{"id":617,"date":"2015-12-01T22:45:53","date_gmt":"2015-12-02T03:45:53","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/warby-parkers-prescription-for-disrupting-four-eyed-fashion\/"},"modified":"2015-12-06T15:25:15","modified_gmt":"2015-12-06T20:25:15","slug":"warby-parkers-prescription-for-disrupting-four-eyed-fashion","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/warby-parkers-prescription-for-disrupting-four-eyed-fashion\/","title":{"rendered":"Warby Parker\u2019s Prescription for Disrupting \u201cFour-Eyed\u201d Fashion"},"content":{"rendered":"

Today, Warby Parker customers can buy a pair of customized and colorful prescription glasses for $95<\/a>.\u00a0Just four years ago, the average price of a pair of eyeglasses, with frames and lenses, was $253<\/a>. Why should a pair of glasses cost more than an iPhone? Warby Parker\u2019s four founders would argue, simply: they shouldn\u2019t.<\/p>\n

Warby Parker\u00a0has effectively aligned its\u00a0business and operating models, marrying people and products with purpose. Creating affordable yet stylish eyewear, Warby Parker focuses on performance\u00a0and<\/em> philanthropy while beating the competition in both cost and convenience. For each pair of glasses purchased, the company partners with nonprofit Vision Spring<\/a> to provide glasses to a person in need in the developing world. In 2014, Warby Parker gave away its millionth pair of eyeglasses to people living on less than $4\/day \u2014 and, in 2015, closed a Series D round of funding, valuing the retailer at $1.2 billion [i].<\/p>\n

Business Model<\/u>
\nPutting the customer first<\/span><\/strong><\/big>
\nWarby Parker is an eyewear company that sells glasses to consumers. The eyewear industry is dominated by\u00a0Luxxotica, an Italian company that “owns” 80% of global eyewear. Luxxotica controls licenses for the most popular designer brands, including Prada, Burberry, and Michael Kors.\u00a0These frames are often sold in Luxxotica-owned boutiques and stores like Sunglass Hut<\/a> and Lenscrafters\u00a0[ii].<\/p>\n

In a category with limited innovation \u2014 yet artificially high margins \u2014\u00a0Warby Parker\u2019s founders set out to digitally disintermediate Luxxotica, focusing on customers first. Warby Parker designs and sells eyewear that is:<\/p>\n

Affordable<\/span>
\n      \u25cb Glasses priced at less than\u00a0\u00bd the cost of most designer frames \u2014 a price point unattainable for existing competition\u00a0[iii]
\nAttractive<\/span>
\n      \u25cb Wide range<\/a>\u00a0of colors, styles, and materials \u2014 unlike competitors
\nAccessible<\/span>
\n      \u25cb Launched online\u00a0first<\/u>\u00a0\u2192 very\u00a0convenient, unlike competitors
\n      \u25cb Online store\u00a0enabled more effective\u00a0customer marketing and tracking vs. competition
\n      \u25cb Continued focus on\u00a0technology: today,\u00a0Warby Parker\u00a0has\u00a0a\u00a0proprietary retail system<\/a> called \u201cPoint of Everything<\/a>\u201d<\/p>\n

Early digital investment and excellent service proved to be cornerstones\u00a0of Warby Parker\u2019s unique approach. After launch, the\u00a0company hit its first-year sales targets in just three weeks [iv]. The ‘buy a pair, give a pair’ program was\u00a0also well-aligned\u00a0with business objectives. Committing\u00a0to the global community resonates with customers: Nielsen found that 46% of consumers are willing to pay more for products made by companies that give back [v]. Social good\u00a0unlocks value not just for the world, but also Warby Parker\u2019s core business.<\/p>\n

\"warby3\"
Warby Parker frames are $95, where an optical shop can often charge over $500 after baking licensing fees and operating profit into the retail price<\/small><\/i><\/figcaption><\/figure>\n

