Kate Hudson’s Fabletics company is racking in the dollars because of its peculiar-but-effective business model. The company is doing so well that it is giving Amazon a run for its money. All businesses that sell clothing know that they have to be competitive enough to go head-to-head with Amazon because of Amazon’s enticing offers. Fabletics manages to do this by using a “reverse showroom” technique.
Shoppers usually conduct searches for the outfits that they like in the physical locations, and then they go home and buy them online for much cheaper prices. This technique is known as showroom buying, and it hurts some businesses a lot. Fabletics combats that technique by offering memberships to its customers. The memberships bring money into the company, and the company is then able to offer its members discounts on any merchandise that they buy through their membership. Fabletics isn’t overly concerned with where customers make their purchases, as long as they make them through their company. It’s an ingenious strategy that helps the consumer and the company in more ways than one.
By personalizing the shopping experience, Fabletics gets to learn about what the modern class of clothes shoppers truly desire. Companies are finding out that consumers do not hold the same things at value as they did many years ago. For example, the “hot” clothing used to be the most expensive clothing or the clothing that has the most popular manufacturer name. Nowadays, the “hot” items are affordable items, practical items and items that make the consumers feel good. Shoppers are starting to put a lot more emphasis on customer service than they used to, as well. People want to experience friendliness and courtesy where they spend their money. This rings true for any retailer.
Fabletics’ model focuses on five key areas to form their winning business model: online data, customer relationships, presentation, culture and cost. It continues to skyrocket in profits because of the loyalty that consumers have to their membership-based programs.
Fabletics is a company that operates on consumer memberships. Shoppers sign up for membership for a set monthly or annual fee in exchange for huge discounts on a slew of retail items, free shipping for orders that go beyond a certain amount, and a reward of points that the person can use to claim prizes at a later date.
Fabletics started in October of 2013. Actress Kate Hudson is the cofounder of the business. She plays a huge part in its happenings by suggesting outfits to members each month. Members join Fabletics already knowing and trusting in Kate, so they are often pleased with her suggestions. Fabletics continues to hold the lead and understand the customer’s needs when it comes to clothing. The company has positioned itself into a top spot among the best performing clothing retailers.