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AP Business Case Study · Unit 1, Task 2

Warby Parker: Designing a Better Way to Buy Glasses

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Unit 1 · Solution Fit and Competitive Advantage Analysis

A real-company case study for Unit 1, Task 2 of AP Business with Personal Finance, written in the same format as the course's business cases. Read the case, answer each question on your own, then open the sample answers to check your thinking. Facts are current as of October 2026, and every source is listed at the bottom.

The Case

Unit & taskUnit 1, Task 2: Solution Fit and Competitive Advantage Analysis
Topics1.2, 1.4
Key peopleNeil Blumenthal (Co-founder and co-CEO); Dave Gilboa (Co-founder and co-CEO); Andrew Hunt (Co-founder and director); Jeffrey Raider (Co-founder and director)
Case years2010–2026 · Evaluation case
Key questionHow did Warby Parker build a solution that fit a real customer problem, and how has it tried to achieve competitive advantage in a concentrated eyewear market?
Business Canvas componentsCustomer, Product, Market
Snapshot
  • Business: Warby Parker — prescription glasses, sunglasses, contact lenses, and eye exams
  • Industry: Eyewear and vision care
  • Founded: Launched in 2010 by four Wharton School MBA students
  • Stores: 323 retail stores in the U.S. and Canada (December 31, 2025)
  • Key people: Neil Blumenthal and Dave Gilboa, co-founders and co-CEOs
  • Ownership/Status: Public company; listed on the New York Stock Exchange (WRBY) through a direct listing on September 29, 2021

A Problem the Founders Knew Firsthand

Warby Parker grew out of a frustration its founders had felt themselves. While they were students, one of them lost his glasses while backpacking. A new pair was so pricey that he started graduate school without glasses and got through an entire semester that way. The four founders — Neil Blumenthal, Dave Gilboa, Andrew Hunt, and Jeffrey Raider, all students in the MBA program at the Wharton School of the University of Pennsylvania — were puzzled that something so many people need every day cost so much and was such a hassle to buy. They started the company while they were still in business school.

Their explanation centered on how the industry worked. Warby Parker’s website says the eyewear business has been dominated by a single company that kept prices artificially high. In its annual report, the company describes the traditional optical industry as highly concentrated among a small number of players. It names large competitors such as EssilorLuxottica and VSP, as well as online-only sellers such as Zenni Optical. According to the same report, independent optical shops made up about 40% of prescription optical retail sales in 2025.

Selling Direct at One Simple Price

The founders’ solution was to skip the traditional channels. Warby Parker designs its glasses in-house in New York and sells them directly to customers. The company says that selling direct lets it charge less than many of its competitors. Its prescription glasses start at $95, with prescription lenses included, under what it calls simple, unified pricing. The lenses are impact-resistant and block UV rays, and they come with scratch-resistant and anti-reflective coatings.

The company also built giving into its business. Through its Buy a Pair, Give a Pair program, Warby Parker distributes a pair of glasses to someone in need for every pair of glasses or sunglasses it sells, working with partner organizations. The company cites an estimate that about one billion people around the world need glasses but do not have access to them.

Solving the Try-On Problem

Warby Parker launched in 2010 as an online-only seller. Back then, the company later noted, hardly any brands had started out online, so selling glasses only on the internet was an unusual idea. That model raised an obvious question for shoppers: how could they know which frames looked good on their faces without visiting a store?

Warby Parker’s answer was Home Try-On. Customers chose five frames on the website, or took a short quiz to get suggestions, and tried them at home for five full days — for free. Then they could order the pair they liked. The program let customers test the product in real life before paying, and it let Warby Parker sell glasses online without asking customers to guess.

Learning and Adjusting

The company kept changing its solution as it learned. It opened its first permanent retail store in New York in 2013. It added contact lenses in the fall of 2019. Its stores multiplied, from 161 at the end of 2021 to 323 at the end of 2025 (Exhibit 1), and by the end of 2025, 285 of them offered in-person eye exams. That year, eye exams and vision care made up 6.4% of the company’s revenue, and contact lenses made up 11.1%. Customers can also see frames on their own faces with the company’s Virtual Try-On tool.

As stores spread, one of the company’s best-known ideas came to an end. Warby Parker retired Home Try-On at the end of 2025. In its shareholder letter, the company called the decision bittersweet. It pointed to how much its stores and online channels had grown and said retiring the program would let it serve customers more quickly and smoothly.

