A business being worth $250 million in just three years is no small feat. It’s even more impressive when done in the fashion industry. This is exactly what Fabletics, the subscription-based activewear company founded by Kate Hudson, has done. Now, they are planning on taking a successful online business in an entirely unexpected direction, retail.
A Personal Touch
Fabletics gives its customers a personal touch when purchasing their items online. They do this through a subscription process, making it convenient for customers to make purchases. Combine this with the high quality of the product and you have a recipe for success.
The Amazon Hurdle
The monster lurking in the shadows for every e-commerce business is Amazon. The online retailer control 20% of the online fashion industry as it stands and the number is trending up year after year. Fabletics ability to recognize the growing trend of activewear early in the game and their innovative supply chain has led to them having success, despite Amazon.
The Move to Retail
Many think that the last place an extremely successful online business would want to go is into the retail spectrum, but this is exactly what Fabletics is doing. 16 stores have already opened in the United States. While the online portion of the fashion industry seems big, it only makes up about 20% of the industry. E-commerce is growing at a rate of about 20% annually, meaning retail will make up a majority of the business even in the future.
Fabletics recognizes this. The company also realizes they must be very careful when opening stores in order to make them successful. A few strategies drive the success of their retail storefronts.
Online data has become a hot commodity in recent years and Hudson and her team have found an entirely new way to process and use it. They are integrating their online data with their retail protocol by using local buying trends to shape what is put on the shelves. Each location is tailor-made to the purchasing trends of buyers near that location.
Making the Showroom Work For the Online Business
The showroom used to drive sales for retail clothing establishments. This is no longer the case. Today, consumers are finding what they like in the store and then going online to purchase it at a cheaper price. This is called showrooming. Fabletics eliminates this through the membership program because most of the people that shop in their stores are either members or future members. Customers can also place items in their online cart from the store as part of their membership.
Retail Stores Help Drive Online Sales
Hudson says that the retail stores are actually helping to improve their online sales thanks to the fact that there are some consumers who won’t buy anything until they experience it in person. Many people did not buy from Fabletics until purchasing something in the store. There was also a spike in online sales in areas that were in close proximity to a storefront. The retail game has changed thanks to online, but there is still a way to use it. Fabletics is proof of that.