Brooke Roach: Great. Thank you. And if I could just ask one follow-up, on the insurance industry dynamics, can you provide an update on the amount of new wins that you have recently had on getting more customers to be in-network with Warby Parker?
Dave Gilboa: Yes. We are encouraged by the progress that we’re making on the insurance front. In Q3, we saw higher utilization of insurance usage both from our in-network customers and continued strong usage of out of network reimbursement. Some of the new functionality that we’ve introduced, like our universal eligibility check makes it easier for customers to understand their benefits and how to use them at Warby Parker and some of the relationships with large employers and carriers that we’ve introduced over the last year. We’re seeing a stronger utilization there. So that’s encouraging. And then, we also believe that as we continue to scale, as we expand our store footprint, as we hire more doctors, we continue to be, position ourselves to be a better partner to large employers and large carriers, and are encouraged by the potential for us to unlock much bigger relationships over time.
Operator: The next question today comes from the line of Oliver Chen from TD Cowen. Please go ahead. Your line is now open.
Oliver Chen: Thanks. Hi Neil, Dave, and Steve. Regarding your guidance and what’s ahead and sort of the mixed consumer picture, what are you forecasting in terms of promotions, and how are you thinking about promotions on a year-over-year basis in this environment? And then, second, as we zoom out longer-term on the 900 store target, lots of opportunity ahead. What role will opticians play? And also, how is new store productivity helping inform that longer-term target? And why is that the right number, 900, in terms of what you see? Thank you.
Neil Blumenthal: Thank you so much for your question. This is Neil. On the consumer front and promotions in general, we’ve tried to run the business to always provide exceptional value, right? Whether that’s $95 pair of glasses all-in that would typically cost $400 elsewhere, or our progressives offering, whether that’s our standard progressives at $295 or our Precision Progressives at $395 that would cost over $1,000 elsewhere. And given that sort of exceptional value, we haven’t felt the need to offer tons of promotions. So you shouldn’t expect to see us introducing promotions during the holiday season. We do have an add a pair and save promotion that’s currently been running now for a while and that encourages folks to buy more from us and that drives UPT and AOV, and so the more you spend with us, the more you save.
But we’ll continue to ensure that everything that we’re selling is exceptional value and that price to quality ratio will continue to be unmatched. As we think about our retail rollout, we continue to be on track to open 40 stores next — this year, and we plan to continue on a similar trend next year. We — as we’ve sort of done analysis and worked with third-parties, right, we’ve identified that 900 number. There’s over 48,000 optical shops in the U.S., and there’s plenty of white space ahead of us. We continue to have no challenges hiring and training opticians. Opticianry is a licensed profession in most states and we’ve been able to develop a lot of talent internally. So not only do they have the competency and skillset around fitting glasses and expertise around lenses, but also are ingrained with our sort of culture around great customer experiences and making sure that every customer and patient feels amazing walking in and walking out of a Warby Parker store.
As we think about hiring optometrists, we still continue to be a preferred employer of optometrists. And while only 1,800 or so optometrists graduate every year, we’re not finding the challenges hiring optometrists that some other companies often speak to. So we’ll continue to create an amazing work environment for optometrists. So that way we continue to hire the best and the brightest in the field, and we’ll continue to invest in technology that leverages their expertise so they can focus on clinical care rather than administrative tasks and that also helps us on recruitment and retention of optometrists.
Operator: The next question today comes from the line of Mark Altschwager from Baird. Please go ahead. Your line is now open.
Mark Altschwager: Thank you. Good morning. I guess first off was hoping you could talk a little bit more about some of the takeaways from the new marketing campaign and just the broader re-ramp in marketing spend. Are you seeing the demand lift you would expect there? You also mentioned that you would not expect the e-commerce growth line to be linear. Wondering if that signals maybe some more choppiness quarter to-date and what your readings are there.
Dave Gilboa: Yes, thanks, thanks Mark. In general, we’ve been pleased with the returns and the response that we’ve seen from investing more in marketing in general. As we noted last quarter, our marketing efforts have kind of fallen into two categories in this last quarter, and that’s extended to Q4, where there’s the core marketing effort designed to drive transactions, and then there’s a separate effort that is our brand awareness campaign, where that really reflects a commitment to long-term investment in our brand and increasing brand awareness. And we’re pleased with the engagement and the response that we’re seeing from that campaign. The goals there are really to move some of our brand awareness metrics and not necessarily convert in the current period.
And so we need to wait a few months to look back at our brand awareness and see how much we’ve moved it. But in general, the engagement that we’ve seen on some platforms that we haven’t been doing much marketing on previously, like YouTube and TikTok. We’ve seen – we’ve achieved kind of all our engagement goals there and are pleased with the returns that we’ve seen so far. And then as it relates to e-comm, we’re confident in the overall trend line for e-comm continuing to go up and to the right. But I do expect there to be some volatility from quarter-to-quarter. And so there may be some acceleration or deceleration when looking at year-over-year growth from one period to another. That part of our business is more sensitive to marketing spend and media rates.
And as we’ve started to allocate more of our budget to experimentation and new channels, recognize that some of those things will work, some won’t, and we plan to take more shots on goal over the next few quarters than we did in the prior few quarters. And so that may be reflected in kind of some near-term volatility there. But overall, our focus on ensuring that our e-comm business is returning to long-term sustainable growth, and we certainly believe we’re on a path to that.
Steve Miller: And Mark —
Mark Altschwager: This is very helpful.
Steve Miller: We talked a little bit about this before the other factor impacting e-comm growth, and this occurs every year as we talk about making sure that we’re capturing consumer demand during the busy holiday season, there’s a fair amount of orders that we take in December, the back half of December in particular, and some of those we recognize as revenue in Q4 in December. But there are a number of them, the vast majority, actually, that will actually deliver and recognize revenue on in January and Q1 of the following year. So there’s also that element of timing involved in the pace of e-commerce growth and orders over the course of Q4 within December in particular.
