With the age of the internet, business is evermore competitive than it once was. And that’s especially the case with the online fashion industry. Many retailers are seeing their profits dwindle and their stores close thanks to giants like Amazon, who offer better quality, prices, and convenience. Instead of shying away from this competition, Fabletics is a clothing company that is embracing ecommerce and the new demands of shoppers.
The company has grown over 600% over the last year, and experienced double and triple digit growth before that. They now do $250 million in yearly sales and have over 1.2 million customers. When asked why they were able to do so well in a “dying” industry, the co-founders Adam Goldberg and Don Ressler responded with a surprising insight. They employ what is called the “reverse showroom model.”
Instead of the old model, where customers walk into the store, browse, and buy the clothing item cheaper online later from somewhere else, it’s the reverse at Fabletics. First of all, the customer signs up for a subscription in order to gain access to the fashion selections. Therefore, they likely already know about the brand and specific items before ever walking into a physical store. And that’s the other thing: physical stores are not in random locations, they are very targeted.
Fabletics uses the data they gather about their customers from their website, such as how they buy, when they buy, and what they buy. But that’s not all, they also have technologies in place to assess what is trending on social media in certain areas. Thus, once enough “buzz” is generated for a Fabletics store in a particular area, the company opens up a temporary storefront there. And guess how they decide what inventory to stock? You guessed it: based off the data.
Kate Hudson, the brand’s face, didn’t hesitate to come on board. As an actor, she already has a following. Thanks to her active lifestyle, the co-founders knew she would be a perfect fit. She’s smily, funny, and outgoing enough to help build a brand.
But Hudson doesn’t just show up for photo shoots. She is actively involved in various aspects of the business. From day one, she has advised the design team, social media teams, and sales teams based on her unique insight as a global celebrity. Her one demand from day-one was that everything be high quality. It appears Fabletics is doing just that.