Kate Hudson’s new e-commerce site, Fabletics, which specializing in clothing and fashion has grown to a $250 million business in just three years. With Amazon dominating over 20% of the market, Kate’s success has been no small feat. Fabletics is capitalizing on the new trend in activewear and uses a subscription based model to attract customers. They found that customers prefer brands that push or motivate them to work out a bit harder, combined that with a convenient purchasing system and membership plan and you’ve got a recipe for success.
Big name brands have been traditionally defined by their prices and high-quality goods, but today’s trends are placing more value in other areas. Factors like outstanding customer service from the factory to your doorstep, exclusivity, and overall customer experience are becoming increasingly important to consumers. Especially with the changing economy, high value is shifting from the numbers on the price tag to brands people find unique.
General Manager of Fabletics Gregg Throgmartin believes their success to be linked with changing the image of what a high-value brand is and that’s something Fabletics has been doing since day one. He explained that they use a unique membership model that allows customers to modify their selections and personalize what they want. This customization not only gives customers a unique experience but also allows Fabletics to beat competitor pricing by nearly half. He prides their service as actually understanding customer desires and giving people what they want. With a growth rate of nearly 35% year on year, they seem to be doing something right.
Reverse showrooming has been another winning strategy for Fabletics. Generally, people would walk into stores, find what they like, then leave and buy it online for cheaper. Fabletics reverses the old model and has most of its customers already on the subscriber base before they walk into physical stores. As much as 50% of people going to Fabletics’ outlets are already members with another 25% becoming members once in the store. Fabletics does not care if the customer purchases anything in the store or which store they go to. In fact, items the customer tries on are automatically placed in their online shopping cart for later purchase.
Teri Hutcheon, a foodie, blogger, and recent Fabletics member gave her take on using the service. She explained how you fill out a survey when you join and that helps determine what kind of clothes you will receive. She really likes the VIP membership that allows you to buy your first outfit for $25 with no forced fees and customers don’t even have to buy anything. Each month you are sent customized outfits and can get a 2-3 piece set for around $50. If you choose not to buy anything, you can skip a month with no extra fees. She rated quality and style both very highly and recommended Fabletics to others simply for the great deals you will find.