Warby Parker Real World Consult ing

Agenda Define  

Opportunity  Measures  of  Success  

Analyse  

External  &  Internal  Solu:on  Op:on  /  Alterna:ves  

Recommend  

Solu:on  Opera:onal  Hooks  

Implement  

Strategy  Timetable  Change  Management  Risks  Finances  

Define Analyse Recommend Implement

Issues

“How  to  bulletproof  your  balance  

sheet”  

Limited  product  range  

Restricted  management  structure  

Small  store  footprint  

Lack  of  ability  to  do  more  

Lack  of  impact  

transparency  

Define Analyse Recommend Implement

Success for Warby Parker

BALANCE  SHEET  $420M  

annual  profit  

SOCIAL  IMPACT  

1M  directly  impacted    

STORE  FOOTPRINT  55  stores  

INCREASED  ATTACHMENT  

RATE  2  per  sale  

CUSTOMER  SATISFACTION  

80%  

Define Analyse Recommend Implement

Market Analysis

INDUSTRY  RIVALRY  Long  term  companies  

Strong  supply  networks  

 HIGH  

NEW  ENTRANTS  Specific  supply  

chain  Limited  buyers  

 MEDIUM  

POWER  OF  SUPPLIERS  

LuxoYca  factories  Offshore  

 MEDIUM  

POWER  OF  BUYERS  

Poor  choice  of  affordable  op:ons  

 LOW  

SUBSTITUTES  Contacts  Laser  eye  Fashion  

 HIGH  

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Business Analysis

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STRENGTHS  Socially  innova:ve  

Quality  products  at  good  prices  

Superior  customer  service  25  most  innova:ve  

consumer  &  retail  brand  Emo:ve  

Online  presence  

WEAKNESSES  Changing  fashion  

Lots  of  different  touch  points  

Centralised  management  structure  

Lack  of  understanding  on  how  to  grow  &  scale  up  

OPPORTUNITIES  Strong  balance  sheet  

Diversifica:on  possibili:es  Good  reputa:on  

1  for  1  dona:on  structure  

THREATS  Luxo:cca  –  same  supply  

chain  Compe:tors  have  high  resources  –  can  make  a  

loss  to  compete  Young  company  and  compe:tors  have  not  aggressively  responded  

Analysis Summary

Define Analyse Recommend Implement

Con:nue  

• 1  for  1  social  innova:on  

• Superior  customer  service  

• Quality  products  at  good  prices  

Take  Advantage  

• Strong  balance  sheet  

• Diversifica:on  possibili:es  

Be  Aware  

• Well  resourced  compe:tors  

• Changing  trends  •  Joint  supply  chains    

Alternatives

Define Analyse Recommend Implement

Status  Quo   Sell   Diversify   Expand   Diversify  +  Expand  

ATTRACTIVENESS  

•  Strategic  Fit   Low   Low   Mid   Mid   High  

•  CompeLLon   Low   Mid   High   Mid   High  

•  Profit   Mid   Mid   Mid   Mid   High  

ACHIEVABILITY  

•  LogisLcs   N/A   Low   Low   Mid   Mid  

•  RegulaLon   N/A   Low   Low   Mid   High  

•  Efficiency     Mid   Low   Mid   Mid   High  

AFFORDABILITY  

•  Cost   Low   N/A   Mid   High   High  

Solution Strategy

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Expand   Diversify   Partner  

Solution

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Small  store  footprint  Expand  further  into  North  America  and  open  Flagship  

stores  in  Europe  54  new  stores  by  2019  

Lack  of  impact  transparency  

Digital  impact  tracking  system  

Tracking  all  social  impact  by  2017  

Limited  product  range  Diversify  as  a  premium  

fashion  brand  into  apparel  and  accessories  

Increased  adachment  rate  by  two  per  online  or  offline  

sale  

Expand

Define Analyse Recommend Implement

US/CAD  Stores  • 50  Stores  • $12.5  million  

Flagship  European  • Four  stores  (Milan,  Paris,  London  and  Prague)  

• $4  million  

Takeaway  2019  Figures  

Total  Cost:  $16.5  million  Total  Stores:  54  stores  Expected  Total  Profit:  $420  million  annual  Expected  Profit  Per  Store:  $??  

