To say surviving in the business world is tough is an understatement. Many businesses have as much a chance at success as an onion does surviving being thrown into a food processor. This is even truer when they step up against business juggernauts like Amazon. However, this has not stopped Kate Hudson’s business from doing exactly that. Her company, Fabletics, is talking Amazon head-on.
Fabletics can take on Amazon, which holds a 20% market share in fashion e-commerce because it uniquely blends several business models. The first thing Fabletics has done is utilize a subscription-based model for their services. If you are interested in clothes that empower you to be a better version of you, than all you need to do is sign up and every month new clothes will come to you in the mail. This model has made Fabletics America’s number one leading athleisure brand.
Fabletics has also copied the business models of Apple and Warby Parker. This means that, in addition to their subscription services, they have physical stores for people to pursue. At the time of this writing, Fabletics has sixteen shops spread throughout Illinois, Florida, Hawaii, and California. This is only the beginning as they are planning on launching dozens more in the next few years.
When the idea was presented to have Fabletics open physical stores, a significant concern spread through the boardroom. Ever since the advent of internet shopping, a curse has plagued physical stores. This curse is known as showrooming. Showrooming works like this, a customer knows of a product online but also knows they will not be able to test it out since they can only view it on the internet. The customer will then go to a physical retail store to examine it. Rather than buying it from the store, they hunt for the lowest price on the internet and buy it that way.
Fabletics took advantage of this curse. They introduced the idea of reverse showrooming. The idea was to ensure that a customer was already loyal to Fabletics before even entering the store. Through getting to know local vendors and hosting local events, Fabletics was able to ensure that 30-50% of the people walking through their doors were customers and 20% of those who were not left loyal to their company.
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