How Will Retail Look in a Warby Parker Future?
There were lots of good workshops at last week’s Internet Retailer Conference & Exhibition (IRCE), but only one where my jaw actually dropped. The story of Warby Parker, an eyeglass brand/retailer is so "out of the box" that it makes you wonder about the future of long established chain retailers, and some brands as well.
Initially an online-only company, Warby Parker was established in 2010 by a group of college students who did some research and found little to no innovation in the category, but very high margins. Further, they noticed that one company, Luxottica, owns or licenses many retail and fashion eyewear brands, including Ray-Ban, Oakley, LensCrafters, Pearle Vision, Sears Optical, Target Optical and Sunglass Hut. Luxottica does $8 billion in annual revenue, versus their next largest competitor, which does $1.5 billion.
So, Warby Parker cut out the middlemen, took aim at Luxottica and built a company that sells its own brand direct to the public. Warby Parker sources and designs its own product and sells fashionable eyewear mainly online, although they do now have some physical locations, including a flagship store in New York City.
![[Image:Â Warby Parker]](/public/images/discussions/16826/warby-parker-still.jpg)
From a customer’s point of view, Warby Parker offers a number of unique advantages:
- Most glasses are sold for $95 for stylish, premium eyewear, including prescription lenses.
- Shipping and returns are free, even though returned custom product can’t be re-sold.
- Customer service is handled in-house and the staff often makes short videos in reply to customer Tweets, personalizing the service experience.
- Virtual recognition technology allows customers to "try on" glasses online.
- A home try-on program is offered free — the customer gets five frames to try on for five days.
- One pair of glasses is donated to the needy for every pair purchased.
Warby Parker bills itself as a fashion brand, offering value and service with a social mission. It relies on social media for most of its marketing and customers do most of the storytelling. Co-founder and co-CEO Dave Gilboa says Warby Parker’s Net Promoter score is 91, higher than Apple or Zappos. And, he says, there are at least 10 opportunities for user-generated content when buying their glasses.
Issues remain, however. Warby Parker does not accept insurance and, with so few locations, customers have to take their glasses elsewhere for adjustment. Though they have raised $55 million in investment funding, Warby Parker is not releasing financial information, so it’s tough to know whether it is profitable. It has already attracted at least one imitator, though — www.eyefly.com.
- Our Story – Warby Parker
- How We Do It – Warby Parker
- Warby Parker – Facebook
- The Three Things Warby Parker Did to Launch a Successful Lifestyle Brand – TechCrunch
- Warby Parker Opens Retail Store in NYC, With Boston Up Next, Beats Google & Amazon to the Offline Punch – TechCrunch
- How Warby Parker Plans to Take Down the Man, One Pair of Glasses at a Time – Wired
- Warby Parker co-founder Neil Blumenthal dishes on the eyewear company’s sudden success – SmartPlanet
Discussion Questions
Will the Warby Parker model work well enough for them to build a large and profitable eyewear company? Could the Warby Parker model work in other categories?
The answer to both questions is, of course, “Who knows?”
Any number of variables could influence Warby Parker’s eventual fate, but, if the question is, “Does this model have potential?” then the answer is clearly—Yes! What they are doing is digitally disintermediating someone whose large market share allows them to manipulate market pricing, competition and margins to their own advantage. When somebody gets greedy, opportunity starts knocking.
Can the market work in other categories? Of course—assuming the same situation, proper financing, good management, etc., etc.
Warby Parker has often appeared in the list of innovative brands that have successfully bridged the gap between digital retailing and brand loyalty. Through its exceptional customer services policies and fair pricing, customers are drawn to their brand responsibility and ‘doing good’ in the world. The Millennial shoppers want to affect change in the world and Warby Parker’s policy of donating a pair of glasses for each pair sold resonates with today’s young shopper.
This model can certainly work for other categories and brands and it won’t be long before innovative folks will seize the opportunity and propel past long established brands that can’t seem to adapt.
The Warby Parker guys have certainly made their way through the speaker circuit and seems like an old story already, however, they are quite impressive. The fact that they keep on innovating in areas where they had problems to fix suggests that they will ultimately be very successful.
We already know that the model does in fact work in other categories because Zappos has been a success. Given that eyeglasses and shoes are such personal items, it leads me to believe that there are few categories where it would not work, assuming of course that the returns can be handled.
I want to comment on a couple of ‘bits’ here….
The first relates to the question “Could the Warby Parker model work in other categories?” This is (inadvertently) the ultimate trick question of the business world, it comes from the dark side and you should run away as fast as you can. If you want to be a mindless imitator, if you’re hooked on running around looking for “Best Practice” because you and your employees have no original ideas of your own, if you want to play the “me too” game and get no farther than second place…by all means see if you can replicate the WP model. But I guarantee your failure.