Operating Model<\/u>
\nSeeing the eyewear industry through a new lens<\/span><\/strong><\/big>
\nWarby Parker is a\u00a0vertically-integrated “lifestyle brand offering value and service [vi]”. The company manages design, manufacturing, and sale of\u00a0all its\u00a0products. This\u00a0approach affords maximum control and\u00a0lower\u00a0costs by avoiding licensing fees, royalties, and optical shop profit.<\/p>\n

Eliminating unnecessary costs makes it possible for Warby Parker to invest in other areas, like service. The retailer developed\u00a0a Home Try-On program<\/a> for customers to pick five pairs and keep them for a trial period. Warby Parker also takes a\u00a0personal approach\u00a0to customer service that strengthens its brand in the process. Employees are empowered to act as\u00a0Warby Parker brand stewards and have produced over 2,000 videos<\/a>\u00a0responding to customer questions. Cost savings re-invested in\u00a0innovative services\u00a0allow the company to drive sales, keep prices competitive, and\u00a0create\u00a0value for customers.<\/p>\n

\"warbyparker3\"
One of Warby Parker’s NYC stores at 121 Greene St. in SoHo<\/small><\/i><\/figcaption><\/figure>   
\"warby
Storefronts are a lucrative part of the business \u2013 the brand plans to expand to 20 stores by the end of 2015<\/small><\/i><\/figcaption><\/figure><\/p>\n

With vertical integration comes tighter distribution control. While its initial business was founded on the web, Warby Parker has recently moved to a hybrid e-commerce and brick-and-mortar<\/a> model, with plans to expand to 20 stores by the end of 2015 [vii]. Warby Parker stores currently sell an average of $3,000\/sq. ft. annually, outperforming Tiffany & Co., Best Buy, Ralph Lauren, and Tumi. Despite rapid initial growth from physical locations, Warby Parker continues to bolster\u00a0its online presence to scale the in-store experience.<\/p>\n

The\u00a0future in-focus<\/span><\/strong><\/big>
\nWarby Parker’s business\u00a0grew 500%+ in its\u00a0first two years. The company’s valuation\u00a0has more than doubled since December 2013\u00a0[viii]. By cutting out middlemen, expanding the distribution model, and staying customer-centric, Warby Parker is uniquely efficient and effective: controlling design, driving profitability, undercutting competitors on cost, and keeping prices low for customers. None of us\u00a0need 20\/20 vision to see that Warby Parker is here to stay.<\/p>\n

Sources<\/strong>
\ni. Wall Street Journal http:\/\/on.wsj.com\/1bYpZT0<\/a>
\nii. INC http:\/\/bit.ly\/1HOMyV0<\/a>
\niii. TIME http:\/\/ti.me\/1yPQD7w<\/a>
\niv. Business Insider http:\/\/read.bi\/1Ovbzd2<\/a>
\nv. Nielsen http:\/\/bit.ly\/1HEPuYc<\/a>
\nvi. Fast Company http:\/\/bit.ly\/1vbb6F1<\/a>
\nvii. Wall Street Journal http:\/\/on.wsj.com\/1HUwFjv<\/a>
\nviii. INC\u00a0http:\/\/bit.ly\/1ttt01v<\/a>
\nxi. Quora http:\/\/bit.ly\/1XGGfxN<\/a>
\nx. Neil Blumenthal (via Quora) http:\/\/bit.ly\/1lCq572<\/a><\/small><\/p>\n","protected":false},"excerpt":{"rendered":"

How a company with $95 glasses changed the $65 billion-per-year eyewear industry \u2014 and gave the gift of sight to those who need it most.<\/p>\n","protected":false},"author":1196,"featured_media":1838,"comment_status":"open","ping_status":"closed","template":"","categories":[170,49,15,16,55,215,152,7],"class_list":["post-617","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-brickandmortar","category-e-commerce","category-fashion","category-retail","category-technology","category-unicorn","category-vertical-integration","category-winner"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/the-tom-challenge-tom-winners-and-losers-assignment\/","yoast_head":"\nWarby Parker\u2019s Prescription for Disrupting \u201cFour-Eyed\u201d Fashion - 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-parkers-prescription-for-disrupting-four-eyed-fashion\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Warby Parker\u2019s Prescription for Disrupting \u201cFour-Eyed\u201d Fashion - 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