For this exercise, I wanted to compare two very different products with similar business model designs.
Today, the direct-to-consumer market is huge. Companies are eliminating the middleman, reducing their costs, and engaging directly with their consumers. By reducing their costs, direct-to-consumer brands have been able to undercut some of the biggest players in their respective industries. Warby Parker and Casper are two successful start-up companies who have both leveraged direct-to-consumer business models to create product designs that have generated cult followings from consumers.
Warby Parker is one of the most successful direct-to consumer companies to date with a valuation of ~$1.75B. When Warby Parker launched, it aimed aimed to solve one problem: “eyewear is too expensive”. To solve this problem, Warby Parker undercut the prices of eyewear monopoly, Luxottica and offered customers unique experiences to make shopping for eyewear fun and fashionable. One of Warby Parker’s best business designs didnt even involve the frames. Warby Parker’s “Try at Home” experience allows customers to pick five frames to be delivered right to their homes to test for fit. Who has every had an experience where you see a super cute, maybe a bit edgy pair of glasses, and then you try them on and all…yeah no, those weren’t the ones..? Me too. The experience that Warby Parker has created is ingenious. Warby Parker’s at home try-on design is so popular that many new companies have started to mimic this model . Companies have attempted to integrate “at home try-ons” into their own business models and even began using customer’s webcams to give them an virtual in-store experience. Still, webcams still don’t beat trying on glasses in person, in the comfort of your own home. Not to mention, Warby Parker will also ship your “at home try-on” pair to you for free with a prepaid return label. As consumers are increasingly looking for ways to avoid salespeople (or just people) and have everything at their fingertips and delivered (think Uber Eats, Instacart), adding prescription glasses to the list of deliverable products is a winning model.
Now for the actual product design…
Warby Parker frames range anywhere from $95-$300 depending on how complicated your prescriptions are and what lenses you may need. Warby Parker current has two main products, sunglasses and eyeglasses. Both product designs are unique and fashionable and cater to the millennial market. Aside from fashion, what makes Warby Parker’s product design awesome is the quality of the glasses for the price. Poly-carbonate lenses are one of the best lenses and usually cost over $200 ALONE. Warby’s frames are durable yet fashionable and they have the option for progressive, clear or light responsive lenses. WP glasses have a 30-day return policy and when ordering online, customers usually receive their perspiration glasses in about 5–7 business days. Customers will upload their prescription to the website or a Warby Parker representative will graciously reach out to your eye doctor and confirm your prescription. As you can see, customer service is an additional aspect that adds to Warby Parker’s amazing product and business model design. Warby will change your lenses FOR FREE if they are scratched within a year of purchase. This model is unheard of!! I had a recent experience where my prescription was updated after 18 months and Warby Parker not only replaced my lenses, but they sent me new frames FOR FREE. If that isn’t enough for a bomb business model, Warby Parker participates in a buy a pair, give a pair program. For ever paid of glasses sold, WP will donate a pair to someone in need. Hello social consciousness!
Warby Parker has continued to innovate in the eyeglasses space and has elevated from a company that provides eye wear to a company who is redesigning the eye wear customer experience from optometrist to final product. Good business designs continue to innovate. Recently, Warby Parker has turned to innovation and vertical integration, starting with the creation of their very own vision test. Warby aims to eliminate the need for customers to go elsewhere to get their prescription by offering in-store eye exams or a eye exam right from your smartphone with an innovative new app. Warby’s Prescription Check app allows eligible clients to receive an assessment from a licensed eye doctor who will check how your current prescription is fairing and provide an updated prescription if necessary.
As you can see, Warby Parker has created a business model to eliminate the hassle and reduce the costs associated with shopping for eye wear. You know what else is a hassle? Shopping for mattresses *sad face*. Let’s take a look at how Casper is shaking up the mattress industry.
Casper is a new but popular player in the direct-to-consumer industry. Casper’s current valuation is $750M and the company has been backed by big retailers such as Target. Casper’s mission is similar to Warby Parker. So similar, that Casper originally wanted to be considered the “Warby Parker of mattresses”. More recently, they have revisited their mission and they now aim to be the “Nike of sleep”. Casper and Warby Parker both have very glaring similarities. Like Warby, Casper has aimed to reduce the exorbitant costs that are associated with purchasing a new mattress. The average brand name Queen mattress can cost anywhere from $250–$5000. With such a wide spectrum, Casper aims to be on the lower end of the pricing spectrum at $950 for a standard Queen.
Casper set out to solve one problem: change the mattress-buying experience. Casper realized that there was an opportunity to make mattress-buying easier and more convenient. By eliminating overwhelming decisions and customer concern of “how will I get this thing home?” Casper created a semi-firm mattress with originally only one model. Today this has expanded into 3 different models.
Like Warby Parker, customer service is one of Casper’s competitive advantages. Each bed-in-a-box mattress ships with a hand-written thank you note and a book for bed-time. Additionally, Casper offers a 100-day return policy, compared to a 30-day return for other mattress companies. Unlike Warby Parker, Casper continues to innovate its product design. Where Warby Parker’s innovations relate to disrupting the eye wear industry and really doubling down on convenience, Casper is more focused on improving sleep and comfort with product designs. With a growing team of engineers, Casper is now on its 14th mattress design and has expanded to dog beds, sheets and pillows. With new tweaks and product innovations, Casper has decided to enter the premium mattress market with a cost of $1850. I think that this is an interesting decision. Warby Parker will never look to play with luxury brands because its value add is to provide fashionable eye wear at low costs. With Casper moving into the premium market and pricing itself in line with premium competitors, its main competitive advantage is the convince. For these reasons, Warby Parker’s overall business model and experiences are better than Casper.
In comparing both Warby Parker and Casper, although both business models are similar, Warby Parker uses more divergent thinking. Warby Parker aimed to solve the problem of eyewear shopping being a complicated and expensive experience. To solve this problem, Warby Parker used divergent thinking by coming up with multiple solutions to change the entire eyewear experience such as home try-on, making buying glasses a fun experience, social responsibility and making eye exams convenient right from your phone. It can be argued that Casper’s solution to buying a mattress is divergent thinking however there are very few ways that Casper is differentiating itself from other bed-in-a-box competitors. What Casper has been able to do is expand the types of products that consumers can expect to be delivered via a direct-to-consumer model, which is very impressive. So, this begs the question, what will be next for direct-to-consumer business?
