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16 August 2022
Warby Parker ‘normalises’ marketing spend
Omnichannel retailPharmacies & drugstoresUnited States
Warby Parker, the eyewear company, will “normalise” its marketing spend to pre-pandemic levels, a shift driven in large part by consumers returning to its brick-and-mortar stores.
Why it matters
The COVID-19 pandemic led many brands to adjust their marketing budgets as physical stores closed and shoppers made a greater amount of purchases online. As consumers return to many of their old habits, however, brands will need to reassess spending patterns accordingly.
While Warby Parker initially rose to prominence as an online direct-to-consumer brand, by the end of its last trading quarter, the brand had over 175 physical stores.
Steve Miller, its chief financial officer, said on an earnings call that its marketing budgets were shaped in part by the varying economics of online versus offline retail.
“In general, we tend to see that our e-commerce business is more highly correlated with marketing spend and performance marketing dollars,” he said.
By contrast, “our stores serve as billboards and don't need as much marketing support,” Miller added.
As consumers switched online during the pandemic in 2020 and 2021, the brand “elevated our marketing spend as a percentage of revenue” accordingly.
However, as the sales mix now more closely resembles that from 2019, before the onset of COVID-19, Warby Parker is refining its marketing strategy.
“We are normalizing back to a level that we observed pre-pandemic that we think matches the business mix,” said Miller.
As a percentage of revenue, that means a drop from 15.6% in the second quarter of 2021 to 13.8% in the same period in 2022. Long term, the aim is to reach the “12% level that we were at pre-pandemic,” Miller said.