Warby Parker, which uses buy one-give one (BOGO) cause marketing as a key element of its positioning and marketing has officially hit the big time. Investors and the business press are taking note of the company’s 500 percent growth in 2011.
Since its founding in 2010 Warby Parker has sold stylish spectacles for $95. For every pair you buy the company gives a second pair to someone who needs them.
Since Warby Parker’s BOGO appeal emerged on the heels of TOMS Shoes BOGO, it’s easy to conclude that its BOGO was a case of me-to. But there’s more to the story than that.
Eyeglasses were invented in 1286 by Friar Giordano da Pisa. Ben Franklin added the bifocals in the 1780s. But aside from little things like adding gradient lenses or different coatings, there hasn’t been that much innovation in eyeglasses in the years since. (Although that may be changing with "Google glasses").
Eyeglasses seem exactly like the kind of product that would be commoditized. And, yet, strangely, they haven't been. More surprising still, eyeglasses have crazy profit margins. Their markup isn’t just 100 percent like in clothing, but 10 to 20 times what they cost to manufacture!
There’s plenty of competition, to be sure, but not as much as TOMS faces with shoes. And for all the competition, there’s really only one dominant player, the $7 billion (sales) Italian company Luxottica Group, which owns Ray Ban, Persol, Oakley, LenCrafters and more. Luxottica is also an active cause marketer.
Warby Parkers founders, Neil Blumenthal, David Gilboa, Andrew Hunt and Jeffrey Raider, who were buddies at Wharton Business School, must have looked at the eyeglass market and salivated. But nothing I’ve said here so far wasn’t known by others. What Warber Parker did was to completely regrind the business model.
They made the look of Warby Parker glasses handsome enough that the fashion forward young man or women could confidently wear them. And the youth market was important early on as the brand gained traction. But let’s not kid ourselves, there’s plenty of places where you could find similarly-styled eyeglasses.
They also priced the glasses right. The materials and labor in glasses amount to a few bucks each. But who among us would trust our eyesight to glasses that cost, say, $10? Or even $25? No, $100 is about right.
They focused tightly on their own cost structure and sold online only. Until recently all of Warby Parker’s promotional efforts, as with TOMS Shoes, were via word of mouth.
But the kicker was the BOGO. While Warby Parker is building its brand, the BOGO makes it easier for prospective customers to try something unfamiliar. As the brand matures, the BOGO will help Warby Parker repel competitors.
Concludes Gwen Moran in her January 2012 profile in Entrepreneur magazine:
“Meanwhile, the company’s philanthropic commitments remain strong:
“It recently became a certified B Corporation and purports to be one of the few carbon-neutral eyewear brands in the world. ‘It was important to the four of us,’ Blumenthal says, ‘that if we were going to dedicate our life savings and our time to building an organization, we wanted to have a positive impact.’”
Labels: BOGO, Buy One Give One, Entrepreneur magazine, Luxottica Group, Tom's Shoes, Warby Parker