Read Closing Case Two: Direct-to-Consumer: The Warby Parker Way (Highlighted in Yellow) and respond to the four questions below (note that the chapter in text only has three questions).  Be sure to use the Rubric as a guide to the requirements.

CLOSING CASE TWO

Direct-to-Consumer: The Warby Parker Way

The direct-to-consumer (DTC) space is viciously competitive and yet extremely exciting to watch as hundreds of products from razors to mattresses are attempting to dominate this space. This market has come to fruition with the invention of the Internet and mass distribution of PCs and mobile devices. The appeal of the DTC movement goes like this: By selling directly to consumers online, you can avoid exorbitant retail markups and therefore afford to offer some combination of better design, quality, service, and lower prices because you’ve cut out the intermediary. By connecting directly with consumers online, you can also better control your messages to them and, in turn, gather data about their purchase behavior, thereby enabling you to build a smarter product engine. If you do this while developing an “authentic” brand—one that stands for something more than selling stuff—you can effectively steal the future out from under giant legacy corporations. There are now an estimated 400-plus DTC start-ups that have collectively raised some $3 billion in venture capital since 2012.

For most of its history, University of Pennsylvania’s Wharton School of Business’s reputation has been built on turning out the world’s finest spreadsheet jockeys. But a few years ago, four students met at Wharton and started a company that would help ignite a start-up revolution: Warby Parker. The concept: selling eyeglasses directly to consumers online. Few thought the idea would work, but today Warby is valued at $1.75 billion, and its founding story has become a fairy tale at Wharton. Cofounders and co-CEOs Neil Blumenthal and Dave Gilboa give guest lectures at the business school—as does Jeff Raider, the third Warby cofounder, who went on to help hatch Harry’s, a DTC razor brand. Professors, venture capitalists, and entrepreneurs are fueling an entire generation of Warby Parkers.

James McKean wants to revolutionize the manual toothbrush. It’s January 2018. The 31-year-old MBA candidate at the University of Pennsylvania’s Wharton School whirls his laptop around to show me the prototype designs. Bristle, as the product might be called, has a detachable head and a colorful pattern on the handle—such as faux woodgrain, flowers, or plaid. Customers would pay somewhere around $15 for their first purchase and then get replacement heads, at $3 or $4 a pop, through a subscription service.

There are a few reasons McKean likes this plan. A Bristle subscription would be more convenient than going to CVS when you need a new toothbrush: You’d order online, set your replacement-head frequency, and forget about it. Also, Bristle brushes are friendlier looking than, say, Oral-B’s spaceshiplike aesthetic. Who knows what product will be launched next as over 400 start-ups begin tackling this market with products from toothbrushes to strollers?

Questions: 

1. Why does DTC allow a company to offer products at a lower cost than traditional manufactures?

2. What is the relationship between disintermediation and a DTC business model?

3. What types of Clickstream analytics will a DTC business want to monitor on its website to ensure success?

4. Discuss a startup that has caught your attention over this past year. Briefly describe the startup and what it expects to accomplish is it in the AI industry? the IoT industry? or?

 Your paper should include an introduction and responses to the four question in a paper format. Please do not bullet points for your answers and do not list the case questions.  Consider using subheadings and write a paper that flows from paragraph to paragraph. Use APA format (double-spaced) and cite any resources

Required Elements of the Closing Case Two: Direct to Consumer:

· Title page with your name, course, title, and date

· Responses that reflect your understanding of each of the four questions

· Writing is coherent and supports the central idea in an APA format, with correct grammar, usage, and mechanics.