The Washington Post - USA (2022-02-20)

SUNDAY,FEBRUARY 20 , 2022 .THEWASHINGTONPOST EZ EE G5

expectthattochangeovertime?

A:Whenwe started Warby

Parker back in 2010, we were

purelyonline.We started to open

up stores becausewe realizedso

muchof the market wasstill in

bricksand mortar.Amajorityof

our transactionswere taking

placeinsidethe four wallsof

stores before the pandemichit,

and then it flip-flopped.Nowit’s

sortofflip-floppedback to being

in bricksand mortar.But wedo

find thatamajorityofour

customersare interacting with

us both onlineand in stores.

Q:Whatdoes Warby Parker plan

to do to stay relevant?

A:Whenever we’refaced with a

challengeorthinkingthrough a

solution,firstwelook at other

industries,companiesor

organizationsthatmay have

tackledthis before. Is therestuff

thatwecan learnfrom them?

But then also lookingat if you

weretodosomethingcompletely

from groundzero, whatwould

thatlook like? We’vetried to

infusethis mentalityintothe

culture of the companytoensure

thatwe’realways getting better.

Customers’expectationsare

always increasing,soweneed to

be constantlydeliveringareality

thatisahead of those

expectations.

Q:Who do you see as your

biggest competitor,and how do

you plan to fend themoff?

A:We’ve seen so manyWarby

Parker copycats out there.

Thankfullyveryfew of them

have gotten anytraction. Ithink

that’sbecausecustomerswantto

shop with authenticbrands in

the ageofthe Internet. Our

biggest challengeisactuallynot

competitors.It’s justletting

peopleknowthatweexist.

Q:Whatrole does tech playin

your path to profitability?

A:Warby Parker is profitableon

an adjusted EBITDA[earnings

before interest, taxes,

depreciation and amortization]

basis,and we foundthat

technology[helpsdrivesales for

us]. It helpsus serve customers

better,expands customer

lifetime value, but it [also]makes

us moreproductive and efficient.

It’s reallyimportant to investin

technologythatmakes our team

membersmoreproductive [like

the company’spoint-of-sale

system thatallowsworkers to

quicklyaccesscustomers’history

and preferences]but also to be

investing in R&D thatmay

translate into innovations in

yearsto come.

diagnostic tests thatatthe

moment,you can only do in

personto checkon certain types

of eyedisease.But this is agood

solutionfor somefolks who need

to renewaneyeglassorcontact

lens prescription.Ithink that

over time,thesetools will grow

moresophisticated, and we can

do morediagnostic tests. Idon’t

knowif you’lleverbeable to

completely replacegoing in and

seeingsomebodyin person.

Q:HasWarby Parker’s virtual

try-on feature madeanymaterial

differencein sales?

A:We foundusageincreased

tremendouslyduringcovid.We

foundthatpeoplewere using

thattobuy immediately online,

but theywould alsouse it to help

preparefor avisittothe store

becausemaybe theywant to

spendless time in the store.

We’veseen an increasein

conversionrates and reductions

in return rates.

Q:Whattech featuresdo you

expecttotestinthe near future?

A:You’ll seeuscontinueto

investintelehealthand tools for

eyedoctors. One of the reasons

whysomanyoptometrists love

workingat Warby Parker is they

gettofocus on clinicalcare

rather than administrative work,

and thatleads to better patient

experiences.

WarbyParker’sfuture

Q:Are mostofyour sales online

or in stores, and how do you

did was bringon experts to help

adviseus to makesure thatwe

were always makinginformed

decisions.That helpedus come

up with the rightstrategiesfor

our differenttypes of team

members,whether theywere

workingin the office, in our

stores or in our manufacturing

facilities.My pieceof adviceis

always find the bestexperts, and

find themearly.

Investingintech

Q:Whattechnologieshave you

foundto be the mosthelpful?

A:We’vebeen reallyinvesting

over the lastdecadein our

telehealthcapabilities.An

exampleis our virtual vision

tests. [The] Warby Parker app

enablespeopleto do avision test

from home,and then we’reable

to give themglassesor contacts

prescription.This was always

neededbecauseit’s more

affordableand moreconvenient.

But it was absolutelycrucialover

the lasttwo yearsof the

pandemicwhenalot of people

weren’t able to go to their

doctor’s offices. It’s been greatto

buildprojects thatleverage

cameras and audiobut also

distancedetection and vision

technology.

