Blending simplified purchasing options, a sophisticated membership model and distribution tactics that that make highly effective use of reverse showrooming, Fabletics is taking on eCommerce giants such as Amazon.com.
In conventional showrooming, customers use retail outlets to evaluate and try on outfits and then purchase the item for cheaper on the internet. Brick and mortar shops take a major hit financially when they lose those sales to web-based merchants. The fixed costs that go with traditional showrooming such as rents, leases, mortgages, utilities and maintaining a staff are where the retail stores get hit hardest. This is further compounded by their having to mark down or declare losses on outfits that are damaged.
This is where Fabletics excels. Because of the way the firm’s membership works, customers do their initial browsing online and can either purchase online or in a retail outlet. Between 1/3 and ½ of customers that walk into a Fabletics store are already members. Of the customers that are not already members, approximately ¼ sign up. To Fabletics, it makes no difference whether the customer purchases online or at the storefront.
Combining data collected from the interactions that the customers have with the website, Fabletics is able to make fairly accurate and informed forecasts about how well a new product line will do and to have a strong basis for evaluating the performance of and making inventory decisions about existing clothing lines. The firm’s ability to maintain adequate levels of popular items, ensuring that they are in stock during peak times, has also been greatly improved.
Using preferences data collected through questionnaires during membership sign up, the company makes smart clothing recommendations that its customers can save in their online shopping carts. If customers browse or try on items in the store, those get saved to the web-based shopping cart for future consideration as well.
The numbers speak for the company’s success. Fabletics reports revenue growth of more than 35 percent annually and the company’s general manager, Greg Throgmartin attributes the firm’s $250 million in sales to their business strategy.
Fabletics was Co-founded by Don Ressler, Adam Goldenberg and Kate Hudson in 2013. The firm delivers high-quality activewear to the modern woman with an active lifestyle.
The firm reports over 1 million domestic and international VIP members. Fabletics apparel meets every fashion need from “Pilates to yoga” and every scenario from “desk to dinner.”