Fabletics, the athletic apparel brand launched by movie star Kate Hudson in 2013, has reached new levels of success as the result of innovative business strategies and consistently high standards of quality. Earning an amazing $250 million in its first three years, the company is greatly outselling Amazon in the fashion department.
The company started out as an online subscription service. The Fabletics website contains endless amounts of cute and stylish athletic apparel items ranging from sweat-resistant sports bras to cute little jersey dresses that can be worn to the gym or out to dinner. Customers can purchase these items directly through the website or sign up for the VIP membership program, subscribing to a monthly shipment containing a brand new, full workout outfit for a monthly fee of $49.95. Shipping is free and the item is picked out by Fabletics based on a survey that customers take regarding their fashion tastes and types of workouts that they like best.
Joanie and Heather of The Krazy Coupon Lady couldn’t resist the value of the VIP membership program. As athletic apparel enthusiasts, they loved the idea of the brand doing the hard work of selecting an outfit for them each month. Plus, when customers sign up to the program, clothes are dramatically discounted.
When Hudson launched Fabletics brick-and-mortar stores last year, she implemented the reverse showroom strategy made famous by tech companies like Apple. This technique integrates the online store into the physical store, encouraging customers to make online purchases based on products that they like in person. When a customer tries on a Fabletics item in the dressing room, the item is automatically added to their online shopping cart. While shopping, customers are encouraged to sign up to become VIP members.
This technique is an innovative solution to the fact that online retail is outselling physical retail more than ever. Instead of depending on physical stores to provide additional revenue, brands use physical stores to bring more revenue to the online store. With sixteen Fabletics stores located around the country, the company has watched 25% of physical store customers sign up to the VIP membership program.
Because Hudson believes in the quality of her products, she is confident that some customers just need to see Fabletics clothes up close and personally in order to be convinced to sign up to the membership program. This concept benefits the business by reaching out to fashion consumers who want to try clothes on before purchasing them.
The company also uses website data to decide what to stock in each store. If online customers in coastal states are more interested in, say, sweatpants instead of leggings, Fabletics stores will reflect those regional trends.
Thanks to this innovative strategy, Fabletics continues to see enormous growth each year. The physical stores have provided much additional revenue to the brand and Hudson will be launching several international stores over the next few years. The fact that Fabletics has managed to outsell Amazon when it comes to athletic apparel is a testament to Kate Hudson’s remarkable business sense.