Warby Parker: An Online Eyewear Company With a Great Vision
Can a business scale, be profitable, and do good in the world— without charging customers a premium? Yes, and Warby Parker is the perfect example.
Warby Parker (JAND Inc.) is an innovative online eyewear company headquartered in New York City. The company sells eyewear (prescription glasses, sunglasses, and contacts) online and through brick-and-mortar stores across the United States and Canada. The company's innovative "Home-Try-On program" is one of the main reasons behind its success.
Warby Parker launched online exclusively in 2010. The initial success led to the opening of its first physical outlet in 2013 in Manhattan.
The company was founded in Philadelphia by four enterprising MBA students in the Venture Initiation Program of the Wharton School of the University of Pennsylvania.
The founders Neil Blumenthal, Andrew Hunt (Andy), David Gilboa (Dave), and Jeffrey Raider (Jeff) made some unique decisions that set their company apart in the eyewear market.
Continue reading about the story that drew interested customers to the Warby Parker website and stores in droves.
Every Idea Starts with a Problem
Every breakthrough idea begins with solving a problem. Warby Parker began because of the simple problem that glasses were too expensive. Neil Blumenthal came up with the idea of starting an online company to sell prescription glasses at an affordable price.
Neil conceived the idea in 2008, during his student days at Wharton, after losing his prescription eyeglasses during a backpacking trip. He spent the entire first semester of his grad school without glasses as he wasn't ready to spend on a new pair. Like many others, he felt buying a pair of glasses was too expensive and visiting an eyeglass store was inconvenient.
It wasn't just Neil who faced the unfortunate occurrence with his pair of glasses. Dave had forgotten his pair of $700 glasses in an airplane seat pocket a couple of weeks before beginning grad school. Similarly, Jeff had a worn-out pair of glasses that could use a replacement. Witnessing all this, Andy wondered: Why wasn't anybody selling eyewear online?
His pondering over the issue was legit. In the winter of 2008, Zappos was already demonstrating you could sell shoes online. That same year, Blue Nile was into selling rings and fine jewelry online. These examples surprised everyone who thought successfully selling such items online was impossible.
Before grad school, Neil ran a non-profit social enterprise to train low-income women to begin their own businesses. He was also involved in giving vision tests and selling glasses in their communities. His idea of selling eyewear online was born in the middle of the night with full conviction, backed by some experience in the industry.
Neil's excitement and faith in the idea built up fast. To get things on a roll, he wasted no time contacting his MBA batchmates, Andrew, David, and Jeffrey, to tell them about the business venture he wanted them to join.
The problem was simple and real. The solution was practical. So, the four co-founders immediately started working on their plan. Beaming excitedly, they started taking classes they thought could be helpful as they explored their business idea. Business school was the perfect environment.
Why the Name Warby Parker?
The name "Warby Parker" was conceived by combining the two characters (Warby Pepper and Zagg Parker) that appear in a journal by author Jack Kerouac. Warby Parker's co-founders were impressed by Kerouac and his two characters because they inspired them to break free from the shackles of social pressure and embark on their adventure.
In line with the above inspiration, in their new adventure - Warby Parker, the co-founders desired that their customers get the highest quality products conveniently, at a value that made sense. They also wanted to infuse the rebellious spirit of Kerouac's characters into their company culture.
Poised to Launch
In Spring 2010, after graduating with their MBA degrees, the co-founders planned to launch Warby Parker and its website around the same time as the release of an article by GQ magazine that covered Warby Parker.
The famous men's magazine published the article in mid-February 2010, describing Warby Parker with the catchy headline "The Netflix of Eyewear."
The article aptly defined Warby Parker as the "upstart glasses designers" that have made buying glasses easier and more affordable. Timing the website's launch with the article's release proved to be a successful marketing move. As a result, the launch of Warby Parker became as special as the business idea itself.
Warby Parker's revolutionary process of ordering eyewear online validates GQ's Netflix analogy. Once you fall in love with a frame featured on the website, you'd want to try it on. The company sends you five shortlisted frames for five days for a free trial to take care of that.
