It is quite difficult to succeed in the online fashion market considering that Amazon has a 20% stake in the industry. Nonetheless, Kate Hudson’s Fabletics has gained a significant stake in the market. The company is currently valued at $250 million. For the past three years, it has been registering remarkable sales amid stiff competition from more established online retailers.
Fabletics is regarded as an industry leader in the activewear market, which has been gaining fast popularity. The retailer sells its clothing through a subscription platform. The idea behind this is that customers like inspirational brands. The company mixes this with membership and convenience to customize each client’s order. This is what has enabled Fabletics to gain traction in a competitive and dynamic industry.
Emphasis on High Value Brands
Generally, high value brands are defined by quality and price. However, there has been a paradigm shift in recent years that is challenging this idea. The quality of goods and services, and high prices do not necessarily guarantee success in isolation. Instead, things like customer experience, last-mile service, brand recognition, and exclusive design have become the main determinants of value among modern consumers.
Fabletics’ strategy can be likened to Warby Parker’s or Apple’s. It’s positioning is already paying off because it operates 16 outlets in strategic locations in California, Illinois, Florida, and Hawaii. It plans to open more outlets in order to diversify its portfolio. Fabletics is equally seeking to venture into major European markets through strategic partnerships with companies that already have a footprint there.
The Secret Behind the Success
It still baffles many people how Fabletics has managed to establish itself in the fashion industry within a short time. The company’s general manager, Gregg Throgmartin points out that this has been possible due to a strong commitment towards building an eccentric and redesigned form of “high-value brand” since day one. The membership model that Fabletics adopted enable it to provide on-trend fashion and personalized services to its clients at half the price. He adds that it was easier to keep the company’s clients happy since their preferences are known.
Fabletics has also been encouraging “reverse showrooming” in its physical outlets. Traditionally, online fashion retailers allow clients to browse offline but buy items elsewhere at a cheaper price. At Fabletics, customers have a positive shopping experience that helps the company to build reliable relationships. Due to this, up to 50% of clients who visit the website at any time are subscribers. Whenever customers are shopping and try out an item, it automatically goes to their shopping cart irrespective of whether they will buy it or not.
Fabletics in Brief
This fashion e-commerce retailer was co-founded by Don Ressler and Adam Goldenberg in 2011. The duo wanted to provide fashion enthusiasts with high quality items at a cheap price. Its subscription model means items that match clients’ preferences are sent to them every month. Thereafter, the price of these items is automatically deducted from their credit cards. Since its inception, Fabletics has been funded by different venture firms including Matrix Partners and Rho Ventures.