Students are tasked with addressing three key questions concerning the digital business they previously explored in Task 1.3 (Warby Parker, Etsy, or Method Products), focusing on

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Digital Business Assignment 2

Digital Business Assignment

Digital Business Assignment

Q.no.1

Warby Parker uses digital technologies effectively to strengthen its market position and competitiveness in several ways formulated below to reflect core ideas related to digital transformation, competitive advantage, and positioning.

Digital Transformation

Warby Parker's business model epitomizes digital transformation (Jin & Shin, 2020). When it started, it focused mainly on a direct-to-consumer (DTC) approach anchored on its website as the primary channel of communicating its offerings. It strategically broke the conventional retail eyewear business model that involves a handful of companies setting tremendously high prices for their glasses and frames. Warby Parker eliminated the middleman approach by both designing and selling glasses online, which reduced the company’s costs and enabled them to offer glasses for a considerably lower price.

Examples of Digital Strategies

1. Home Try-On Program:

Another prominent digital advancement that Warby Parker adopted is the Home Try-On scheme (Taherdoost, 2023). The choice of five frames can come to the home of the customer, and the customer can use them for five days before sending them back. This one targets a significant online shopping barrier, shopping before purchase, and has been instrumental in their approach to customer acquisition. It combines the service of buying products online, with the comfort of feeling before buying like in normal stores.

2. Augmented Reality (AR) and Virtual Try-On:

Warby Parker incorporates augmented reality in its smartphone application where customers can try out glasses virtually through the camera. It also helps in improving the shopping experience making customers get value for their money and boosting the sales of online prescription eyeglasses since the customer is less likely to return the eyewear they bought online.

3. Data Analytics and Personalization:

The company employs advanced strategic analysis of data, particularly when communicating with customers and potential buyers. By understanding customers’ buying habits and their needs, Warby Parker can suggest to its customers options that they might find favorable (Kim, et al., 2021). This results in improving the customer experience and boosting the number of sales.

4. Telehealth Services:

Warby Parker has entered the digital health space by including telehealth services as part of its services portfolio. It means that if customers want to renew their prescriptions for lenses, they can take a vision test on their mobile devices and a licensed optometrist will review the results to prescribe new lenses. This service places Warby Parker in the retail and healthcare technology space which expands its target market.

Strategic Positioning and Competitive Advantage

Warby Parker’s positioning key lies in making them as the brand of affordable and fashionable eyeglasses with a touch of social consciousness. Digital technologies also are instrumental in supporting this positioning by offering client-segmented data and tools (Reinartz, et al., 2019). With high-quality products at lower prices being offered under direct selling and bringing value addition to customers via digital innovations, Warby Parker is unique from other eyewear-selling brands.

Alignment with Core Concepts

A good example of digital transformation is the way Warby Parker incorporated the use of augmented reality, data analysis, and telehealth services and practices that move beyond revolutionizing ordinary business processes and/or conventional customer interactions. The Home Try-On program and the virtual try-on technology are the digital improvements that give a valuable competitive advantage of saving time and building customer satisfaction. The democracy, presentation, and social engagement that Warby Parker invests in, prove its new strategic position as a contemporary, customer-oriented company. This results in strengthening its position in the market through progressive and socially sensitive actions.

Q.no.2.

Warby Parker's business model shows how firms can develop new business models for the digital economy to create, deliver, and capture value in this digital age. The used strategy brings elements of platform business, network effects, and, ecosystem relations that augment the company’s market position.

Value Creation

Warby Parker is an online retailer of affordable but stylish prescription glasses and sunglasses, a sharp contrary to the norm of most firms in the eyewear business, which markets luxury products at premium prices (Mihailovich & Taylor, 2022). This value proposition is made possible through digitalization:

1. Direct-to-Consumer (DTC) Model:

Warby Parker directly sells its products to the consumer without involving the traditional suppliers, making costs significantly low and thus able to offer cheap prices. This digitized approach disturbs existing supply and value distribution channels of retail with increased benefit value to the customer.

2. Innovative Digital Tools:

The Home Try-On program and virtual augmentation abilities represent engaging experiences that offer extra value that originates from digital surroundings. These services improve customers’ convenience because people can make orders through the Internet while gaining confidence in the fact that they can touch and feel the products before buying them.

Value Delivery

The delivery of value in Warby Parker’s model is highly influenced by digital technologies:

1. Online Platform:

Warby Parker’s brand delivery is essentially through the e-commerce site, making it much simpler to purchase eyeglasses (Aaker, 2020). With the site boasting of a user-friendly design, the digital marketing gears contribute to reaching a broad market and targeting customers appropriately.

2. Mobile App:

The app also goes a step further from other similarly styled shopping apps to add elements of AR technology including virtual fitting and vision testing. Such integration empowers mobile and makes it easier to access this service because of consumers’ new trends.

3. Omnichannel Strategy:

Warby Parker is an online retailer that has recently started opening physical stores to sell its products (Gao & Su, 2019). The implementation of such a strategy guarantees customer satisfaction irrespective of whether they transact online or physically, which in turn, increases their loyalty.

Value Capture

Digitalization enhances Warby Parker’s ability to capture value in several ways:

1. Data-Driven Insights:

Many consumers prefer Warby Parker spectacles because of their willingness to use big data to formulate a unique approach for their advertisements and spectacles. Such approaches not only improve the conversion rates but also enhance the chances of customers’ repeated usage of the service.

2. Subscription Services:

Contact lens subscriptions offer a new paradigm of ongoing usage, creating additional time-based value with customers, which increases the lifetime value.

