warby parker - mbacasecomp.com · assumptions: 1) growth continues to double/year 2) boutiques are...

Warby Parker Odette School of Business

Ryan Donally

Evgeni Gentchev

Taylor Laporte

Bilal Rammo

Issue Identification

•  How to continue to meet our social commitment of distributing eyeglasses to those in need in a sustainable way? What decisions need to be taken in order to retain their growth momentum?

Recommendation

•  Three pronged approach •  New Corporate Headquarters

•  Increase Number of Physical Store Locations

•  Further Cause Marketing Efforts

Agenda

•  Strengths and Opportunities

•  Weaknesses and Threats

•  Competitive Advantage

•  Alternatives

•  Weighing the Options

•  Recommendation Advantages

•  Financials

•  Implementation

Strengths and Opportunities

Strengths Opportunities

Socially Conscious Brand Equity Superior Customer Service Low Cost Distribution Accessible Price Point Quality similar to industry leaders Partnerships with non-profits

Expand product offerings Increase social commitment Brand Recognition Geographical Expansion Changing Consumer Demands

Weaknesses and Threats

Weaknesses Threats

Brand Awareness Cost of One to One Model Relative Low Margin

Price/Quality Perception Economic Sustainability Mature Market

Competitive Advantage Valuable

Rare

Inimitable

Non-Substitutable

Exploitable

Customer Service

Product Quality

Business Model

Price of Product

Online Distribution

Brand

Alternatives

•  Status Quo

•  Extend Product Offerings

•  Increase Number of Physical Locations

Weighing the Options

Economic Sustainability (40%)

Social Commitments (10%)

Brand Image (30%)

Brand Awareness (20%)

Totals

Status Quo 2 2 2 2 2.0

Extend Product Offerings

1 2 1 2 1.3

Increase Number of Physical Locations

3 3 3 3 3.0

Recommendation Advantages

•  Increasing Brand Awareness

•  Experiential product engagement

•  Extending culture of Warby Parker

•  Increasing Sales

Assumptions: 1)  Growth continues to double/year 2)  Boutiques are 50 sqft. Outlets 500 sqft. 3)  $2927/sqft on outlets (80%). $585/sqft (20%)

Revenues by year and per location

2010   2011   2012   2013   2014  

In $   $ 3,333,300.00   $ 6,666,600.00   $ 13,333,200.00   $ 26,666,400.00   $ 53,332,800.00  

qty sold   33333   66666   133332   266664   533328  

$/sqft  

Sales per location Type  

Online (%)   $ 16,187,024.00   61%  

Boutique (8)   50   585.44   $ 234,176.00   1%  

Outlet (7)   500   2927.2   $ 10,245,200.00   38%  

Financials

Revenues Expected per new location:

Units Sold per day

Revenues  per  location New  Locations Total  Revenues GM Profits  in  2013Boutique 29,272.00$                     8 234,176.00$                 15% 35,126.40$                Outlet 1,463,600.00$         7 10,245,200.00$     25% 2,561,300.00$    Online 16,187,024.00$     50% 8,093,512.00$    

Units  sold  per  day Per  TypeOnline 443.48 443.48Boutique 6.42 0.80Outlet 280.69 40.10

Financials

Implementation

•  5 Part Implementation – 4 Years Plus •  1- Marketing Strategy- Day 1 Onwards

•  2- Expansion of Secondary Corporate Office and Distribution Center- Year 1

•  3- Addition of 8 Boutique/Retail Locations- Year 1

•  4- Expansion of up to 8 Direct Retail Locations- Year 2 though 4

•  5- Warby Parker Cause Retailers- 2 onwards

Marketing Strategy

•  Click and Mortar & Brick and Mortar •  Augmented reality technology •  Establish web presence via social media (Facebook, Twitter, Pinterest, etc.) •  Emphasize sustainable social commitment (Profit, People, Planet)

•  Online product forums •  Advertising campaign revolving around one-to-one business model (corporate

social responsibility) •  Allocate 5 million dollar marketing budget

Secondary Office

•  1 Year Completion approx.

•  Location Determination- (research, contracts)- 8 Weeks

•  Set Up- Week 9 through completion

•  Costs •  Set up- $100K (Desks, Chairs, Networks)

•  Labour - $1 Million (20 ee’s @ $50,000)

•  Rent- $75,000/ Yr. ( 5000 sq.ft. $15 Per Sq Ft.)

Boutique/ Retail

•  1.5 Years

•  10 Weeks Per Set Up- 8 Stores

•  $10,000 training, set up and misc. expenses

•  Expected Revenue of $29,272 per store

•  “Test Markets”

Direct Retail

•  1-3 Year Timeline

•  Converting boutique markets into Direct Retail Outlets

•  Expected Revenue of $1.463 Million- 14,636 Glasses

•  $500,000 Labour- (20 ee’s @ $25,000 avg.)

•  Rent – $100-$500 sq. ft. -500 Sq. Ft. $50,000-$250,000

•  Design- $500,000 approx.

Warby Parker Future

“Cause Retailing”

Thank You

Odette School of Business

Ryan Donally

Evgeni Gentchev

Taylor Laporte

Bilal Rammo