Where Things Stand

Warby Parker became a public company on September 29, 2021, through a direct listing on the New York Stock Exchange. Its net revenue grew from $540.8 million in 2021 to $871.9 million in 2025. After a net loss of $20.4 million in 2024, the company reported net income of $1.6 million in 2025. Blumenthal and Gilboa still lead the company as co-CEOs, and Warby Parker says Buy a Pair, Give a Pair has now distributed more than 25 million pairs of glasses.

Warby Parker still sees room to grow. Insurance is used in about 60% of U.S. vision-care purchases, but orders paid with insurance made up only 8.3% of Warby Parker’s 2025 revenue. The company has also announced long-term partnerships with Google and Samsung to develop AI-powered glasses designed for all-day wear, which were still in development as of its 2025 annual report. Meanwhile, competitors ranging from large optical companies to online-only sellers continue to compete for the same customers.

Exhibit 1: Warby Parker’s Growth, 2021–2025
YearNet revenueRetail stores at year-end
2021$540.8 million161
2022$598.1 million200
2023$669.8 million237
2024$771.3 million276
2025$871.9 million323

Source: Warby Parker annual reports (including Form 10-K), 2021–2025.

Reading Questions

These are the same for every case. They check that you caught the basics before you analyze.

1. Which business does this case feature, and what product or service does it provide?
The case features Warby Parker, which designs prescription glasses and sunglasses in-house and sells them directly to customers online and in its own stores, with glasses starting at $95 including prescription lenses. It also sells contact lenses and offers eye exams in most of its stores.
2. Who are the key people named in the case, and what roles do they play? Which other stakeholders — individuals or groups — have an interest in the business?
Neil Blumenthal, Dave Gilboa, Andrew Hunt, and Jeffrey Raider are the four co-founders who started the company in business school; Blumenthal and Gilboa lead it as co-CEOs. Other stakeholders include customers who buy glasses, contacts, and eye exams; people in need who receive glasses through Buy a Pair, Give a Pair and the partner organizations that distribute them; shareholders since the 2021 direct listing; store employees; insurance providers; technology partners Google and Samsung; and competitors such as EssilorLuxottica, VSP, Zenni Optical, and independent optical shops.
3. Identify an opportunity and/or a challenge the business faces in this case.
An early challenge was persuading people to buy glasses online when they could not try frames on, which Warby Parker addressed with Home Try-On. A current opportunity is insurance: about 60% of U.S. vision-care purchases use insurance, but insurance orders were only 8.3% of Warby Parker’s 2025 revenue. Another opportunity is AI-powered glasses with Google and Samsung. A continuing challenge is competing with large optical companies and low-price online sellers while staying profitable — the company earned just $1.6 million in net income in 2025.

Practice Questions

These apply the Unit 1 concepts from Task 2 to the case, in the style of AP free-response prompts.

1. Explain how Warby Parker’s entry into the eyewear market could affect the prices buyers pay for prescription glasses. Use evidence from the case.Topic 1.2 · LO 1.2.A
In a market, buyers want to pay as little as possible and sellers want to charge as much as possible, and the market price settles where the two sides agree to trade — where supply meets demand. Warby Parker describes the traditional optical industry as highly concentrated among a small number of players, and when buyers have few alternatives, sellers can keep prices high. Warby Parker entered as a new seller offering glasses starting at $95 with prescription lenses included, which increased the supply of glasses available to buyers. When supply rises while demand stays the same, the market price tends to fall. Buyers could now compare Warby Parker’s price with what other sellers charged, and many chose Warby Parker — its revenue grew from $540.8 million in 2021 to $871.9 million in 2025 — so rival sellers could face pressure to lower prices or offer more value to keep their customers.
2. Evaluate Warby Parker’s plan to achieve competitive advantage. Identify two sources of competitive advantage and one weakness or threat to that advantage, using evidence from the case.Topic 1.2 · LO 1.2.B
One source of competitive advantage is lower cost: Warby Parker designs its glasses in-house and sells directly to customers, which the company says lets it charge less than many competitors, with prices starting at $95. A second source is differentiation through its customer experience and brand — Home Try-On made online shopping easy, stores now offer eye exams, and Buy a Pair, Give a Pair gives customers a reason beyond price to choose the brand. The plan has worked well enough for revenue to rise from $540.8 million in 2021 to $871.9 million in 2025, an increase of about 61% (($871.9 − $540.8) ÷ $540.8 ≈ 0.61). A threat is that low prices are easy to copy: online-only sellers such as Zenni Optical also compete on price, and large rivals such as EssilorLuxottica and VSP have scale. Profit is also thin — net income was only $1.6 million in 2025 — so the advantage is real but not yet secure.
3. Apply the design-thinking process to Warby Parker. Describe what the founders did at the empathize and define stages, and explain how Home Try-On helped Warby Parker’s solution fit a customer concern about buying glasses online.Topic 1.4 · LO 1.4.C
In the empathize stage, the founders drew on their own experience as frustrated customers — one founder went a semester without glasses because replacements cost so much — to understand that glasses were too expensive and inconvenient to buy. In the define stage, they could state the problem as: How might we sell good-looking prescription glasses at a fraction of the usual price, without the hassle? Their solution was to design in-house and sell directly online, but selling only online created a new barrier: customers could not see how frames looked on them. Home Try-On removed that barrier by letting customers try five frames at home for five days for free, so they could buy with confidence, which helped turn interest into actual purchases. Because design thinking is iterative, Warby Parker kept testing and refining — opening stores, adding eye exams, and finally retiring Home Try-On at the end of 2025 once its store network and online tools could meet the same need.