3. Efficient Supply Chain:

Warby Parker’s supply chain is effective, with necessary aids available to make it faster, precise, and less costly. This operational efficiency directly translates into better margins, and improved customer satisfaction and can also facilitate other important tasks such as cross-selling.

Platform Business Models and Network Effects

Warby Parker’s business model may share some features of a platform business model, especially in its selling approach that is via the internet and mobile applications that connect consumers to their products and services. The network effects, though indirect, are significant:

1. Customer Reviews and Social Proof:

High customer satisfaction and an active social media presence help to increase brand recognition and customer acquisition, which, in turn, means that brand equity increases the more the product is used.

2. Ecosystem Partnerships:

Warby Parker partners with several entities such as non-profit organizations for vision care, eye-wear donation programs, and digital-health companies to offer teleconsultation services. These relationships open up new layers beyond Warby Parker’s value propositional layers of social justice and integrating health.

Q.no.3.

Warby Parker makes use of a diverse integrated application of digital technology concerns in several functional regions to innovate, optimize, and create customer values. These are key to its business and customer value delivery proposition by enabling the firm to compete effectively in a digital economy.

Marketing

1. Big Data Analytics:

One of the most important activities of Warby Parker’s is analytics of customer behavior and demand (Fitzgerald, 2019). With the value of website traffic, mobile application data, and social media, the company can develop effective marketing strategies and product promotions for consumers. This approach is useful in helping marketers achieve better results and greater conversion as more customers turn into brand advocates.

2. Artificial Intelligence (AI):

Machine learning algorithms are used to target the right ad and analyze the standing of an organization’s marketing mix (Ngai & Wu, 2022). Predictive algorithms from machine learning prompt accurate and efficient marketing trends and customer preferences to market effectively.

Supply Chain

1. Inventory Management Systems:

Warby Parker employs advanced inventory management systems that leverage big data to predict demand and optimize stock levels. This ensures that popular products are always available, reducing stockouts and overstock situations, and thereby improving operational efficiency.

2. Supply Chain Analytics:

Since the use of analytics can help Warby Parker to optimize supply chain processes, it will be possible to deliver the eyewear products on time. This again helps to minimize the lead times and the general improvement of the supply chain such that clients receive their products as soon as possible.

Customer Service

1. E-commerce Platforms:

Warby Parker’s primary way of interacting with customers is one of the most effective, which is through an advanced online store. Both the computer version of the site and the app version give buyers a smooth purchasing journey from the moment they start browsing to the moment they finish checking out. Services such as Home Try-On and virtual try-on through a new innovative technology by Augmented Reality help the customers experience the product before making a purchase.

2. Customer Relationship Management (CRM):

CRM systems refer to the methods that are used to address the clients and process the information related to them at different stages of their lifecycle in Warby Parker. This is useful in customer treatment, customer complaints handling as well as partnering with customers for long-lasting associations.

Omnichannel Strategy

The omnichannel approach of Warby Parker means that customers are offered both online and offline experiences and the two are consistent with each other. Physically having stores also enables customers who choose to shop online to pick up their products in the store, exchange products, or simply physically interact with the products.

1. In-Store Technology:

In physical stores, Warby Parker uses digital tools such as tablets for sales associates to access customer profiles, order histories, and preferences. This helps in delivering targeted services, and a continuity between online and offline purchases.

2. Telehealth Services:

The integration of telehealth services for vision tests shows Warby Parker’s innovative use of digital technology in customer service. Customers can renew prescriptions online, which results in adding convenience and strengthens customer loyalty.

Effectiveness Evaluation

The use of these digital technologies has proven highly effective for Warby Parker:

· Innovation: Technologies like AR and AI keep Warby Parker at the forefront of retail innovation, offering unique customer experiences.

· Efficiency: Advanced analytics and inventory management systems streamline operations, reducing costs and improving supply chain efficiency.

· Customer Satisfaction: Personalized marketing, seamless omnichannel experiences, and convenient services like telehealth significantly enhance customer satisfaction and loyalty.

References Aaker, D., 2020. Winning against a dominant brand. Journal of Brand Strategy, 9(2), pp. 103-112. Fitzgerald, C., 2019. Reaching Beyond the Four Walls. American Bankruptcy Institute Journal, 38(8), pp. 34-59. Gao, F. & Su, X., 2019. New functions of physical stores in the age of omnichannel retailing. Operations in an Omnichannel World, pp. 35-50. Jin, B. E. & Shin, D. C., 2020. Changing the game to compete: Innovations in the fashion retail industry from the disruptive business model. Business Horizons, 63(3), pp. 301-311. Kim, N. L., Shin, D. C. & Kim, G., 2021. Determinants of consumer attitudes and re-purchase intentions toward direct-to-consumer (DTC) brands. Fashion and Textiles, 8(1), p. 8. Mihailovich, P. & Taylor, C., 2022. Category of One’Branding: A Clear Competitive Advantage?. IUP Journal of Brand Management, 19(4), p. 88. Ngai, E. W. & Wu, Y., 2022. Machine learning in marketing: A literature review, conceptual framework, and research agenda. Journal of Business Research, 145, pp. 35-48. Reinartz, W., Wiegand, N. & Imschloss, M., 2019. The impact of digital transformation on the retailing value chain. International Journal of Research in Marketing, 36(3), pp. 350-366. Taherdoost, H., 2023. E-Business Models and Strategies. E-Business Essentials: Building a Successful Online Enterprise, pp. 25-50.

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