Diversify

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Product  Ranges  

Brand  Posi:oning  

Premium  fashion/lifestyle  

brand  

Eyewear  

Apparel  

Accessories  

Follow Your Impact

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Common IT Core

Retail Mobile Apps Online

Every product Individual Impact

Unique Code Tracked and remembered across touch points

Implementation Strategy

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Consolidate   Create   Communicate  

Implementation Timeline

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Immediate  (0-­‐6  months)  

Short  (6-­‐18  months)  

Medium  (18mths  –  3  years)  

Long  (3-­‐5  years)  

Consolidate  

•  Stores   Standardize  Store  Layout  

•  Management  Structure   Open  Prague  &  San  Fran  Offices  

•  Suppliers/DistribuLon   Nego:ate  with  new  suppliers  

•  Partners   Nego:ate  with  non-­‐profit  partners  

Start  partnerships  with  iden:fied  non-­‐profits  

Create  

•  Stores   Expand  Store  Footprint   Open  Flagship  Fashion  Stores   Scope  future  Europe  expansion  

•  Diversify    Scope  new  designs   Begin  prototyping  new  designs  

•  Transi:on  to  Fashion  Product  Line  

•  Begin  mass  produc:on  Scale  manufacturing  

•  Follow  Your  Impact  Scope  requirements  

•  Build  and  test  •  Online/offline  integra:on  

•  Kiosk  development  Rollout  begins  

Communicate  

•  Brand  PosiLoning   Transi:on  to  Fashion  Brand  posi:oning  

Financials  

•  Cost   $6M   $18M   $30M   $20M  

Change Management

Define Analyse Recommend Implement

• Central  office  in  New  York  • Secondary  offices  in  San  Francisco  and  global  flagship  areas  • Board  of  directors  =  consultants,  owners,  managers  and  VCs  

Management  structure  

• Centralized  communica:ons  network  • Training  programs  

Internal  Communica:on  

• Consistent  brand  messaging  • Marke:ng  partners  • Independent  third  party  impact  verifica:on  

External  Communica:on  

• Community  and  social  appeal  • Travel  abroad  schemes  for  staff  • Supported  professional  development  and  management  courses  

Recruitment  &  Reten:on  

Risk

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RISK   LIKELIHOOD   CONSEQUENCE   MITIGATION  

Compe:tors   High   High   Efficiencies,  Expansion,  Diversifica:on  and  Costs  retained  

Disrup:on   Medium   Medium   Diversified  product  lines  

Brand/reputa:on   Medium   High   Communica:ons  strategy,  social  media,  integrated  marke:ng  plan  

Internal  culture   Medium   High   Change  management  strategy,  use  of  consultants  and  strong  staff  engagement  

Fashion  trends   Low   Medium   Top  designers,  feedback  based  design  

Supply  chain  compe::on   Low   Medium   Clear  social  purpose,  posi:ve  contract  engagement  

Cash  burn   High   Medium   Clear  KPIs,  annualized  repor:ng  structure  

 -­‐        

 5    

 10    

 15    

 20    

 25    

2014   2015   2016   2017   2018   2019   2020   2021   2022   2023   2024  

Billion

s  

Revenue  by  Category  

Eyewear   Clothing   Accessories   Total  Revenue  

Finances

Apparel  

Define Analyse Recommend Implement

EBITDA  =  $22Billion  p.a  by  2024  NPV  =  108million  IRR  =  182%  ROI  =  800%    

 Warby  Parker      Luxohca      Market  Share     <1%   80%    Revenue      $53  Million      $52  Billion    

 2024  Market  Share      ~1%     80%    2024  Revenue      $22  Billion      $85  Billion    

 Annual  Units  to  3rd  World      Glasses      58  Million      Clothing      176  Million      Accessories      205  Million    

VALUE  OF  PRODUCTS  =  1.5  Billion  annually  

Finances

Define Analyse Recommend Implement

Vision for Warby Parker

BALANCE  SHEET  $420M  

annual  profit  

SOCIAL  IMPACT  

1M  directly  impacted    

STORE  FOOTPRINT  55  stores  

INCREASED  ATTACHMENT  

RATE  2  per  sale  

CUSTOMER  SATISFACTION  

80%