Warby Parker Case Study

Case Study: Warby Parker

There are many trends, both environmental and business, that are working for and against Warby Parker. For example, the growing demand to shop from home has created a great platform for Warby Parker to flourish. An annual survey by analytics firm, comScore and UPS found that “consumers are now buying more things online than in stores.” The survey found that shoppers now make 51% of their purchases online as opposed to 48% in 2015 and 47% in 2014 (Farber, 2016).

A trend that has been and will continue to harm Warby Parker is consumer hesitation to purchase glasses that they can not physically try on. Additionally, insurance companies are much more hesitant to allow their customers to use their insurance to buy glasses online, rather than purchasing with the insurance company’s preferred provider.

Since their creation, Warby Parker has taken certain actions that have allowed them to partly disrupt an industry that has been largely dominated by Luxottica. Warby Parker can credit a lot of their success to their system of disintermediation and working directly with suppliers. As a result of these systems, Warby Parker is able to avoid licensing fees and transfer value on to their customers. In a margin comparison between a $200 Ray-Ban frame and a $65 Warby Parker frame, Warby Parker transferred approximately $97 in value to their customers by working directly with their frame suppliers and manufacturing their own lenses. “By maintaining a limited number of retail stores, and pooling inventory at its New York-based warehouse, Warby Parker can deliver higher inventory turns (Bogosian, 2017).”

In 2016, Luxottica kept 4.25 weeks of inventory in its warehouse; if we assume the same number for Warby Parker, then warby parker turned over their frame inventory around 10 times while luxottica turned their over roughly seven times. It should be noted that Warby Parker would likely