Warby Parker Inc. (WRBY)

Warby Parker is a mission-driven lifestyle brand and public benefit corporation that operates at the intersection of design, technology, healthcare and social enterprise. A pioneer of the direct-to-consumer model, it designs and sells its own eyewear and offers a broader vision care business with the goal of providing affordable, quality eye care and "vision for all." It has more than 3,000 employees. Through its Buy a Pair, Give a Pair program and nonprofit partners, it distributes glasses to people in need in more than 50 countries and parts of the United States.

Its offering covers eyeglasses and sunglasses, contact lenses, eye exams and vision tests, and vision insurance. Glasses start at $95 including prescription lenses, and the company releases over 20 new collections a year. Frames use materials such as cellulose acetate and titanium, with polycarbonate lenses, UV protection and scratch-resistant and anti-reflective coatings included. Lens options include single-vision, progressive, light-responsive and blue-light-filtering. It sells its own Scout by Warby Parker daily contacts, launched in 2019, as well as third-party contacts. Eye exams are offered at 150 retail stores and through the Virtual Vision Test telehealth app, with optometrists employed by the company or by independent professional corporations under contractual arrangements. Proprietary tools include Virtual Try-On, a Digital PD Tool and a custom point of sale system. In 2022, contacts contributed 7% of net revenue, eye exams and vision care 3%, and vision insurance 4%.

Warby Parker sells to consumers through its website, mobile app and 200 corporate-owned retail stores (195 in the U.S. and 5 in Canada), with no franchises. Its Home Try-On program lets customers try five frames at home free for five days. The company sizes the U.S. eyewear market at about $76 billion, per the Vision Council, and the global market at about $170 billion, per Statista. It cites durable demand drivers: 82% of U.S. adults use vision correction, replacement cycles are short, screen time is rising, e-commerce penetration is low at about 15%, and interest in telehealth is growing. Its growth strategy includes deepening engagement with existing customers, building brand awareness, expanding to 900+ U.S. stores, investing in technology and design, broadening contacts, exams and insurance, and evaluating international expansion.

Its supply chain is vertically integrated. Frames are designed at its New York City headquarters and made by third-party manufacturers, with raw material and manufacturing suppliers located mainly in China, Japan, Vietnam, Taiwan and Italy. It works with more than 30 partners for frame factories, lens and case suppliers, distribution, optical laboratories and logistics. It operates in-house optical laboratories in Sloatsburg, New York, and Las Vegas, Nevada, plus multiple U.S. fulfillment centers. Eyewear is regulated by the FDA as a medical device, and the company follows Consumer Product Safety Commission and ANSI standards, requires vendors to meet European CE standards, and uses third-party testing agencies. A social compliance program with Verité audits direct suppliers in China and Japan. Competition in eyewear is based on brand image, product quality, price, innovation and style. The legacy optical industry is concentrated among a few large players, and the company competes on price, quality, customer experience and vertical integration.