Since the arrival of the Internet, many companies have tried to generate their businesses based exclusively on the web. Others have succeeded in bringing physical models to the online environment, as Netflix did for example with the model of subscription video stores, but few have made the barrier between the physical and the virtual more liquid, at least with as much success as Warby Parker.
Warby Parker is a company that began offering the sale of prescription glasses online, with a model that made it easy to choose several models to try them from home at a lower price than the standard. To this was added a strong character of social responsibility, giving away a pair of glasses or an optical exam to people in need for each sale they made. And, finally, leaving the digital to go physical, opening a network of more than 150 stores in the United States.
A few days ago Warby Parker went public with a valuation of more than 4,500 million dollars, but without having managed to be profitable until now. The center of his commitment: the first generation in history to have lived in a digital environment is beginning to age, so more glasses will be necessary -especially due to the use of screens- and this public will be used to buying them online. This is the story of a company that can be an example of hybrid models in the future.
Ten years of online eyewear sales when nobody bought glasses online
The company was founded in 2010 in Philadelphia by Neil Blumenthal, Andrew Hunt, David Gilboa, and Jeffrey Raider. Of them, Blumenthal and Gilboa are his current co-CEOs. The name “Warby Parker” derives from two characters that appear in a journal by writer Jack Kerouac.
With a hybrid training between business and science, Gilboa told in a 2018 interview in Fortune the origin of the idea.
“Before starting a new course at the University, in 2008, I took a few months to backpack around the world and lost my glasses on a plane. I spent most of the first semester without glasses because I was surprised by the cost. You could buy a new phone for $200, but designer glasses cost $700. I started complaining to anyone who would listen that I couldn’t believe the glasses were so expensive.”
David Gilboa, co-CEO of Warby Parker
That was the germ of a company that mainly sells glasses online and through its many stores in the United States and Canada. In the beginning, however, their physical presence did not exist, and it was the Home-Try-On program that made them known.
Under this strategy, its clients select five frames from its website, which they receive and try on at home in 5 days, free of charge. The company has programs where customers upload a photo and try on frames virtually through its augmented reality mobile app.
Warby Parker began operating exclusively online in 2010 and opened its first store in 2013. As Warby Parker’s revenue began to grow, the company opened stores for anyone to see their frames live.
Still at a loss, but with the view of being a business for the first digital generation
One of the Warby Parker stores in New York. Wikimedia Commons
After a decade of growth, but giving losses to continue growing and receiving investment, Warby Parker went public at the end of September.
His commitment to making an expensive product cheaper, and his social vocation by donating a pair of glasses, has meant that until now his number of customers has not stopped growing.
In 2018, Warby Parker had 1.45 million active customers, growing to nearly 2.1 million as of June 2021. The company defines active customers as a single entity that made at least one purchase in the last 12 months.
Between 2018 and 2020, Warby Parker’s net income grew from approximately $270 million to nearly $400 million. By the end of 2021, the company expects to add 10 to 15 more stores and increase revenue by 35%.
The only problem is that it has not been profitable, at least so far. The company lost $56 million in 2020 and more than $7 million in the first six months of 2021.
But his long-term bet is the one we’ve already cited: An aging, screen-addicted, vision-impaired population will propel his eyewear business to even higher revenues in its second decade of existence.