Q:Are virtual visiontests

differentfrom eyedoctor visits?

Are theyinterchangeable?

A:Ourvirtualvision testisn’t a

replacementfor a

comprehensiveeyehealthexam.

Forexample,thereare certain

A:We’vebeen prettyfortunate

thatwehaven’t facedsomeof the

largesupplychainissuesthata

lot of otherbrands have. Part of

thatisbecausewe controlalot of

our supplychain.We have two

manufacturingfacilitieshere in

the U.S. wherewe cutlenses,

insertthemintoframes and ship

to customers.And we haven’t

seen alot of the laborshortages

thatother companieshave seen

becauseof how we handledthe

pandemic.We actuallyclosed

our manufacturingfacilitiesand

reworked thembasedon the

knowledgeofhow covidwas

beingtransmitted. We

introducedmasks,introduced

symptomcheckers, adjusted the

production line to ensurethat

therewas safe distancebetween

teammembers[and]brokeup

shifts. That created goodwillthat

enabledus to retain core talent

to ensurethatwedidn’t run into

thosesupplychainchallenges.

Q:Whatisyour biggest

challengeright now?

A:Thebiggest challenges

operating in this environment

are reallyarounduncertainty.

Younever knowwhen another

variantis going to comeand how

thatmay drasticallychangehow

teammembersare able to show

up to workor how our customers

are going to shop.

Q:Anyadvicefor otherCEOson

how to plan for the future of

work?

A:One of the thingsthatwe

the industry. Thefollowinginter-

viewhas beeneditedfor length

and clarity.

Pandemiclearnings

Q:Howdoyou envisionthe

futureof work?

A:We believethatthe future of

workisgoingtobemoreself-

directed andflexible.The old

[idea]thatyou needtobeinthe

office five days aweek,eight-plus

hours aday,it’snot absolute.

We’veall demonstrated thatwe

can be highly productive from

home.That doesn’tmeanthat the

pendulumshould swingand

businessesshould notreturn

their teamsto the office, but

maybe five days aweekisn’t

sacrosanct.The question is, what

is the minimum amount of in-

person interactionthatyou need

to ensure thatyou have an

engaged team? Idon’tthink it’s

five days aweek.

Q:What’sthe return-to-office

plan for your corporate

employees?

A:We have afew different

flavors. We have in-personfor

our workplaceoperations and

facilitiesteamthatneeds to be in

the office five days aweek. We

have ahybridstructure, where

folks are expected to be in the

office Tuesday, Wednesday,

Thursday, but can workremotely

on Mondays and Fridays. [They

also have] afour-weekremote

optionwheretheycan actually

workfrom homefor up to four

weeksover the courseof the year.

[And]we have afully remote

option.However,we’ve limited

the numberof roles thatwe’ll

have fully remotebecausewe do

thinkthatthe culture of beingin

office is so critical.

Q:Howhas Warby Parker dealt

with supplychainissues?

whenemployeescouldsafelyre-
turn. To help guidethe company’s
officereopeningdecisions,Warby
Parker broughthealthexperts to
the table.Theresult?Corporate
offices thatoperatewithmuch
more flexibilityfor employees
and healthand safety protocols
for its opticallabs and stores.
Having business continuity de-
spitethe pandemic-related chal-
lenges was vital, especially when
consumersreliedheavilyonvirtu-
al servicessuch as telehealth and
online ordering —two areasWar-
by Parker continues to investin.
Blumenthal says the company en-
visionsafuturein whichvirtual
servicessuch as telehealth and
augmentedrealitycouldbeacom-
mon waypeopleget their next set
of contactlensesorglasses.
Warby Parker started as an
online brand in 2010 with its
direct-to-consumerbusinessthat
helpsprovidecorrective lensesat
lowerpricesthantraditionalre-
tailers.It also donates apair of
glassesfor everypair it sells.It
has invested heavily in technol-
ogyand has developedfeatures
such as virtual try-on,whichuses
augmentedrealitytohelp people
see how theymay look wearing
differentstyles of glasseson the
Warby Parker app.Thoughthe
companystill has along wayto
profitability—mostrecentlyit
reported aquarterly loss of $91.1
million—Warby Parker says in-
novation remainsapriority, with
tech workers representing its
largest corporateteam.
“Wefound thatanin-house
technology team is absolutely
critical,” Blumenthalsaid.
Thecompany, whichwentpub-
lic lastyear,now employs more
than 3,000workers at 160 bricks-
and-mortar stores in the United
States and Canada,and twoman-
ufacturingfacilities.Revenuefor
itsfiscalthirdquarterendedSept.
30 rose 32 percentfromayear
earlierto $137.4 million.Itsactive
customersgrew23percentfrom
the sameperiodin 2020to 2.15
million.But its stock pricehas
droppedabout40 percentsince
the company’sdirectlisting,and
its quarterlynetloss has more
than doubled year-over-year,
someof whichis due to listing-re-
lated expenses.
Despiteits challenges, Blu-
menthalsays,WarbyParkerplans
to continueinvesting in the re-
searchand developmentof tech-
nologiesthatcouldaid optome-
trists and consumerswho need
corrective lenses. Here’s what
Blumenthaltold us about the
futureofworkandtheoutlookfor

