The Warby Parker business model is responsible for over $1.2 billion in sales. The craziest part? It only took them 5 years to reach that kind of valuation. Considering most billion dollar brands needed decades to reach their size, it’s safe to say that Warby Parker’s growth trajectory is special.
The question is… how?
What are the specifics of their business model that struck such a profitable chord? Why were those specifics critical to their success, especially in the already monopolized eyewear industry? And what can we learn from this case study that we can apply to our own businesses?
Let’s look deeper and see what we can find.
The Warby Parker Business Model – Explained
Warby Parker’s entire premise comes from one huge problem.
“Why is buying glasses so expensive?”
Turns out, Luxottica owned a 60-80% market share in the eyewear industry. They owned Lenscrafter, Ray-ban, Pearle Vision, and Oakley… which all sold through retail. In addition, they also held the licenses for Chanel and Prada. So when you have bigger markups due to retail and licensing fees, you end up with a really expensive pair of glasses. Expenses that wouldn’t exist in a direct to consumer model.
That’s where Warby Parker comes in.
They realized the core problem was an inefficient supply chain.
To fix this, they went from outsourcing their production and distribution to owning the entire thing. This meant replacing their contract manufacturers with their own in-house manufacturing and replacing their retail partners with their own direct to consumer ecommerce channel.
Later on, they would also add in their own branded retail stores. But again, because they own these stores, they don’t have to deal with any weird partner markups you would usually see.
With this, it was financially viable to sell premium eyewear at just $95 a pair.
The Warby Parker Growth Strategy
It wasn’t just Warby Parker’s core premise that was impressive. It was also the growth strategies they used to then market these “affordable luxury” glasses.
Their most important strategy? Understanding they were a fashion company.
When people are in the market for glasses, the first thing they do is check how certain glasses look on them. In response, Warby Parker not only made glasses that looked amazing, but they built their entire brand to model after other fashion brands, not eyewear brands. In fact, they were pretty famous for how committed they were to their branding, including their now iconic blue color. But this only solved half the problem.
Enter the “Home-Try-On Program”.
The biggest objection Warby Parker faced was that it was still impossible to tell if their great looking glasses would actually look good on any particular person’s face. To solve this problem, they created a program that allowed customers to actually order their favorite glasses, try each one on, keep the one they liked, and return the ones they didn’t. Just like that, they solved the biggest barrier in selling fashion products online.
Next, their “Buy A Pair, Give A Pair” program.
This was social program was built into the company from the start. For every high end pair of glasses sold to their regular customers, Warby Parker would either donate or provide an ultra low cost pair of glasses to a person in a developing country. For obvious reasons, the program made supporting Warby Parker even easier. It also helped with their next growth strategy.
Warby Parkers PR launch strategy.
Ask most brands today how they would launch and most will say paid ads. Not Warby Parker. They understood the power of PR from the very start. Sure, enough great press can send droves of customers to your site for free. But more importantly, having great press gave them the number one most important thing a new brand can have… credibility. This is especially true in Warby Parker’s situation as they were going head to head with some of the biggest eyewear brands in the world.
Takeaways From The Warby Parker Business Model
Whenever you come across a business that makes $1.2 billion sales, you know there are a ton of lessons you can learn from them. However, there are 3 big lessons to takeaway from Warby Parker’s success.
The first is to do the opposite.
The genius behind Warby Parker’s positioning was that they took everything they learned about Luxottica’s business model and then proceeded to do the exact opposite. Wherever there Luxottica had partners, they went in-house and wherever Luxottica had markups, they would eliminate them. In other words, Warby Parker was positioned from the get-go to be the anti-Luxottica.
The second is to understand your customers.
The move to build a fashion brand that sold eyewear rather than being a straightforward eyewear company was genius. It allowed them to visually differentiate themselves from their competitors, charge premium prices, and it was also exactly what people wanted when buying glasses. This wouldn’t have happened with understanding that the first thing customers do when buying glasses was to look in the mirror.
Lastly, they answered objections.
Wherever there was a potential bump in the road when it came to making a sale, they proactively answered it with an innovative solution. Why should people buy their glasses over everyone elses? Well, Warby Parker glasses look great and was cheaper. What about not being able to try different glasses to see which looked better? They created the “Home-Try-On” program.
So on and so forth.