Entrepreneur—a person who risks time, effort, and money to start and operate a business. That definition describes Dave Gilboa—along with Neil Blumenthal, Andy Hunt, and Jeff Raider—four entrepreneurs who started a new type of eyewear company called Warby Parker. Their goal was simple: Sell eyeglasses for less than $100 per pair. The business idea grew out of co-founder Dave Gilboa’s personal experience. When he was a graduate student, he lost his glasses while hiking and was so outraged by the high price of replacing them that he squinted for months rather than buy new glasses. Eyeglasses are made from wire, plastic, screws, and glass, yet the retail price is often many times the actual cost of the materials, yielding a hefty profit margin. Adding a designer logo to a pair of frames pushes the final price even higher. Talking with friends, Gilboa learned he wasn’t the only person unhappy about having to spend a lot for eyeglasses. So the four entrepreneurs became a team and created a business plan for a new kind of eyewear company that would sell eyeglasses at an affordable price.
What really makes Warby Parker different? How can they sell eyeglasses and sunglasses for less than $100 while other retailers and marketing intermediaries including LensCrafters, Pearle Vision, and Sunglass Hut sell their products for much more? Again, the answer is simple: They sell directly to consumers. Direct marketing through its online virtual store keeps Warby Parker’s distribution costs low and avoids the kind of markups that other retailers use to increase the final price they charge in order to boost their profits. Another reason why Warby Parker can charge less is that its in-house designers develop all its frame styles, which means no licensing fees for the right to use famous fashion logos. Customers benefit because Warby Parker passes the savings along in the form of affordable prices for quality eyewear.
Warby Parker’s online website makes it easy—very easy—to buy eyeglasses. Customers can select up to five eyeglass frames from its online inventory and have their choices delivered for a five-day free at-home trial before purchasing a pair. Warby Parker pays the postage both ways, so the customer risks nothing. Frame prices begin at $95 per pair, although optional extras such as progressive lenses will increase the final price. After deciding on a frame, the customer submits a prescription, clicks to finalize the order, and receives new glasses by mail within one to two weeks.
Originally, Warby Parker marketed its eyeglasses only online. In 2010, initial sales were so brisk that the startup surpassed its first-year sales objectives by the end of the first three weeks. During the first six months of 2011, Warby Parker had already sold 85,000 pairs. Since then, sales have continued to grow each year as more tech savvy customers are purchasing eyeglasses online. But not everything is online. Customers have always been able to visit the company’s headquarters, see frames in person, and try them on before ordering. This proved so popular that after a few years, the co-founders decided to open small showrooms in large cities so more customers could try on frames and consult with staff before making their purchase.
Now Warby Parker has embarked on an ambitious strategy of opening more stores in cities where the company’s database shows high concentrations of customers. It now has over 50 stores and showrooms in 22 U.S. states. Some of these stores are equipped for optical examinations. Some include photo kiosks so customers can snap fun photos of themselves wearing different frames and post to social media for advice from friends. The photos don’t just help customers make buying decisions—they keep the Warby Parker brand in the public eye and help the firm stay in touch with customers who opt to receive communications.
What’s next for Warby Parker as it shakes up the eyewear industry with direct marketing, retail stores, low prices, fun styles, and social responsibility? Good question. While sales are reported to be over $100 million a year, the company does have a social conscious: It donates a pair of glasses to someone in need for every pair it sells. As evidence of its commitment to social responsibility, Warby Parker is now a “B corporation.” Choosing to become a B corporation is one more way to demonstrate its commitment to social responsibility and attract customers, investors, and employees who share those values. At the time of the publication of your text, Warby Parker is funded by private investors. And although there have been rumors that Warby Parker will sell stock to the general public, it is just speculation at this point. You may want to keep your eyes open to see what happens to this young eyeglass company and how it may impact the eyeglass industry.
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