FUTUREOFWORKFROMG1

At Warby Parker, aflexible vision in the coronavirus era

ISTOCK/WASHINGTONPOSTILLUSTRATION

WARBYPARKER

ManyCEOsarenow“armchair

epidemiologists,”WarbyParker

co-CEONeilBlumenthalsays.

who said theyworkedat

nontraditionaljobs —gig

workers, freelancers,sole

proprietors, daylaborers.The

vast majoritydidn’tparticipate

in aworkplace planduringthe

year leadingup to the survey.

“If giventhe opportunity,

manyworkers will save,”Pew

said.

This is true. Whenemployers

automaticallyenrollemployees,

theycontinueinvesting.The

mostcommondefault savings

ratefor auto-enrolledemployees

is 3percent,accordingto

Fidelity. Butagrowingnumber

familieshave retirement

accounts,accordingto Federal

Reserve data from 2019, the most

recentavailable.Only

34.9percentof Blackfamilies

and 25.5 percentof Hispanic

familieshave such accounts,

comparedwith 57.2 percentof

Whitefamilies.

Millionsof workers without

employer-providedretirement

savingsplansstruggle to save for

retirementor face the prospectof

not beingable to retire at all,

accordingto asurveyfromPew

CharitableTrusts.

Pewsurveyed 1,000workers

born between 1997 and 2012)

increasingtheir retirement

contributions—53percent

increasedtheir contributionrate

lastyear.Investing earlyand

letting compoundingworkfor

themis key.

Even as the economywas

strugglingto cope with covid-

related downturns,employers

kept offeringworkers matching

contributionsto their retirement

plans.Theaverageemployer

contributionlastyear reached

$4,080,accordingto Fidelity.

Still, the good news from

Fidelityneeds to be weighed

againstother data thatshowsa

differentsituation for folks not

benefiting from the stock market

and employer-sponsoredplans.

They arebeing left behindin the

accumulation of wealththatcan

carrythemthrough retirement.

If theydon’tcatch up, theywill

be morelikely to be left living

entirelyon SocialSecurity, which

is having its own issueswith

solvency.

“We knowthatmanypeople

are still strugglingwith the

economicimpacts of the last

coupleof years,”Jagatic said.

Only slightlymorethan half

(50.5 percent)of all American

334,000ayear earlier.The

numberof IRAmillionaires

increased30 percent,from

288,300 to 376,100, for the same

time period.

Thenumberof millionaires

investing in the ThriftSavings

Plan also sawsurged, by nearly

50 percent.As of Dec. 31, there

were 112,880TSP millionaires,

up from 75,420 ayear ago,

accordingto the Federal

RetirementThriftInvestment

Board.

Forthe fourth quarter,

accountbalancesalso ballooned,

Fidelitysaid.

Itsaverage 401(k) balance

increasedto arecord$130,700 in

the fourth quarter,up4percent

from the previousquarter and

8percentfrom ayear ago. The

averageIRA balancewas down

slightlyto $135,600for the

fourth quarter comparedwith

the thirdquarter.But IRA

balanceswere up 6percentfrom

the 2020fourth quarter.

Arecord38 percentof

individualsincreasedtheir

401(k) contributionsin 2021,

with an averageincrease ofmore

than 3percent,Fidelitysaid.

It was wonderful to see

younger GenZworkers (people

of companiesare pushingthis

rateup. Of the Fidelity401(k)

plansthatauto-enrollemployees,

nearly37 percentautomatically

enrolledemployeesat a5percent

or highercontributionrate.

