By a business model that blends removing the high fixed costs that go with traditional showrooming, implementing a highly-personalized recommendation model to its customers and the most modernized styling in fitness attire, Kate Hudson’s Fabletics is creating high customer satisfaction and brand-loyalty. And, that’s returning huge sales in the process.
Fabletics makes use of customer membership to overcome one of the major challenges in their industry, faced by their competitors – showrooming. Realizing that purchase decisions can be part of an evolving decision-making process, their model is purchase location neutral.
The company makes use of a membership model involving the filling out of a preferences survey that is used by their computer systems to provide product recommendations to their customers.
Thirty – fifty percent of the customers that walk through the doors of Fabletics’ retail outlet are already members. Furthermore, 25 percent of new customers entering the storefront become members. When a customer tries on an outfit in its brick and mortar store, it gets added to the customer’s online shopping cart for future consideration as well.
Using the website interaction data that the company collects, Fabletics has been able to increase the accuracy of their inventory requirements and make forecasts about how their customers will respond to new product lines as well as to make changes and improvements to their existing clothing offerings.
Greg Throgmartin, the Fabletics General Manager attributes the company’s sales growth to more than $250 million in the 3 years that it has been in business to the company’s membership model.
Hudson’s commitment to Fabletics is best expressed by her active involvement in the business. She was instrumental in selecting the social media strategy, reviewing budgets, sales figures and with design selection – an activity that has helped the company stay current with the latest fashion trends. The company’s top rating score from the Better Business Bureau, a highly responsive customer service department and upgraded computer equipment, ensuring that the most popular clothing items are in stock are some of Hudson’s additional contributions to the firm.
Co-founded in 2013 by Don Ressler, Adam Goldenberg and Kate Hudson, Fabletics makes high-quality activewear accessible to the modern woman with a busy lifestyle.
The company’s highly successful model has resulted in an average 35 percent growth in annual sales. As a company strengthened by its competition, Fabletics built its business model in response to the challenges they faced entering a market dominated by online giants including Amazon.com.