Competition in the fashion industry is cutthroat. The e-marketing fashion space is dominated by Amazon, which is not your usual two pence competitor; they’re one of the most recognizable brands internationally. The American consumer satisfaction index revealed that Amazon was the most popular company in America in 2014 based on more than 70,000 interviews. Currently, it commands 20% of the online fashion market.
In only three years, Kate Hudson’s Fabletics has claimed a seat at the table with the big boys. Building a $250 million business in such short time is no small feat, but Kate Hudson’s has done it. They have positioned themselves as a high-value brand and using a mix of customer focused strategies, they have found success both online and in their physical stores. One strategy that is working for them is reverse showroom technique.
Showrooming has been a threat to many real businesses. It entails a situation where customers visit multiple online stores with the intent of researching on quality and prices and then buying where the prices are the fairest. Kate Hudson’s Fabletics has found success with reverse showroom technique because they established an online shopping website early enough that has enabled them to create effective customer relations and brand loyalty.
Fabletics creates a membership through a subscription that allows them to offer personalized services. As much as 50% of the people who walk into their physical stores are already members. It is not hard to believe that another 25% of the other walk-in customers become members because Kate Hudson’s online presence has enabled to them to know what their customers want which is what they stock in their physical stores.
Kate Hudson had done her research before she started Fabletics and she seems to realize what people want. Fabletics sells athletic and leisure clothing through its online and physical stores and relies on the information they gather from their subscribers to know the local markets and to position themselves strategically. They have been able to build customer loyalty by offering high-quality cloth wear at much lower prices than their competitors.
This model has worked so well for Kate Hudson’s Fabletics that they are adding more physical stores to their sixteen current ones. They have already set base in places like California, Illinois, Florida and Hawaii. Like other companies such as Warby Parker and Bonobos, Fabletics is combining high-quality products with data science among other cutting edge strategies to compete effectively with Amazon.