Warby Parker was founded by four Wharton MBA students who wanted to offer consumers designer glasses...

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Warby Parker was founded by four Wharton MBA students who wanted to offer consumers designer glasses online at an affordable price. At the time, the eyewear industry was dominated by two companies-Luxottica and Essilor. Luxottica designed, manufactured, and retailed most eyewear frames sold. The company held licenses for many of the most popular brands, such as Ralph Lauren, Ray-Ban, and Oakley, and owned optical retail chains like LensCrafters and Sunglass Hut. Whereas Luxottica specialized in frames, Essilor, the largest optical lens wholesaler in the United States, dominated the lenses portion of the eyewear industry. WARBY PARKER nice to See you 60 Source: Robert K. Chin - Storefronts/Alamy Stock Ph CHAPTER 7 CRAFTING A CUSTOMER VALUE PROPOSITION AND POSITIONING Page 2 of 2 As a result of the two companies' domination of the market, the price for eyeglass frames and lenses was very high. Consumers were paying around $500 for designer glasses that cost $25 to make. In addition, almost all glasses sales were made in brick-and-mortar locations. Warby Parker's founders believed that there was significant opportunity in selling designer glasses at low prices and using the internet to make its sales. Warby Parker was able to set low prices by vertically integrating the company. It began by hiring a full-time glasses designer and two experienced contractors. By creating its own collections of eyeglass frames, Warby Parker avoided licensing fees from designer companies and the need to purchase frames from Luxottica. The company acquired its eyeglass materials from a family-owned Italian producer and outsourced its manufacturing to production factories in China. The production process was completed in optical labs located in New York, where pre-made lenses were carved and fit into the frames. The company's use of pre-made frames, instead of applying prescriptions directly onto frames, reduced costs dramatically. These factors resulted in Warby Parker's ability to provide eyeglasses starting from the low price of $95. Warby Parker designs its glasses to appeal to fashion- forward and trendy customers looking to express their individualism. Each Warby Parker design has its own name, often referencing famous literary or military figures-e.g., the Moriarty, Daisy, and Roosevelt frames. The frames are inspired by retro and vintage glasses but are modernized to create a "timeless" look. In addition, each frame is offered in a wide selection of colors and patterns, ranging from simple tones to more eye-catching stripes and gradients. The majority of Warby Parker's sales are made through its website. Warby Parker has changed the eyeglass market by paving the way for online sales. To incentivize customers who were unfamiliar with the legitimacy of buying glasses online, Warby Parker offered policies such as free shipping, a 30-day "no questions asked" return policy, and its famous home try-on program. Consumers typically try on many pairs of glasses in-store before they make a purchase. Warby Parker has retained this functionality by giving customers the option to try up to five different pairs of eyeglasses, at no additional cost, to see whether they like them. Customers can keep these glasses for a week before sending them back to the company. These customer-friendly policies helped Warby Parker establish its footing in e-commerce and become a giant in the online eyeglass market. Three years after the Warby Parker website launched, the company created a physical retail presence by opening 159 its own retail locations. Warby Parker launched its first store in 2013 for customers who wanted to come in and try on glasses. Warby Parker stores function as showrooms for their glasses. Focusing on the consumer experience, they feature. wide, open walking spaces with easy-to-access shelves displaying the glasses collections. In these brick-and-mortar locations, staff members walk around the store answering questions and helping customers find their favorite pair of glasses. Once customers choose the pair they like, employ- ees quickly place their order on the website. A core component of Warby Parker's mission is "lead- ing the way for socially conscious businesses," and its charitable mission has attracted many Millennials looking to support socially responsible businesses. The most notable of Warby Parker's social programs is its "Buy a Pair, Give a Pair" program, where for every one pair of glasses sold, one pair of glasses is distributed in developing countries. Since the company's beginning, Warby Parker has partnered with VisionSpring, a nonprofit dedicated to providing eyewear to the less fortunate in the developing world. Warby Parker and VisionSpring have employed two basic models to aid the visu- ally impaired. The first is empowering adult men and women in developing countries with the ability to administer eye exams and providing glasses at ultra-low prices. The second is directly providing school-age children with free vision care and glasses. Warby Parker reports that over 50 percent of these recipients are receiving eyeglasses for the first time. As a result of these initiatives, Warby Parker has provided over 4 million pairs of glasses to individuals in over 50 countries. Warby Parker has succeeded in attaining the goals the founders set forth at the company's inception. It received a $1.2 billion valuation just five years after the business was started. Many of its eyeglass styles are still available at $95, the price that Warby Parker set for its glasses at launch. The company has been recognized for revolutionizing the eye- wear industry by offering glasses with quality and style at a great price. Warby Parker has also demonstrated that for- profit companies can sustainably address social challenges. while creating a successful business.40 Questions 1. What is Warby Parker's customer value proposition? Is this value proposition sustainable? 2. What are the points of parity and the points of difference for Warby Parker relative to its competitors? 