I say that with utter confidence because it isn’t “the model” that makes it work—it’s the energy that created the model in the first place. You can follow your grandmother’s famous apple pie recipe to a ‘T’ but it’s not the same. Why? Because you are not your grandmother. Here’s the brutal reality: looking for best practice isn’t the best practice. It’s what cowards do. Warby Parker followed no one, that’s why it’s working. Anyone can replicate the mechanics of an idea, but energy, spirit, culture is always one-of-a-kind.
My second semi-rant is the phrase “out of the box” as in thinking outside of it. First that phrase originated in 1912 – it’s time for a new metaphor. If ‘thinking outside the box’ is such a good idea, why on earth were we in it in the first place? And who put that box there? Hint: the people who run the business.
Usually we want people to think outside the box when we’re losing, panicky and fearful; but it is very hard for innovation to be born out of fear. IMHO as long as you can even SEE a box you’re not thinking outside it. Once the panic is over because you’re “safely” following someone else’s best practice you’re going back in the box because it’s easier to manage people that way. The last thing most “managers” want is an organization filled with thinking, energized, innovative, aligned and initiative-taking people laser-focused on their highest possibilities. True “leaders” on the other hand would do anything for that opportunity.
Let us pray that some big conglomerate doesn’t buy Warby Parker – they’ll be quickly killed off and buried six feet under…(forgive me)…in a box.
I live in a neighborhood that has Neiman Marcus, Saks, Dior, Jimmy Choo, Tiffany, and a number of other upscale retailers. But the recession made bargain shopping chic again, so plenty of my neighbors shop in our Loehmann’s and TJMaxx. Don’t underestimate the demand for great merchandise at good prices.
This is another of example of cutting out the middleman. This model has been successful in the past. Difficulties with this product are fit, adjustments, and repairs. If those hurdles can be overcome, this certainly has possibilities.
Warby Parker is successful not because they sell glasses cheaply—you can find less expensive glasses elsewhere. They’re success comes because of all the things they do to make $95 a bargain: the styles, the service, the experience, the story. When you add it all up as a consumer, now I’m not buying discount eyewear, I’m getting great glasses at a reasonable price.
For others to succeed using this model, they must find the brand attribute that makes them more than a discounter. Otherwise the next guy who offers it cheaper wins.
This business is a serious threat to mall-based specialty retail. It’s already spreading to other categories: True & Co. for bras and Harry’s for shaving supplies.
Warby Parker did not cut out the middle man. In optical, vertical integration of frame and lens manufacturers has led to large margins and room for other business models to gain market share. There are a few multi-billion dollar global conglomerates that control most of the ophthalmic market in the US. Consumers have no idea who they are or how they operate. Imagine if you went to the mall and all of the shoe stores were owned by one company, but still operating under different names. That’s how it is with eyeglasses and sunglasses right now. I have no doubt that one of these large companies will acquire Warby Parker in the future.
Way too little info to know whether this will be profitable for them or not. Cutting out the middleman is always a nice idea, but can attract copycats with deeper pockets to knock you off. I’ve seen many real product innovations from small companies get copied by the big gorillas, killing off the entrepreneur’s dream. Sad, but true.
I tried voting for two categories that might work with the Warby Parker approach, but had to choose one. For the record, my two were fashion and jewelry.
I’ve followed Warby Parker since they opened a festive pop-up store in a yurt in SoHo in late November of 2011. Along with showcasing their stylish and inexpensive eyeglasses, they promoted local creative businesses and partnered with a social cause. This pop-up store was festive and fun and created a lot of publicity, attracted celebrities and millenials, who spread the word on social media.
Now, two years later, Warby Parker has expanded to brick and mortar stores and showrooms along with its highly engaging online store.
A brand moving from online to pop-up to brick and mortar is becoming much more common these days. What makes Warby Parker different is their energy, as mentioned above by Ian Percy. They make shopping for eyeglasses, online or in-store, fun and festive. It becomes an experience to remember, share and repeat. They make you feel good about looking good, and even give you the opportunity to help a social cause, too.
What’s the takeaway? Look closely and learn from Warby Parker’s omnichannel marketing. It really works.
“Warby Parker is not releasing financial information, so it’s tough to know whether it is profitable.”
I wish them well, but it seems premature to be talking about whether/not it will work in other categories when we don’t even know if it works with eyewear: the Promoter score is nice, but comparing to Apple is comparing a pebble to a boulder…no, make that comparing a pebble to the Moon.
There is going to be a lot more fluidity between online and bricks in the years ahead, as the Convergence of Online, Mobile and Bricks (COMB) retail becomes obvious even to the whole world. It is NOT 3 different markets, but one, and Warby Parker is certainly not the first, just particularly well focussed on a vulnerable high margin business. I expect to see a lot more of this and have just circulated a reprint of a Chain Store Age article, “Getting Physical, Online Retailers Move Offline.“
Warby Parker has $80 million of investor money which they’re using to build an incredible brand presence. However, it’s safe to say they’re not making money. Also, while the model is intriguing the final incarnation will be a clicks and mortar hybrid. My guess is they’ll be purchased by the likes of Amazon before long.