Discussion Questions

Talk these through with a partner or your class. There's more than one good answer, so back yours up with evidence from the case.

  1. Warby Parker’s founders built their company around a problem they had experienced themselves. What are the advantages and the risks of starting a business with your own problem?
  2. Warby Parker retired Home Try-On at the end of 2025 after making it a signature feature for years. What does this suggest about how a business’s solution should change as its customers and channels change?
  3. Which do you think is Warby Parker’s strongest competitive advantage: (a) its low, simple price, (b) its brand and frame design, (c) its convenience (Home Try-On, stores, eye exams), or (d) its Buy a Pair, Give a Pair program? Defend your choice with evidence from the case.
  4. Online-only sellers can also offer low prices. What could Warby Parker do to keep competitors from copying its advantage?
  5. Insurance is used in about 60% of U.S. vision-care purchases but accounted for only 8.3% of Warby Parker’s 2025 revenue. Is this a bigger opportunity or a bigger challenge for the company? Why?

Application Activity

Pick a product people usually want to try before they buy, such as shoes, a mattress, or a bike helmet. Using the five stages of design thinking, propose a way to sell it online: describe the customer’s problem, write it as a “How might we…?” question, describe a low-cost prototype or test (like Home Try-On), and explain what evidence — such as pre-orders or actual purchases rather than survey answers — would show problem-solution fit.

Key Takeaways

  • Problem-solution fit starts with a real customer problem. Warby Parker’s founders had experienced high prices and inconvenient shopping themselves, and they designed a solution — direct selling at one simple price — aimed squarely at that problem.
  • Competitive advantage can come from combining lower costs with differentiation. Designing in-house and selling direct supports a $95 starting price, while convenience, design, and a giving program help Warby Parker stand out in a market it describes as highly concentrated.
  • Design thinking is iterative. Home Try-On solved an early barrier to buying glasses online, and the later addition of stores, eye exams, and contacts — and the 2025 retirement of Home Try-On — show a business continuing to test and refine its solution.

Use it in your Business Canvas Project

For the Product and Market parts of your Canvas, write your customer’s problem as a “How might we…?” question and list the evidence that real customers will commit time or money, not just say they like the idea. Then name one source of competitive advantage — like Warby Parker’s price or its try-on convenience — and explain why a rival could not easily copy it.

For Teachers

Opening activity: Ask students who wears glasses or contacts and roughly what a pair costs their family. Then ask: if you had to buy glasses online without ever trying them on, what would worry you most? Record the worries — students will see how Warby Parker tried to solve each one.

Tip: “Print case” prints the case and all questions with the sample answers hidden, so it works as a student handout.

Sources

  1. History (Our story), Warby Parker, 2026-10-16
  2. Investor Relations Overview, Warby Parker, 2026-10-16
  3. 2025 Annual Report (shareholder letter and Form 10-K), Warby Parker, 2026-04
  4. 2024 Annual Report (shareholder letter and Form 10-K), Warby Parker, 2025
  5. 2023 Annual Report (shareholder letter and Form 10-K), Warby Parker, 2024
  6. 2022 Annual Report (shareholder letter and Form 10-K), Warby Parker, 2023
  7. 2021 Annual Report (shareholder letter and Form 10-K), Warby Parker, 2022
  8. 2026 Proxy Statement, Warby Parker, 2026
  9. Buy a Pair, Give a Pair, Warby Parker, 2026-10-16
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This case was written for educational use from the public sources listed above. Warby Parker did not review it and is not affiliated with this site; company names are trademarks of their owners. This resource is independent and not affiliated with or endorsed by College Board.