The Digital Transformation Playbook: Rethink Your Business for the Digital Age

Warby Parker Versus Luxottica
Warby Parker is an American eyeglasses brand that is seeking to disrupt the 
way prescription glasses and sunglasses are sold to consumers. The tradi-
tional behemoth in this industry is Luxottica Group, which controls more 
than 80 percent of major eyewear brands (including Ray-Ban, Oakley, Per-
sol, and licensed designer brands such as Armani and Prada).
Perhaps because of the highly consolidated market, the traditional cus-
tomer experience when purchasing glasses is far from inviting. Glasses cost 
upward of $300, and buying them involves going to a retail store, placing 
an order, and returning later for the product. Warby Parker offers its own 
brand of fashionably designed glasses primarily through e-commerce sales 
at a price of $95. To surmount the challenge of picking out glasses from afar, 
the company allows consumers to select five frames to be mailed to them 
free to try on. Once they choose the frame they like, the prescription lenses 
are added, and the final product is delivered.
Does Warby Parker pose a disruptive threat to the incumbent? Let’s 
take a look at the two differentials to judge (see table 7.3).
The biggest difference in Warby Parker’s value proposition is its price—
less than one-third the traditional price for the product. There is also a 
potential difference in access: for consumers who want to avoid multiple 
trips to a store or who don’t have many retailers in their area, the online 
service may be another big advantage. (To appeal to customers in major 
cities, the start-up has launched a limited number of retail stores and show-
rooms.) In addition, it donates one pair of glasses, via nonprofit Vision-
Spring, for each pair that it sells to consumers. This and other social causes 
(Warby Parker is a certified B corporation and 100 percent carbon neu-
tral) matter a lot to some consumers. So it would appear that, at least for 
Table 7.3 
Business Model Disruption: Warby Parker (Disrupter) Versus
Luxottica (Incumbent)
Value proposition differential
Value network differential
Much lower price ($95)
Accessibility
Social cause
Online channel
Low retail costs
Vertical integration
B corporation status

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some consumer segments (price sensitive, preferring to avoid retail hassles, 
or favoring social cause brands), the company offers a dramatically more 
attractive value proposition.
What about the value networks? Is there any difference that allows 
Warby Parker to deliver this value? The first differences are its online sales 
channel and its much lower retail costs. It also can keep prices low due 
to its vertical integration (it owns the brand, manufactures the product, 
and owns the entire sales channel). By contrast, Luxottica licenses many 
of its brands, and although it owns large retail chains, it also sells products 
through other retailers. It could certainly launch an e-commerce portal for 
its own brands, but its cost structure would likely prevent it from coming 
close to Warby Parker’s price. As a standard, publicly listed corporation, 
Luxottica would also have difficulty matching Warby Parker’s level of sup-
port for social causes.
Clearly, Warby Parker poses a disruptive threat for Luxottica—having 
a much better value proposition that the incumbent cannot emulate. But it 
is not yet clear how broad the disruption will be. Perhaps many customers 
are willing to pay the higher prices for global brands like Prada, or prefer 
to shop in a nearby store, or won’t care as much about carbon footprints 
and donated eyeglasses.
These kinds of issues will determine the scope and impact of a disrup-
tive challenger like Warby Parker. Such variables can significantly affect 
success. Let’s take a look at some of the key variables that impact the out-
come of business model disruption.
Three Variables in Business
Model Disruption Theory
The theory of business model disruption can identify and explain the cause 
of disruption by a wide variety of challengers and in different industries. 
But just because a challenger poses a genuine disruptive threat does not 
mean that others in the industry are doomed. Incumbents may have some 
choices in how they respond. And the nature of the disrupter itself—its 
value proposition and its value network—can predict much of how the dis-
ruption will play out.
Three important variables that complete the theory of business 
model disruption are customer trajectory, disruptive scope, and multiple 
incumbents.

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