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How Warby Parker changed the way you buy glasses

It's the start-up that is changing the way people buy eyeglasses.

It's called Warby Parker, and the concept is simple: Designer eyeglasses for less than $100. You can buy them online. You can buy them at a Warby Parker store. And for every pair you purchase, a pair of glasses is donated to a person in need. But can Warby Parker disrupt not just an industry but an ingrained consumer habit?

After all, many consumers probaby don't realize, when they shop for glasses - prescription or sun - choice is limited. That's because Italian bohemoth Luxottica owns just about every luxury sunglass and eyeglass brand out there - Burberry, Chanel, Coach, Persol, Ray-Ban and Tory Burch to name a few. It also owns more than 10 of the most popular eyewer retailers in the U.S. as well, including LensCrafters, Pearle Vision, Sunglass Hut and Glasses.com. Consumers are easily dropping upwards of $300 buying many of those brands in many of those stores.

The Warby Parker business model aims to change that. Warby Parker was launched in 2010 by four co-founders who met as students at The Wharton School at the University of Pennsylvania in Philadelphia. Co-Founder and Co-CEO David Gilboa sat down with Yahoo Finance’s Editor-in-Chief, Andy Serwer, at the Milken Global Conference last week to talk about the company's quick rise.

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Warby Parker started out online but the company has branched out into retail locations. Its flagship store opened in SoHo in New York City in 2013. Today, Warby Parker has 12 brick-and-mortar locations with plans to open eight more this year. Warby Parker recently raised a new round of funding, putting its valuation at an eye-popping $1.2 billion.

Gilboa says the business idea came from the common frustration among business school friends with the eyeglass buying process. His classmates had all had similar experiences losing glasses or not replacing old glasses because they didn’t want to spend several hundred dollars for "technology that has been around for 800 years."

“We looked at this massive industry-- $100 billion globally—that really hadn’t had much innovation on the product side or distribution side. No one was successfully selling glasses online but we thought there was an opportunity to create our own brand and sell glasses directly to consumers."

How do they offer lower prices? Gilboa says, “by cutting out all the middle men and all the unnecessary mark ups.” Warby Parker designs and produces all of its eyewear and essentially sells the glasses "wholesale" to the consumer, the company says.

So what's the catch? For one, buying glasses online may seem almost counterintuitive to consumers. Eyeglass shopping has long meant you try on multiple glasses in the store in front of the mirror. But Gilboa says, customer service is what the company focuses on - so free shipping, free returns and free home try-ons are standard.

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Also, the Warby Parker style might not be for everyone. The word "hipster" gets thrown around some times.  And the name of the company comes from the blending of two character names from a Jack Kerouac novel.

Another criticism of the company? Part of the business model: customers have to go get eye exams some place else and bring prescriptions to the site or store locations. That sometimes means using a competitor's optometrist, but not buying glasses there. Warby Parker is working to solve that issue, too.

"We require valid prescriptions for all of our customers. So in our stores where we are allowed to, we employ optometrists. So you can go and you can book an eye exam, walk in and you know get your prescription in one of our stores," Gilboa says. "In other cases, we can call your doctor to get your prescription or you can scan it and send it to us. If it’s expired or we need other measurements, we’ll require that you go to another doctor but we find that most customers end up coming back and closing that transaction,” he says.

Gilboa says Warby Parker is exploring a number of different paths to ease the process of getting an eye exam and buying glasses. Technology is the answer, he says. “We’re very optimistic that there will be tools that make it easier for consumers to get eye exams in the future."

And what else is in the future for Warby Parker? With that recent round of funding and billion dollar valuation, is an IPO to come? "Right now, we're really focused on providing value to our customers and we think the best way to do that is staying an independent company," says Gilboa. "We have very patient investors and have plenty of capital on our balance sheet so right now have no plans to go public."

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