: <\/em>The company\u2019s customer-facing policies make the shopping experience easier and more fun.\u00a0 The company offers a home try on program in which a shopper can request 5 frames, then keep them for 5 days before returning them \u2013 all for free, shipping included.\u00a0 If the customer is having trouble deciding, she \/ he can actually call a Warby Parker \u201cpersonal stylist\u201d and ask for help.\u00a0 The company offers free returns (within 30 days) and will even reimburse customers if they need to get their frames adjusted.(7)<\/sup><\/p>\n

Human capital and culture \u2013 on brand<\/u><\/em>: Warby Parker aligned its corporate culture with its commercial brand.\u00a0 The company\u2019s second operating principle (referred to playfully as \u201cground rules\u201d on its website) is \u201cto create an environment where employees can think big, have fun, and do good.\u201d(8)<\/sup>\u00a0 Headquartered in the (hip) SoHo neighborhood of New York, dress is casual and (free) food is available to employees.\u00a0 It took a page out of Google and Facebook\u2019s playbook by using its brand and culture to attract young graduates into roles that they wouldn\u2019t necessarily take at other companies.\u00a0 As a result, executive assistants and customer experience representatives at Warby Parker are graduates of top universities.<\/p>\n

Limits on scope \u2013 partner for the mission<\/u><\/em>: A good operating model must also know its limits.\u00a0 Warby Parker does not distribute glasses in developing countries itself; instead it partners with VisionSpring, a company that trains low-income men and women in the developing world to sell glasses at \u201cultra-affordable\u201d prices. (9)<\/sup>\u00a0 The program is aligned with Warby Parker\u2019s image as a fashion brand and cultural ethos \u2013 instead of giving away glasses, selling the glasses forces VisionSpring to offer glasses that \u201cfit with local styles, look good, work well, and make the wearer feel incredible.\u201d(10)<\/sup><\/p>\n

 <\/p>\n

Conclusion: Operating model alignment is important\u2026but a good idea helps too<\/strong><\/p>\n

Warby Parker\u2019s operating model and business strategy are near flawlessly aligned, but it doesn\u2019t hurt that the company is also targeting an industry ripe for disruption \u2013 a dominant player skimming the market and maintaining 20% operating margins, a growing category, and a product in which quality is largely subjective, in an environment in which affordable fashion is in style.<\/p>\n

 <\/p>\n

 <\/p>\n

Sources<\/u><\/em>:<\/p>\n

(1)\u00a0http:\/\/www.businessoffashion.com\/articles\/intelligence\/a-closer-look-at-the-13-billion-premium-eyewear-market<\/a>. Accessed December 8th<\/sup>, 2015.<\/p>\n

(2)\u00a0http:\/\/www.luxottica.com\/sites\/luxottica.com\/files\/2015_03_02_-_luxottica_-_fy14_results_-_press_release.pdf<\/a>. Accessed December 8th<\/sup>, 2015.<\/p>\n

(3)\u00a0http:\/\/blogs.wsj.com\/digits\/2015\/04\/30\/eyeglass-retailer-warby-parker-valued-at-1-2-billion\/<\/a>. Accessed December 8th<\/sup>, 2015.<\/p>\n

(4)\u00a0warbyparker.com<\/a>. Accessed December 8th<\/sup>, 2015.<\/p>\n

(5) Ibid.<\/p>\n

(6)\u00a0http:\/\/www.cbsnews.com\/news\/get-eyeglasses-online-for-quarter-of-the-price\/<\/a>. Accessed December 8th<\/sup>, 2015.<\/p>\n

(7)\u00a0warbyparker.com<\/a>. Accessed December 8th<\/sup>, 2015.<\/p>\n

(8) Ibid.<\/p>\n

(9) Ibid.<\/p>\n

(10) Ibid.<\/p>\n","protected":false},"excerpt":{"rendered":"

How Warby Parker's Operating Model has Enabled It's Disruption of the Eyewear Market<\/p>\n","protected":false},"author":987,"featured_media":5152,"comment_status":"open","ping_status":"closed","template":"","categories":[],"class_list":["post-5151","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/the-tom-challenge-tom-winners-and-losers-assignment\/","yoast_head":"\nWarby Parker: Affordable Fashion That\u2019s Easy to See - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/warby-parker-affordable-fashion-thats-easy-to-see\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Warby Parker: Affordable Fashion That\u2019s Easy to See - 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