Warby Parker, an online retailer of spectacles, is focusing on battling tough macroeconomic headwinds. By the end of the year, 40 more physical shops will be available, for a 25% increase in total store count and 201 total locations.
“We do have confidence that our shops function as billboards and don’t need as much marketing assistance [as eCommerce],” co-founder and co-CEO Dave Gilboa said during the company’s second-quarter results call. “Our mix change looks more like it did in 2019 in terms of where orders are completed in stores vs online.”
Gilboa stated that “generally, we find that our eCommerce business is more directly related with marketing spend and performance marketing dollars,” indicating that the present circumstance is more similar to 2019 than the preceding two years.
While acknowledging that Warby’s marketing pullout may be partially responsible for the slowdown in demand, the company insisted that the decision was taken in response to declining demand and decreased foot traffic.
A Different Company
Since the New York-based eye care firm went public 11 months ago in a highly anticipated IPO, which saw tremendous demand from investors eager to get a piece of what was seen to be one of the most successful D2C businesses, a lot has happened.
The market value of Warby Parker has since fallen by 70%, bringing it down to less than $2 billion. Despite this, the company’s founders and executives have insisted that they are simply adapting to the new environment and that their caution and conservative outlooks do not signify a loss of faith in the brand’s larger mission.
Gilboa declared, “We are adopting a more conservative approach for the rest of 2022 given the worsening macro situation. “We continue to trust in the durability of the optical business and expect these challenges to be temporary,” he continued, “but until we see it materialize, we are no longer banking on optimism or demand recovery.”
Taking Down Obstacles
In addition to the new store openings, Co-Founder and Co-CEO Neil Blumenthal informed investors that the business was pursuing a four-pronged growth strategy to handle market volatility and low retail traffic as inflation weighs on sales.
“Our studies suggest that the top hurdles to purchasing from Warby Parker include a lack of a nearby location, inability to obtain an eye exam, and not being perceived as a facility that covers all of their vision care requirements,” Blumenthal added. “While our growth this year has trended lower than our long-term expectations, we remain optimistic about our category’s rebound.”