Lund Consulting Group

Kajsa Anden Otabek Akhunov

Erika Fredriksson Bjorn Hellqvist

Warby Parker - The thrilling future for a sustainable eye wear industry

Main Challenge

Our Recommendation

“How to maintain growth momentum, without losing track of Warby Parker’s sustainable identity”

“To maintain growth momentum and keeping the core identity by reaching a new segment of

Business-to-Business, using the concept of “Work is fun!””

| ANALYSIS | CHALLENGE | ALTERNATIVES | RECOMMENDATION | IMPLEMENTATION | SUMMARY |

Agenda

•  Analysis

•  Challenge

•  Alternatives

•  Recommendation

•  Implementation & Financials

•  Risk & Contingency Plan

•  Final Words

| ANALYSIS | CHALLENGE | ALTERNATIVES | RECOMMENDATION | IMPLEMENTATION | SUMMARY |

Who are Warby Parker?

External

VALUE PROP.

•  Low price •  Sustainability •  Hip and smart

RELATIONSHIP

•  High customer service

POSITIONING

•  Low price, high quality

Internal / External

EXPRESSION

•  “The Netflix of eyewear”

CORE

•  The most fun and respectful eyewear company

PERSONALITY

•  Fun and quirky

Internal

MISSION/VISION

•  Sustainable, affordable and hip

CULTURE

•  The best for our cause

COMPETENCES

•  Disrupted value-chain

•  Innovation

| ANALYSIS | CHALLENGE | ALTERNATIVES | RECOMMENDATION | IMPLEMENTATION | SUMMARY |

Who are the customers buying eyewear?

Design

Quality

Customer service

Price

Availability

Distribution channels

| ANALYSIS | CHALLENGE | ALTERNATIVES | RECOMMENDATION | IMPLEMENTATION | SUMMARY |

What matters to customers Pe

rceived  custom

er  ra

/ng  

Cri/cal  factors  

Design  

High  

Low  

Quality   Price  Customer  service  

Availability   Distribu;on  channel  

Warby  Parker  Luxo?ca  

•  Focused  differen;a;on  is  a  key  for  Warby  Parker  

 •  High  quality  equal  to  

Luxo?ca  at  low  price    •  Sustainable  compe;;ve  

advantage  for  Warby    

| ANALYSIS | CHALLENGE | ALTERNATIVES | RECOMMENDATION | IMPLEMENTATION | SUMMARY |

Growth potential of Warby Parker

- Current state of Warby Parker and how could this be used?

•  Physical resources available within the company •  Opportunity to excel within the business model WP already have.

•  Human resources •  Attractive employer with top-people already on-board.

•  Financial resources •  The VC run of 2013 create an opportunity to grow.

| ANALYSIS | CHALLENGE | ALTERNATIVES | RECOMMENDATION | IMPLEMENTATION | SUMMARY |

Current state, what is the future?

Today, WP has started to open up physical stores.

Ø  Is this in line with the identity, and is it where to go in the future?

| ANALYSIS | CHALLENGE | ALTERNATIVES | RECOMMENDATION | IMPLEMENTATION | SUMMARY |

Challenge

Main Challenge

“How to maintain growth momentum, without losing track of Warby Parker’s sustainable identity”

| ANALYSIS | CHALLENGE | ALTERNATIVES | RECOMMENDATION | IMPLEMENTATION | SUMMARY |

Critical Success Factors for the future of Warby Parker

•  Investors •  Is the alternative adjacent with the goal of WP’s current investors?

•  Brand •  Is the alternative coherent with WP’s core identity?

•  Customer service •  Will it be able to keep up the high level of customer service?

•  Distribution •  Will the alternative change the current distribution and logistics network?

•  Price •  Will WP be able to keep the low pricing strategy?

•  Sustainability activities •  Is the alternative creating further sustainable efforts?

| ANALYSIS | CHALLENGE | ALTERNATIVES | RECOMMENDATION | IMPLEMENTATION | SUMMARY |

Alternatives

1.  Product diversification - Creating a new line of products within a brand new category.

2. New segments

- Reaching out to a new segment of potential customers. 3. Market expansion

- Finding new opportunities in new geographical markets.

| ANALYSIS | CHALLENGE | ALTERNATIVES | RECOMMENDATION | IMPLEMENTATION | SUMMARY |

Product diversification

- Creating a new line of products within a brand new category.

 •  Creating a new market through a new product

category.

•  Using the core values of sustainability, with the resources already available in the company.