Then, in the comfort of your home, you select the frame you like and then send them all back (shipping charges borne by Warby Parker). The smooth ordering process ends when you receive back the frame of your choice fitted with the prescription lenses.
Panic and Opportunity
The successful launch led interested customers to be attracted to the new site in great numbers. The sudden, overwhelming response resulted in a waitlist for the eyewear reaching 20,000 people. What blew everyone's minds was that the company achieved its annual sales target in the first three weeks.
The waitlist caused panic since the website didn't have a "sold-out" functionality. However, where there was panic, the co-founders found an inherent opportunity. The opportunity: A chance to offer great customer service through personalized emails apologizing for the delay.
Warby Parker’s Secret Sauce
The company's secret sauce is focusing on social impact while driving sales through a combination of online and in-store experiences to offer a distinct customer experience.
The original business model made Warby Parker a purely digital-format company. However, Warby Parker's brick-and-mortar stores were turning out to be more profitable than the online model. Also, the online penetration of the eyewear market remains low.
The Warby Parker Advantage
The biggest advantage of Warby Parker is that they have plenty of touchpoints with their customers. Being a direct-to-consumer company makes it easier to ensure every customer is surveyed and sufficient feedback is received. As a result, customer experiences and the shopping process get enhanced.
Furthermore, the company leverages technology to solve customer problems. For example, one of the metrics they closely track is the net promoter score (NPS), which is a customer satisfaction metric.
Through NPS analysis, the company discovered two main areas of customer frustration. The first was finding the perfect fitting frame through their virtual try-on technology. The second was getting new prescriptions, which they managed through the downloadable app they developed called 'prescription check.'
Warby Parker's commitment to giving back is another major advantage of shopping or working there. Through their "Buy a Pair, Give a Pair" program, the founders positively impact the world while keeping themselves motivated.
The impact is created by donating free glasses to the over a billion people in the developing world that don't have glasses but need them. The number one reason people come to work for Warby Parker is because of the "Buy a Pair, Give a Pair" program. As of February 2022, Warby Parker has distributed 10 million pairs of glasses through the program.
Warby Parker Today
Cheap-to-start businesses like Warby Parker can be expensive to market. That's the reason many fail. On the other hand, Warby Parker's success led them to go public on Sept 29, 2021, via a direct listing.
Warby Parker's success lies in its unique model. The company offers high-quality prescription frames at just $95. They also let consumers try five frames at home before they buy.
The company's business model allows it to pass cost savings to customers by offering such home convenience. A chunk of that cost savings is due to the absence of middlemen.
No middlemen mean no corresponding licensing fees for brand name eyewear and no costs related to placing the products in major retailers. Instead, the company has in-house designers that work directly with manufacturers to manufacture the materials and assemble the glasses.
However, cost savings alone doesn't result in profitability for Warby Parker. To pay for its expenses over the years, Warby Parker has raised $535.5 million in VC funding since 2011. In 2020, when many consumers shifted online, Warby Parker spent an average of $40 per customer on a mix of advertising and home try-ons.
In 2022, things are a bit different than initially envisioned by the company. Today, a sale online is as vital as an in-store sale. Thus, there's an evident shift from being an online-only brand initially.
Today, to be "The Warby Parker Of" means to be an online disrupter of a well-established pre-existing category. Owing to that, the company has witnessed rapid progression and expansion.
At the end of 2021, the total number of Warby Parker stores reached 160 in the US and Canada. With each store acting as a billboard for the brand, the average annual sales per square foot averaged $2,900. Today, the company boasts a $3 billion valuation, many in-person locations, and millions of satisfied customers to its name.
The company plans to add 30-40 new stores in cities and malls annually. The target for what is one of the world's most lauded digital startups is to reach 900+ stores to meet its growth potential fully. Along with the physical expansion, their "Home-Try-On program" and the "Buy a Pair, Give a Pair program" will be further strengthened as these have proven to be critical success factors.