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Assignment 1 FBM 262-204 Contemporary Retail Management Professor Salerno

Section 1: Background and Profile 

Warby Parker was founded in 2010 by Neil Blumenthal and Dave Gilboa. After having a number of showrooms, they opened their first brick and mortar store in Soho, New York in 2013. With business booming, 2016 lead to expansion into Toronto, Canada and 46 new stores in the US. In 2017, Warby Parker opened its first manufacturing location in New York which cuts and fits lenses, but the frames are still manufactured by third parties. This year also lead to the brand launching its prescription checking app, where customers can use mobile or computer devices to take eye tests and pick frames to try at home. Warby Parker has grown to be a top competitor in the optical industry In 1961, Leonardo Del Vecchio established Luxottica. The brand first started as just a supplier, but in 1971, the first collection of the brand was showcased at MIDO, turning them into an eyewear manufacturer. In 1981, the company grew its wholesaling ventures with opening a subsidiary in Germany and acquiring more independent distributers throughout the decade. Luxottica also decided to partner with fashion brands such as Giorgio Armani, Vogue, Chanel, and Bvlgari. With their acquisition of Sunglasses Hut in 2001 and their e-commerce appearance in 2008, the brand was able to grow globally. In 2014, the brand expanded to glasses.com where customers could superimpose any glasses onto their face on the site and get them custom made. Through acquiring many brands and collaborations to their advanced online presence, Luxottica has grown immensely.

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Warby Parker has its current position in the market because of its affordable prices, wide range of frame designs, and online-to-offline business model. Luxottica has its current position in the market from its extremely wide range of must have brands, global presence, exceptional e-commerce platform, and many acquisitions to expand them.

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Warby Parker owns 100 stores across the US and has an online presence. The new funding values the company reach about $1.75 billion. Warby Parker last raised a $100 million investment about three years ago that valued the company at $1.2 billion and has

now raised nearly $300 million in total. The label makes about $3,000 per square foot in its retail spaces. Warby Parker makes an estimated total of $75 million for its gross profit margin. Luxottica has around 9,000 stores across the globe. They have overall sales of around $5 billion and a gross profit of about $3 billion. 

Warby Parker is a growing business. They have really focused on their target marketing and have exceptionally branded themselves with stylish glasses for an affordable price. Their company will only grow with modern technology and more consumers turning to ecommerce to do their shopping. Luxottica is also a growing business. As one of the top companies for eyewear with its eclectic group of labels, Luxottica will be able to stay on top with the changing times. They have grown exponentially through the years and will continue to grow as they adapt new forms of retail.

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Warby Parker uses omni-channel retailing. They started as an online business in 2010 and expanded to brick-and-mortar stores in 2013. Warby has become known for providing an incredible retail experience, including on-the-spot eye exams, next-day and direct-to-door service, and inviting stores that combine local art and architecture with stylish frames. Luxottica is also using omni-channel retailing. With its many brick and mortar stores, AccuExam experience, and Glasses.com presence, Luxottica had been able to successfully operate many channels of retailing.

Section 2: Strategic Elements 

Luxottica has many strategic elements incorporated into their company such as practicing an integrated business model. They also have focused on their global and customer service as a top priority. They have acquired many brand names to give their customers optimal selection. They have many different branches to their company such as brickand- mortar stores, an online presence, and offer eye exams online and in stores. These features allow their customer to have an ideal shopping experience under their brand. Warby Parker has developed many strategic elements in their company. First, all of their glasses are extremely affordable and go straight from manufacturer to consumer. Next, Warby has a home try on program where customers can pick pairs to try on at home, pick the one or ones they like, and send the others back for free. They also give a pair of glasses to someone in need with every purchase made. Warby Parker has brick-and-

mortar stores as well as online and each store has a trendy atmosphere perfect for their target audience. 

Both of these companies use their omni-channel retail style to achieve the biggest customer base they can. Having eye exams online and in store allows the companies to allow their customer all of their optical needs in one place. Warby Parker and Luxottica also have a wide selection of frames which allows customers optimal choice. Luxottica uses their global presence as an advantage because they can reach a wider audience than Warby. They also carry a wider variety of brands as Warby Parker only has their in-house brand, giving them the advantage. Warby Parker uses their try on at home program to their advantage so customers can get to touch and see the glasses before they buy them, and usually end up getting more than one pair. They also use their buy a pair give a pair program to make customers feel accomplished when they buy something from their company. Warby Parker’s glasses are overall cheaper than Luxottica’s glasses, giving them the advantage in affordability.

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A disadvantage Warby Parker encounters is that it only has stores in the US and Canada. Although they ship internationally on their website, having brick-and-mortar stores across the globe would allow for even more customers to the company. Another disadvantage to this company is many smaller companies are imitating their practices and doing it better. Made Eyewear is copying Warby’s try it at home program, but shipping back and forth is completely free. They also let customers customize the entire pair of glasses, as Warby Parker does not. A disadvantage found within Luxottica is its high price tag for almost all of its products. Luxottica redesigns brands for them to appear trendy and make the company more of a profit along with other scams consistently used by this monopoly, such as adding a small logo to the sides of glasses in order to justify increasing the price by hundreds of dollars.

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Both brands have a very successful, strong omni-channel experience. Luxottica has many stores across the globe with a wide variety of brands for customers to choose from. They also have developed their online presence to be easy to use with an even wider selection. They also provide eye exams within the company so customers can get all their optical needs in one place. Finally, Luxottica practices vertical integration, so they control their entire supply chain. Warby Parker has a successful omni-channel experience because they are consistent all

across their channels. They have a unique, trendy website where customers have unique buying experiences for an affordable price. Their brick-and-mortar stores translate the same aesthetic, drawing their target customer in. Warby Parker also manufactures their product and is able to bring it straight to the customer, allowing the smoothest transaction process. Section 3: Sustainable Competitive Advantage 

Both companies achieve a strong sustainable competitive advantage. Warby Parker achieves theirs with low costs, online shopping convenience, social responsibility, and need for their product. Warby has their items priced so affordably, it allows the necessity for glasses to be easily accessible for most consumers. The online shopping convenience try on at home program, and online eye exams allow customers to have everything they need in one place. Finally, they are a very ethical company because they provide customers with an affordable price and with every pair of glasses sold, they give one to someone in need. Luxottica achieves their completive advantage by buying brands and smaller companies to have under its label. With a necessity for glasses, people will most likely end up at a Luxotica brand or brick-and-mortar store, showing how much of a power presence the label has. Finally, Luxottica practices vertical integration, so they have power throughout every part in the manufacturing process.

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Both brands have issues and risks that could impact their future. Warby Parker now has many brands who are attempting to copy their style, and some are doing it better. Brands like Made Eyewear are making their costs even lower, which could potentially drive sales lower for Warby. Also, if the company does not start to have brick-and-mortar stores internationally, people may turn to other brands to do their eyewear shopping because they are not represented. Luxottica faces the issues of increased competition and management uncertainty. Glasses are a huge part within the fashion industry that many brands are making more affordable options for the quick trends. Brands under the Luxottica label are priced so high, that more customers are turning to cheaper alternatives to stay on trend. The label also has had poor inner management suability in its recent years and is working to improve. If they cannot improve, the company may face many issues leading to a potential downfall.

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