Luxottica - the corporation that monopolizes more than 80% of the eyewear brands on the market

Background: Luxottica has dominated the eyewear industry for decades, owning 80% of the major brands and raising prices on some products from $19 to $100.

The plan: Combining the strengths of e-commerce, a customer-centric model and vertical integration… Warby Parker was determined to create a shock to a market that seemed saturated.

The result: After only 7 years of establishment, Warby Parker is valued at $1.2 billion, owns more than 1,400 employees, 64 stores and has become a major force in the industry.

Late Night Ideas

At that time, Blumenthal was just a student at Wharton Business School. He and 3 friends in a chat group had the same question, "Why are glasses so expensive?".

Blumenthal then quickly sent an email to the 3 friends late at night, presenting the idea of ​​a company specializing in selling glasses online. All immediately agreed: "We almost couldn't sleep because we were so excited."

But few people know why glasses are so expensive. Simply because for decades, the glasses industry has been "dominated" by the Luxottica group, which owned 80% of the eyewear brands on the market in 2014.

As a result, the prices of eyewear brands have increased rapidly. RayBan before being acquired by Luxottica was only $19 a pair, but now it has become a "luxury brand" with a price of no less than $100.

Blumenthal and his co-founders quickly gathered in a bar the next evening. Their biggest concern was whether anyone would be brave enough to buy glasses online. To solve this problem, they decided to launch an unprecedented campaign: Sending customers five free pairs of frames to try on at home, and the customers would not incur any fees until they decided to buy.

A rough start

Just two years after that bar meeting, Blumenthal was ready to launch his brainchild, Warby Parker, in GQ magazine to promote the company’s vision. But there was a problem: Warby Parker’s official ordering website wasn’t yet live.

The founders were confident that the website would be ready before the article went to print, but a series of technical issues delayed the launch date several times. What’s more, the ad they had hoped would be published in March, titled “GQ’s March issue,” actually went on sale… February 15. The founders were scrambling to get the website up and running on time.

Within two days of being featured in the magazine and becoming famous, Warby Parker was “overwhelmed” with orders. And because the website was completed in such a rush, the "Out of stock" function was... forgotten, causing more than 20,000 customers to think that their order had been successfully placed.

It was a serious planning mistake, but the Warby Parker guys calmly handled the "crisis" by writing an apology email to each customer and explaining why their orders would be delivered much later than expected.

With no offices, no stores, and not even a stock of inventory, the sheer volume of orders forced Blumenthal to personally invite each customer to come in and try on glasses in his home. Despite a rocky start, Warby Parker, with its “superior” quality and customer service, quickly hit its first-year sales goal in just… three weeks of opening.

"Unique" model

After the initial "struggling" days, these guys decided to apply a very "special" operating model: Vertically Integrated E-commerce.

With this model, Warby Parker focuses on cutting out all intermediary costs by designing its own frames, sourcing its own materials, and working directly with manufacturing factories. In this way, the company can produce high-quality glasses starting at just $95, including prescription lenses.

Understanding the "free" mentality of users, Warby Parker also allows its customers to try on glasses for free at home, buy with free shipping, and even a return policy without incurring any costs, which is very "generous" compared to all e-commerce companies on the market.

Customer-focused strategy

Customer experience at Warby Parker is always supported by analysis from huge data sources. All complaints such as (wrong glasses, poor quality products, late delivery ...) are analyzed to thoroughly resolve their root causes.

Warby Parker also raises the "stature" of the Customer Care department to a higher level than usual, employees working directly with "customers" have the ability to request support from Supply Chain, Production, Marketing, Accounting ... departments to quickly resolve problems that occur with customers.

Not only focusing on customers, Warby Parker also cares about society when launching the "Buy 1, Share 1" program, a portion of revenue from each pair of glasses sold will be sent to eye charities in underdeveloped countries.

By early 2015, Warby Parker was valued at 1.2 billion USD with more than 1 million pairs of glasses sold. In addition, the company also owns more than 1,400 employees and 64 stores, a remarkable step forward after only 7 years of establishment.

However, the Warby Parker team is not resting on its laurels as they are aware that they only account for 1% of the market. There is still a lot of potential and many challenges waiting for the "four-eyed" guys.

5 lessons from the Warby Parker story

Although Warby Parker was fortunate to catch the wave of e-commerce as well as a market that was too "frustrated" with Luxottica. The students can be completely proud that they built their career with their own hands and minds:

- Honesty is the key to Customer Service: Everyone will make mistakes, but explaining to customers is really important. In the early days of its establishment, Warby Parker transformed "unlucky" customers into brand ambassadors with "above-average" service.

- Grow fast but must be controlled: The vertical integration model not only helps Warby Parker grow quickly but also ensures that they can control changes and maintain customer satisfaction.

- Decisions must be based on data: Customer feedback is always carefully considered and compared with a huge database to ensure that the problem never happens again.

- The customer is king: Despite having a huge market pie, Warby Parker is still "calmly" developing based on loyal customers, to take steady steps for the future.

- Giant is not perfect: Warby Parker is not afraid to find the "gap" left by Luxottica to develop, something that no one dares to think of.