Fabletics has done the impossible; it has made Amazon scared. At one time, Amazon had owned a 20% market share in fashion e-commerce, that is, until Fabletics came along.
Fabletics is the athleisure company owned by Kate Hudson, and it has grown more than 200% over the last three years and is now valued at $235 million. In one year, Fabletics has opened sixteen physical stores across several states and is looking to expand into Canada over the next few years. It has taken over some of Amazon’s market share, and that trend is looking to continue as we move into 2018 and beyond.
The reason Fabletics has been so successful is that Kate Hudson has shifted the paradigm of the consumer. She stopped thinking of business as selling somebody a product and started thinking about it as a consensual transaction that positively impacted both sides. This shift was cemented when Hudson began treating customers as lifetime friends. This treatment of customers has had several beneficial consequences for Fabletics.
Firstly, Fabletics came about during a time when customer trust was at an all-time low. The consumer saw the corporation as a heartless steel giant that only cared about making cheap products at cheaper costs. Kate Hudson came and began telling women they mattered, that they were beautiful, and that they could accomplish anything they set their mind to. Kate Hudson showed how Fabletics was meant to empower every individual woman. By doing this, customers began to trust that Fabletics and Kate Hudson had their best interest in heart and trust in Fabletics increased until over 95% of customers say that trust Fabletics explicitly.
Secondly, Fabletics came about during a time when customer loyalty was at an all-time low. The consumer began to figure if corporations were just going to try and swindle them then they, in turn, would do their best to find the cheapest product wherever they could. This resulted in a phenomenon called showrooming. Showrooming occurs when a customer sees a product online but wants to check it out before purchase. The customer will then go to a physical store, examine the product and purchase it later online. Fabletics stopped this by creating customer loyalty through locally organized exercises and activities. Now, over 50% of those entering her stores are already customers.
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What happens when you use a mix of the clever business model, smart branding and membership program, strategic positioning with exclusive activewear? You end up with a brand like Fabletics by Kate Hudson which becomes an instant success and starts to compete with online giants like Amazon. It is not a mere story rather the saga of Fabletics that has captured a huge activewear market share from Amazon, and it is still going strong. This brand has already become a $250 million-dollar business within its first three years, and there is a mix of creative tactics behind such an unprecedented success.
Fabletics is one of the most popular and trendy “Athleisure” brands that sells sportswear, accessories as well as gears for both the male and female segments. However, it is more than an activewear brand as it comes with first of kinds membership offering exclusive outfits which are precisely selected for them based on the member’s lifestyle and preferences. This online subscription retailer was founded on October 1, 2013, by Kate Hudson, Adam Goldenberg, and Don Ressler as a subsidiary of JustFab. In addition to its online store, the company also has a number of shops in some of the most exclusive places in the USA including New Jersey, Las Vegas, North Carolina and much more. In addition to these, the company also uses pop-up stores in different cities for promotion purposes as well. It has a unique membership program which is actually free. However, if the members skip purchasing, they are charged with $49.95 per month, and it is converted into lifetime store credit.
Along with its unique membership subscriptions, Fabletics has some strategies that have made this brand a huge success. Among those, their “Reverse Showrooming” concept is truly groundbreaking. The consumers usually visit their website in the first place and then go to the store to make the purchase and Fabletics actually encourage this as it builds a stronger relationship with their clients. It is also convenient for the clients to research about the products they want to buy and then actually purchase it from the shop. In addition to reverse showrooming, Fabletics is also quite tactful in using the customer data they have collected through surveys and purchases. Based on this, they stock their shops with products and activewear which are in demand. While most of the brands heavily stock up their stores with random items, Fabletics only keeps a line of items that their customers are looking for. This has been possible just because they use their data more intuitively. They use the same data to focus and develop a better focus on accessibility, people and culture. By using the specific data, they know their clients very well and prepare their promotion which is specific and strategically targeted. These are the reasons; Fabletics is doing so good and competing directly with Amazon.