How Kate Hudson’s Fabletics Is Changing The Face Of Online Retail

When high-profile movie star Kate Hudson announced in 2013 that she was launching a fitness apparel brand, some may have underestimated her entrepreneurial talent, assuming that she was just another celebrity attaching a famous name to a trend. However, $250 million in revenue later, those doubters have been proven wrong.

 

Fabletics, Hudson’s athletic apparel company, was launched as an e-commerce website with a unique business model. In addition to selling an enormous array of highly stylish and high quality athletic apparel products in a typical online retail format, the website also encourages customers to sign up to become members of the VIP program. This membership program allows customers to receive a brand new complete workout outfit in the mail for $49.95 each month. Customers receive clothes selected for them by Fabletics based on a survey that they fill out with questions about style and workout preferences. Subscribers can opt out at anytime, but few choose to do so.

 

This business model has made the company a huge success. Teri Hutcheon, the notable blogger who created afoodiestaysfit.com, jumped at the chance to become a VIP member. As a woman who follows a regular workout routine, she loved the convenience of having an outfit selected for her. When Teri’s first outfit arrived, she was thrilled to discover that Fabletics clothes are made with high-quality fabrics and offer a superb fit.

 

When Hudson opened up her first round of physical stores throughout the United States, she created them using the “reverse showroom” method. Instead of depending on the physical stores to provide lots of additional revenue, the stores act as another vehicle to get customers to sign up for the online VIP membership program.

 

This method was made famous by Apple, but Hudson was the first to use it for a fashion company. When shoppers select items to try on, these items are then added to the shopper’s online shopping cart. Shoppers are given the rundown on the VIP membership program by Fabletics employees. So far, about 25 percent of customers who have purchased a Fabletics item in the store have joined the program. Roughly 35 percent of store customers are already Fabletics VIP members who want to try on an outfit and see it in person to make sure that it fits before purchasing it online.

 

The “reverse showroom” method is proof that physical stores are not obsolete. By using a physical store to bolster online sales, companies are giving customers who prefer to try clothes on in person the ability to see and feel products before making their decision. Because Fabletics items are renowned for their high quality, most customers are convinced that a membership is right for them upon leaving the store.

 

Needless to say, these physical stores have brought additional success to the company. Fabletics currently sells more athletic apparel than Amazon. Hudson plans to launch several more stores across the world within the next five years. With such bold business sense, it’s safe to say that Hudson is more than just another movie star.

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