•  Develop the customer experience •  Reaching beyond books to new products associated with

eye-sight.

| ANALYSIS | CHALLENGE | ALTERNATIVES | RECOMMENDATION | IMPLEMENTATION | SUMMARY |

Reaching out to new segments

 •  Start relationships with the business sector.

•  Create a substitution program for old glasses.

•  Create a new channel to expand the sustainability efforts.

•  Use sustainable competitive advantage and maintain core.

- Reaching out to a new segment of potential customers.

| ANALYSIS | CHALLENGE | ALTERNATIVES | RECOMMENDATION | IMPLEMENTATION | SUMMARY |

Market expansion

 •  Going further with the existing model of doing business of

Warby Parker.

•  Larger volume raise sustainability awareness around the world.

•  Find new geographical markets. •  Similar markets as the U.S. •  Developing countries with high demand.

- Finding new opportunities in new geographical markets.

| ANALYSIS | CHALLENGE | ALTERNATIVES | RECOMMENDATION | IMPLEMENTATION | SUMMARY |

Vetting the alternatives

Product diversification New segments

Market expansion

Investors

Brand

Customer Service

Distribution

Price

Sustainable activities

Innovation

Critical Success Factors

Our Recommendation

•  New attractive market segment •  Differentiated concept into B2B •  Further fertilized our sustainable

activities

“To maintain growth momentum and keeping the core identity by reaching a new segment

of B2B using the concept Work is Fun!”

| ANALYSIS | CHALLENGE | ALTERNATIVES | RECOMMENDATION | IMPLEMENTATION | SUMMARY |

| ANALYSIS | CHALLENGE | ALTERNATIVES | RECOMMENDATION | IMPLEMENTATION | SUMMARY |

Implementation

Open  HQ  in  Silicon  Valley  

Further  enhanced  distribu/on  channel  

Addi/onal  sustainable  program  

| ANALYSIS | CHALLENGE | ALTERNATIVES | RECOMMENDATION | IMPLEMENTATION | SUMMARY |

HQ in Silicon Valley

Approach  B2B  e.g.  Google,  Apple,  Tesla  etc.  

•  Release  marke;ng  B2B  campaign  

Area  of  innova;on,    sustainable  and  social  entrepreneurship      

Large  poten;al  for  future  business  partners  

Key  customer  segment  area  

| ANALYSIS | CHALLENGE | ALTERNATIVES | RECOMMENDATION | IMPLEMENTATION | SUMMARY |

Enhanced distribution channel

Distribu;on  channel  

Online  channel  

•  Improve  virtual  showroom  

•  ‘Warby  Parker  Class  Trip’  concept:  •  Business  

Buyers  Bus  Club  

| ANALYSIS | CHALLENGE | ALTERNATIVES | RECOMMENDATION | IMPLEMENTATION | SUMMARY |

Sustainable program

ü  Con;nue  buy  one,  donate  one  concept  

 ü  Establish  collec;ng  and  

recycling  concept      

| ANALYSIS | CHALLENGE | ALTERNATIVES | RECOMMENDATION | IMPLEMENTATION | SUMMARY |

Sustainable program

Open  HQ  in  Silicon  Valley  

Further  enhanced  distribu/on  channel  

Addi/onal  sustainable  program  

Short  term  6m     Medium  term  1Y   Long  term  >1Y    

| ANALYSIS | CHALLENGE | ALTERNATIVES | RECOMMENDATION | IMPLEMENTATION | SUMMARY |

Implementation costs

Open  HQ  in  Silicon  Valley  

Further  enhanced  distribu/on  channel  

Addi/onal  sustainable  program  

$6m  

$0.1m   $0.1m  

$10m  Poten/al  upside  (20%  of  WF)  

| ANALYSIS | CHALLENGE | ALTERNATIVES | RECOMMENDATION | IMPLEMENTATION | SUMMARY |

Risks and how to mitigate

•  Difficult getting business contacts.

•  Complications in establish another HQ.

•  Losing the fun and quirkiness going corporate.

•  Expansion not being big enough.

•  Negative reputation spill-over.

| ANALYSIS | CHALLENGE | ALTERNATIVES | RECOMMENDATION | IMPLEMENTATION | SUMMARY |

Final Words

Main Challenge

“How to maintain growth momentum, without losing track of Warby Parker’s sustainable identity”

Our Recommendation

“To maintain growth momentum and keeping the core identity by reaching a new segment of

Business-to-Business, using the slogan of “Work is fun!””