{"id":6989,"date":"2015-12-09T23:25:08","date_gmt":"2015-12-10T04:25:08","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/warby-parker-disrupting-the-eyewear-industry\/"},"modified":"2015-12-12T15:30:49","modified_gmt":"2015-12-12T20:30:49","slug":"warby-parker-disrupting-the-eyewear-industry","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/warby-parker-disrupting-the-eyewear-industry\/","title":{"rendered":"Warby Parker: Disrupting the Eyewear Industry"},"content":{"rendered":"

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Wharton classmates Neil Blumenthal, Dave Gilboa, Andrew Hunt, and Jeffrey Raider founded Warby Parker in 2010 to create a solution to a simple problem: high quality, fashionable eyeglasses were too expensive.[i, ii]<\/a><\/p>\n

The company was immediately successful, reaching its first year sales goal within three weeks of launching.\u00a0[iii]<\/a> Warby Parker has since distributed over a million pairs of glasses, with sales over $100 million.[iv]<\/a> Its most recent funding round values the company at $1.2 billion.[v]<\/a><\/p>\n


\nBusiness Model<\/strong><\/p>\n

Warby Parker\u2019s mission is to \u201cto offer designer eyewear at a revolutionary price, while leading the way for socially conscious businesses.\u201d[ii]<\/a> To this end, Warby Parker sells most frames for just $95, including prescription lenses.[iv]<\/a> The company started selling exclusively online and has since opened twenty retail stores.[vi]<\/a><\/p>\n

Established as a bcorporation, Warby Parker works with nonprofits such as Vision Spring to donate one pair of glasses for each pair sold to improve access to glasses worldwide and has already reached one million people in need.[ii, vii, viii]<\/a> \u00a0Warby Parker also supports sustainability by purchasing carbon offset credits and works with Verite to ensure that its factories use\u00a0fair labor practices.[viii]<\/a><\/p>\n


\n<\/strong>Operating Model:<\/strong><\/p>\n

Vertical Integration<\/em><\/p>\n

The founders understood that the high prices were largely due to concentration of power in a single company, Luxottica, which controls 80% of the high-end eyewear market.[ix]<\/a> Luxottica designs and manufactures frames for major brands, such as Chanel, Ralph Lauren, Prada, and Armani, via licensing agreements, and owns brands such as Oakley, Ran-Ban, and Persol. [iv, x]<\/a> \u00a0Luxottica also owns Lenscrafters, Pearl Vision, and Sunglass Hut, as well as\u00a0Eyemed, a major provider of vision insurance.[iv]<\/a><\/p>\n

Warby Parker has created a low cost structure by cutting out the middleman; it designs its own frames, hence avoiding licensing fees, sources its own raw materials, and works directly with manufacturers. \u00a0For example, the company procures acetate from a family-run Italian company and titanium from Japan.[xi]<\/a> Frames are manufactured in China and shipped to the United States through a third party logistics company. Lenses are polished, shaped, and inserted into frames at domestic optical labs. By negotiating directly with its partners, Warby Parker keep costs low, and it enforces strict service level agreements to maintain quality.[xii]<\/a><\/p>\n

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