3. What role does direct-to-consumer distribution play in. Warby Parker's business model? What are the pros and cons of Warby Parker making its products available in traditional eyewear stores? Warby Parker was founded by four Wharton MBA students who wanted to offer consumers designer glasses online at an affordable price. At the time, the eyewear industry was dominated by two companies-Luxottica and Essilor. Luxottica designed, manufactured, and retailed most eyewear frames sold. The company held licenses for many of the most popular brands, such as Ralph Lauren, Ray-Ban, and Oakley, and owned optical retail chains like LensCrafters and Sunglass Hut. Whereas Luxottica specialized in frames, Essilor, the largest optical lens wholesaler in the United States, dominated the lenses portion of the eyewear industry. WARBY PARKER nice to See you 60 Source: Robert K. Chin - Storefronts/Alamy Stock Ph CHAPTER 7 CRAFTING A CUSTOMER VALUE PROPOSITION AND POSITIONING Page 2 of 2 As a result of the two companies' domination of the market, the price for eyeglass frames and lenses was very high. Consumers were paying around $500 for designer glasses that cost $25 to make. In addition, almost all glasses sales were made in brick-and-mortar locations. Warby Parker's founders believed that there was significant opportunity in selling designer glasses at low prices and using the internet to make its sales. Warby Parker was able to set low prices by vertically integrating the company. It began by hiring a full-time glasses designer and two experienced contractors. By creating its own collections of eyeglass frames, Warby Parker avoided licensing fees from designer companies and the need to purchase frames from Luxottica. The company acquired its eyeglass materials from a family-owned Italian producer and outsourced its manufacturing to production factories in China. The production process was completed in optical labs located in New York, where pre-made lenses were carved and fit into the frames. The company's use of pre-made frames, instead of applying prescriptions directly onto frames, reduced costs dramatically. These factors resulted in Warby Parker's ability to provide eyeglasses starting from the low price of $95. Warby Parker designs its glasses to appeal to fashion- forward and trendy customers looking to express their individualism. Each Warby Parker design has its own name, often referencing famous literary or military figures-e.g., the Moriarty, Daisy, and Roosevelt frames. The frames are inspired by retro and vintage glasses but are modernized to create a "timeless" look. In addition, each frame is offered in a wide selection of colors and patterns, ranging from simple tones to more eye-catching stripes and gradients. The majority of Warby Parker's sales are made through its website. Warby Parker has changed the eyeglass market by paving the way for online sales. To incentivize customers who were unfamiliar with the legitimacy of buying glasses online, Warby Parker offered policies such as free shipping, a 30-day "no questions asked" return policy, and its famous home try-on program. Consumers typically try on many pairs of glasses in-store before they make a purchase. Warby Parker has retained this functionality by giving customers the option to try up to five different pairs of eyeglasses, at no additional cost, to see whether they like them. Customers can keep these glasses for a week before sending them back to the company. These customer-friendly policies helped Warby Parker establish its footing in e-commerce and become a giant in the online eyeglass market. Three years after the Warby Parker website launched, the company created a physical retail presence by opening 159 its own retail locations. Warby Parker launched its first store in 2013 for customers who wanted to come in and try on glasses. Warby Parker stores function as showrooms for their glasses. Focusing on the consumer experience, they feature. wide, open walking spaces with easy-to-access shelves displaying the glasses collections. In these brick-and-mortar locations, staff members walk around the store answering questions and helping customers find their favorite pair of glasses. Once customers choose the pair they like, employ- ees quickly place their order on the website. A core component of Warby Parker's mission is "lead- ing the way for socially conscious businesses," and its charitable mission has attracted many Millennials looking to support socially responsible businesses. The most notable of Warby Parker's social programs is its "Buy a Pair, Give a Pair" program, where for every one pair of glasses sold, one pair of glasses is distributed in developing countries. Since the company's beginning, Warby Parker has partnered with VisionSpring, a nonprofit dedicated to providing eyewear to the less fortunate in the developing world. Warby Parker and VisionSpring have employed two basic models to aid the visu- ally impaired. The first is empowering adult men and women in developing countries with the ability to administer eye exams and providing glasses at ultra-low prices. The second is directly providing school-age children with free vision care and glasses. Warby Parker reports that over 50 percent of these recipients are receiving eyeglasses for the first time. As a result of these initiatives, Warby Parker has provided over 4 million pairs of glasses to individuals in over 50 countries. Warby Parker has succeeded in attaining the goals the founders set forth at the company's inception. It received a $1.2 billion valuation just five years after the business was started. Many of its eyeglass styles are still available at $95, the price that Warby Parker set for its glasses at launch. The company has been recognized for revolutionizing the eye- wear industry by offering glasses with quality and style at a great price. Warby Parker has also demonstrated that for- profit companies can sustainably address social challenges. while creating a successful business.40 Questions 1. What is Warby Parker's customer value proposition? Is this value proposition sustainable? 2. What are the points of parity and the points of difference for Warby Parker relative to its competitors? 3. What role does direct-to-consumer distribution play in. Warby Parker's business model? What are the pros and cons of Warby Parker making its products available in traditional eyewear stores?

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