5 Impressive Lessons to Learn from a Fabletics’ Retail Strategy
The phenomenal growth of Amazon made many retailers howl in disdain, losing any hope to grow big in the non-luxury segment of the apparel industry. Amazingly, Fabletics, launched in 2013 and primarily associated with Kate Hudson — a co-founder and the face of the company, entered the market as Amazon’s direct competitor offering quality activewear at the prices affordable for all.
And reached success!
For turning into a $250 million business in just three years and boasting 25% year-over-year revenue growth is nothing but a success in a retail business.
These impressive results are neither a chance nor a tribute to celebrity advertising; after all, there is a wealth of brands promoted by celebrities out there. Instead, it is due to the well-thought marketing strategy, the winning points of which we are going to share right now.
Lesson 1: Subscription
Fabletics operates under a paid VIP membership program. The subscription comes at $49,95 a month (added towards the purchase if you make one) and gives access to personalized offers and impressive discounts. The advantages of the subscription for the brand are great too, including:
- Steady client base: subscription makes customers stick to the brands and consider its offers in the first place, making it difficult for competitors to steal their attention
- Consistent customer data: since subscription gives apparent advantages, customers are encouraged to have and consistently log into their accounts, which allows collecting mass amounts of data on their preferences and buying journeys
Here, it is important to learn this lesson along with the ones Fabletics learned themselves: luring customers into subscriptions or making it difficult to cancel subscription is a great reputation threat and is definitely not worth it. In contrast, being frank, setting the right expectations and launching referral programs, you can make your base grow insanely.
Lesson 2: Ongoing Market Research
Telling about the brand, Fabletics says that they “conduct a huge market research study every year”, which helps them to track their progress and better meet the needs of the members.
Obviously, the importance of continuous market research and responsiveness to the needs and expectations of customers cannot be overemphasized. What is more, modern market research software tools help to seamlessly carry out complex market research agreggating data from both online surveys and face-to-face interviews. This is how the brand gets to know responses to its products from online buyers and visitors to its stores.
Lesson 3: Omnichannel Customer Experience
The latest statistics on the relevance of adoption of omnichannel strategies speak for themselves:
- adoption of omnichannel strategies allow businesses to retain 91% more customers year-over-year
- modern customers consumers use an average of six touch-points before making a purchase
- the lifetime value of omnichannel shoppers is 30% higher
- shoppers tend to use smartphones for research when in-store and 71% of them confess it has become a regular aspect of their buying experience
Fabletics has gone a long way uniting online and offline buying experiences and there is definitely much to learn from the brand here.
In particular, Fabletics shoppers seamlessly connect to their accounts as soon as they enter brick-and-mortar stores and complete transactions they started on their smartphones. More than that, they can check the availability of other sizes or colors or view the matching products in an exact store directly from the fitting room.
Lesson 4: Data-Driven Visual Merchandizing
Many e-commerce websites put a high priority on visual content, but Fabletics has many things to learn here too. First, they use machine learning algorithms to personalize the customer experience and serve the images based on previous purchases and preferences.
Second, the brand features models of different body sizes. This helps plus-size customers effectively visualize themselves wearing the outfit. This not only promotes sales but also minimizes returns: while the average return rate for the industry is around 35%, the brand has only 6.5% to 8.5% of purchased products returned.
More than that, Fabletics collects data on the response to the new style and, if it is not performing well during the first five hours after the placement on the web-store, the brand re-shoots the products.
Lesson 5: Brick-and-Mortar Stores
As it has been mentioned, Fabletics uses an omnichannel strategy launching online and in-store purchases. This helps the brand to overcome a sad story of physical stores turning into the showrooms where people come to try on products to later buy them online from another company. However, this is not the only thing special about Fabletics stores.
An important lesson to learn here is the selection of the store location and inventory. In particular, these choices are made basing on the data about local membership and membership preferences, as well as the social sentiments they share.
Final Thoughts
Fabletics does great gob leveraging market research and customer data to grow the popularity and revenues of the company. With all the excellent examples the company gives, it teaches one important thing: no matter how competitive the market is, there is always room for a great product delivered using a smart marketing strategy.
