Warby Parker ‘normalises’ marketing spend | WARC | The Feed
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Warby Parker ‘normalises’ marketing spend
Omnichannel retail Pharmacies & drugstores United 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.
Sourced from Seeking Alpha
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