Succeeding in Fashion when Amazon currently controls 20% of the fashion e-commerce market is no mean feat but that is what Kate Hudson’s Fabletics is doing, growing a 0 million business in three years. Part of the growing ‘activewear’ movement, Fabletics uses a subscription mechanic to sell clothing to its customers. The premise is simple, customers like brands that are aspirational and that push the individual a little, mix this with convenience and membership and you have a powerful combination.
High value brands have historically been defined by price and quality of the goods or services but recently a shift in economics means this combination is no longer enough to be competitive or guarantee success. Instead, things like last-mile service, customer experience, brand recognition, exclusive design and gamification elements are increasingly important to the new determiners of what is high-value to the modern consumer.
Likening themselves to Apple and Warby Parker, Fabletic’s strategy and positioning is paying off for the fashion membership brand as they will be opening more physical stores this year adding to the sixteen that are currently open in places like Hawaii, Illinois, Florida and California.
So what’s the secret? Gregg Throgmartin, General Manager, Fabletics thinks it’s building a modern and reimagined version of ‘high-value brand’ from day one; “Our membership model is what allows us to offer personalized service and on-trend fashion at half the price of our competitors. It’s just a lot easier to make people happy when you know who they are and what they want.”
THREE WAYS FABLETIC'S "DO" PHYSICAL STORES DIFFERENTLY
1) Fabletics encourages “reverse showrooming”
Unlike counterparts who are “getting killed” by showrooming, where people browse offline but then buy items cheaper elsewhere, Fabletics have reversed the model because of the unique way they started out. Instead of a negative, Fabletics have turned browsing into a positive. Fabletics could have gone the pop-up store route but their current strategy enables them to build relationships, be relied on and get to know the local markets even better through events and other activities. As a result, 30-50% of the people that walk through the door are already members, and another 25% become members in store. When a customer is shopping and tries and article of clothing on, it goes into their online shopping cart as well. Fabletics does not care where the customer buys in store, retail is just another element of service.
2) Online data is at the heart of the retail strategy but success isn’t just because of the data
Fabletics understands that showing the right content in the physical as well as digital is imperative in order to not destroy the customer’s brand journey. Using online local data about preferences means that physical stores will only stock items that are likely to appeal to them which can be tweaked as trends change and tastes change. Stores are stocked based on various inputs including membership preferences for local members, social media sentiment, store heat-mapping data and real-time sales activity. “Serendipity of shopping is important to us but the brand is built on combining global fashion trends with user preference data to elevate satisfaction, we add in new ranges and do subtle tests all the time.” says Dustin Netral, SVP Operations for Fabletics.
3) Growth is due to a focus on accessibility, people and culture
Fabletics is not without its challenges but as the company evolves and moves into new territories (and with new competitors) the balance of lifestyle, consumer education and customer experience seems to be paying off. “The growth rate for the brand from 35% year over year“ per Shawn Gold, Corporate Marketing Officer for parent company TechStyle Fashion Group. “Growth is a factor of having a quality product at a great price, an authentic spokesperson and in-house media and creative teams that scale Fabletics across 10 counties based on data science and return on investment”, he added.
Fabletics can be listed among a growing army of nimble, data-aware and risk-positive brands who understand the “new” consumer. Whether it is smart distribution, fast purchase options and innovative membership programs, brands such as Fabletics aren’t without challengers and challenges from all sides. But investing in physical retail experience and embracing a new type of showrooming Fabletics seems ready to shoot every bullet in its arsenal to give the consumer the perfect experience whether that is online or offline.
It is impossible to build a fashion brand in 2017 without considering how you will compete with Amazon. There is also a wave of fast scaling e-commerce companies like Fabletics, Warby Parker and Bonobos that have figured this out. Like Fabletics they are defining themselves with exclusive product, enterprise technology, data science, and scaling their companies with ROI based media and creative.
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