On the Road A clear vision for the future of Warby Parker
University of Ottawa Brian Goodman Natasha Gulati Dave Pouliot Peter Yaraskavitch
Agenda
• Vision testing
• Getting a prescription
• Framing the choices
• Ensuring the fit
• Seeing things clearly
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Vision testing
• Warby Parker is seeking to maintain its current growth rate while maintaining its social commitments and building a long-term brand
• Satellite issues: • Small market player
• Brand awareness challenges
• Reputation for exceptional customer service
• Has financial resources to invest in growth
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The prescription
• Warby Parker must extend its commitment to social well-being by reaching out to those who share those beliefs while protecting its supply capabilities.
• University students should be targeted
• Address supply threat posed by Luxottica
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Framing the choices
Decision Criteria Enter upscale market Develop niche market Focus on low-cost
Maintain social commitments X
Improve competitive position X
Maximize marketing investments X X
Improve technology X X X
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Framing the choices
• Compete in upscale market • + opportunity to go on offensive against Luxottica
• - would be going up against extremely strong competitor
• Identify and compete in niche market • + lower marketing costs
• - may alienate current customers
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Framing the choices
• Compete in low-cost market • + large potential market
• - could lower reputation for strong service
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Company Overview
Warby Parker
Retail and Online Community Outreach
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Ensuring the fit
Strengths Weaknesses
Opportunities Threats
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Ensuring the fit
Strengths - Customer service - Human resources - Innovation
Weaknesses
Opportunities Threats
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Ensuring the fit
Strengths - Customer service - Human resources - Innovation
Weaknesses - Market share - Liability
- Distribution
Opportunities Threats
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Ensuring the fit
Strengths - Customer service - Human resources - Innovation
Weaknesses - Market share - Liability
- Distribution
Opportunities - Expand offering - Partnerships - Demographic
Threats
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Ensuring the fit
Strengths - Customer service - Human resources - Innovation
Weaknesses - Market share - Liability
- Distribution
Opportunities - Expand offering - Partnerships - Demographic
Threats - Competition - Changing preferences
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Warby Parker’s Focal Point
Economy Fashion
Medical Devices Moral Leadership
Community
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Customer Demographic
• Care about social responsibility
• Identify with a fashionable and stylish product
• Looking for a premium product with a value proposition
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Generation Y and Millennials identify with all of these values – Target university students!
Current Revenue Trend
• Assumptions:
• Sales Doubled each year
• Average $293 per pair
• Cumulative Sales at 2013 is 500,000 pairs
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Projected Revenue Trend
• Assumptions • Cumulative sales at 2013
at 500,000 pairs
• Low Growth = 75% CAGR
• Medium = 100% CAGR
• High Growth = 125% CAGR
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Warby Parker Financial Situation
• Completed round of $ 60 Million venture capital funding
• Earmarked for increases to technology investment and increasing customer service teams
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Portion of current financing can be used to continue further growth
Seeing things clearly
19 Growth & Learning
Operation
Customer Experience
Financial
Social Responsibility
First Approach Second Approach
Supply Chain Niche Customers
Increase Conditions Supply Chain
Enhanced Enhanced
Secure & Growth Growth
Innovation, Coherence, Marketing
First Approach: Securing Supply Chain
• Why ? • To reduce threat from Luxottica
• Enhance worker’s conditions
• Propose new products
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Find Unique Supplier Or Secure Contracts
Create an CSR Analysis of the Supply
Chain
Improve Production Capacity and Development
6 Months USD $1Million
6 Months USD $500,000
As soon as Possible USD $10M / year
Second Approach: Enhance Customer Experience
• Step 1: Open Retails Store Around University Campus:
• Hire local students to promote the brand
• Target: Canada and US - 20 Universities
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• How? • Set-Up Online Associate webpage and actively approach Universities
• Create a mobile team to help the associate set up the location
• Reward entrepreneurs in shares in addition to salary
Timeframe: 1 year
Budget: 8 Millions for Leases
and Salary
Second Approach: Enhance Customer Experience
• Step 2: Improve Marketing by Creating Stories
• Why? Similar to a wine connoisseur or an Apple fan, the niche market you will be targeting is inspired and motivated by knowing their products
• Concrete Example: Production – Delivery – Your own Experience – Giveback to Community
• Extra-Mile: Sponsor celebs that embrace Warby Parker sustainable commitment
22 Timeframe: 8 months Budget: USD $15M
Furthering Social Commitments
• Identification of other organizations that share social beliefs on strengthening communities through vision
• Potential candidates include volunteer optometrists
• Use their distribution networks for donated eyewear
• Mutually beneficial
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Return on Investment
• Based on Medium Growth Year 1 Additional Revenue: $19.3 Million Year 2 Additional Revenue: $72.5 Million
• Cost = $42.5 Million
• Payback Period: ~1 to 1.5 years
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Risks and Mitigations
Risks Mitigations
Increases in manufacturing costs Explore additional manufacturing options
Changes customer preferences Explore other niche markets that identify with the brand
Universities reject promotion of Warby Parker
Target Universities that are known for social values
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Key Performance Indicators
Number of glasses donated: 528,000 pairs in 2014
Number of universities reached: 20 Universities
Secured a long term contract by: Middle of 2014
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Key take-aways
• Warby Parker must extend its commitment to social well-being by reaching out to those who share those beliefs while protecting its supply capabilities.
• University students should be targeted
• Address supply threat posed by Luxottica
• This approach will allow Warby Parker to maintain its current growth and social commitments
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Questions?
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