There’s still an opportunityto

save for retirementif you don’t

have aworkplace plan. Workers

can contributeto an IRA, with a

maximumannualcontribution

for 2022 of $6,000.If you’re50or

over,you can contributean

additional$1,000to an IRAina

catch-upcontribution,for atotal

of $7,000.

Yet, we knowhaving the push

from employerscan makeahuge

difference.

“With workplaceplans,Ithink

one of the majoradvantages

often is employersare giving

matches,whereasyou are not

getting thatmatch throughan

IRA,”Jagaticsaid.

Althoughthe numberof 401(k)

millionairesin the plansthat

Fidelitymanages is arelatively

smallpercentage—2percentout

of 20.4millionaccounts—the

growthis still staggering.Asof

Dec. 31, out of 12.3millionIRA

accounts,3percentof investors

had $1 millionor more.

Many investors fear missingout

on the next greatthing.Other

investmentssuch as

cryptocurrencyhaveamore

excitingfeel to them.“Fortune

favors the brave,”actor Matt

Damonsays in acommercial

peddlingan app wherepeople

can trade digitalcurrenciessuch

as bitcoin.

But as the Fidelitydatashows,

boringhas worked to makea

wave of workers wealthyinafar

less riskyway.

Andrew VanDam contributedto this

column.

Meet the newly
minted
millionairesnext
door.
They didn’tput
all their money
into aMicrosoft-
type stock that
madethemrich.
They didn’ttakea
chanceon
speculating in
cryptocurrencywithits crazy
volatilityorstartabusinessthat
theythensold to some
billionaire.
No,manycurrentmillionaires
are governmentworkers, civil
servants, educators, military
service members(or retired
military), managers or co-
workers clockingin justlikeyou,
leaving at the end of ashifttorun
and pick up their kids from
school.Many neverearnedsix-
figure salaries.
They’vebeen investing for
nearlythreedecades,taking
everydollar offeredby their
employersin matching
retirementplan contributions.
They also don’tcashout their
retirement savingswhenthey
changejobs.
And, mostimportantly,they
didn’tletapandemicor the
related economicproblems,or
skittish investors, scarethem
away from the stock market.
In itsquarterly retirement
analysis,FidelityInvestments
reported thatits numberof IRA
(individualretirementaccount)
and 401(k) millionaireshit an all-
time high.Likewise, the number
of millionairesinvesting in the
ThriftSavings Plan (TSP), the
federal government’s versionofa
401(k), also spiked significantly.
Whatittells us is thateven
amid economicuncertainty,
peopleare still focused on their
retirementsavingsgoals, said
Jason Jagatic, head of workplace
thoughtleadershipfor Fidelity.
Fidelity, oneofthe largest
managers of workplaceplans,
reported thatits numberof
401(k) millionairesin the fourth
quarter of 2021 jumped
32 percentto 442,000,up from

Crypto-what? Boring IRAs, 401(k)s can make millionaires.

Michelle
Singletary

THECOLOR
OFMONEY

Stockmarketmillionairesproliferateamidpandemic

Retirement-accountmillionaireswith Fidelityplans

200,000

0

400,000

600,000

800,000

2017 Q1 2018 Q1 2019 Q1 2020 Q1 2021 Q1

401(k)millionaires IRA millionaires

Source:Fidelity THE WASHINGTONPOST

Not everyonehas retirementaccounts

All families 50.5% $65,000

Percentileof

income

Bottom20% 10.7% $13,000

Second-lowest20% 33.0% $17,000

Middle20% 53.8% $28,000

Next-highest20% 69.5% $60,000

Second-highest10% 80.4% $136,000

Top 10% 90.6% $460,000

Education

No high schooldiploma 18.7% $20,000

High schooldiploma 41.2% $40,000

Somecollege 44.4% $42,000

Collegedegree 71.0% $119,000

Race or ethnicity

White 57.2% $80,000

Black 34.9% $35,000

Hispanic 25.5% $30,000

Otheror multiple 52.7% $47,000

SHAREWITHRETIREMENT

ACCOUNTS, 2019

MEDIANRETIREMENT

SAVINGS, 2019

Source:FederalReserve THE WASHINGTONPOST

Note:The S&P 500 has risenmorethan50 percentsincedata was collectedin 2019.

If you have apersonalfinance

questionfor Michelle,pleasecall 1-

855-ASK-POST(1-855-275-7678). Her

award-winningcolumnTheColor of

Moneyis syndicatedby The

Washington Post NewsService and

Syndicateand carriedin dozensof

newspapers.