They say that the apparel world is a cutthroat business where hot brands can suddenly cool off at a moment’s notice. And forget about new brands trying to break into the exclusive club. So it comes as a surprise when a new brand explodes on the scene and not only rises to the top but does so in an unconventional way. A brand that has, of all things, a young Hollywood starlet as one of its corporate leaders.
Welcome to the world of Fabletics. What is known as one of the first big brands in the activewear segment, Fabletics has been able to break into a tough market that has been dominated by Amazon, who owns a staggering 20% of the overall apparel market.
Fabletics is best known for having Hollywood actress Kate Hudson as one of the principal owners as well as the face of the company. As a yoga and fitness enthusiasts, Miss Hudson is considered a natural fit for the brand. And the results? Fabletics has grown to become a $250 million dollar business in just three years.
So what is the secret to the company’s success? Fabletics has pioneered the practice of “Reverse Showrooming.” Most retail companies are hurt by customers who “Showroom” their goods – examining the goods at the store and then buying them online from someone else. With “reverse showrooming,” Fabletics encourages customers to become members. And when a customer browses an item, the item immediately becomes available in their online cart. The result is a much higher conversion rate per customer. Also, this practice prevents Fabletics from losing potential sales to their competitors.
Another secret to Fabletics marketing effectiveness is their ability to use local data to customize their physical stores to fit specific markets. Stores are stocked according to the preferences of customers in a given area. This information also allows each store to tweak and refine their stock to adjust to changing tastes and trends.
Based in El Segundo, California, Fabletics operates 22 physical stores along with their e-commerce site. The company also operates a membership service that delivers new products to their members.
Founded in July 2013 by Adam Goldenberg, Don Ressler, and Kate Hudson, Fabletics is one of the fastest growing appeal companies in the world. The company has grown an average of 35% in each year of its existence. In September 2017, the company announced that it would be expanding into the footwear segment with a line of lifestyle, slip-on and workout sneakers.