When movie star Kate Hudson launched Fabletics, her athletic apparel brand, in 2013, it was strictly an online retail brand. Coinciding with the rising popularity of wearing athletic gear as everyday wear, Hudson demonstrated a true understanding of fashion consumer trends.
Hudson herself was no stranger to the athletic apparel industry. Her Instagram account, which boasts millions of followers, is full of images of her in her favorite workout gear, offering tons of fitness tips to her loyal fans. Even before launching Fabletics, many were impressed by how Hudson had managed to reinvent herself from glitzy movie star to a respected wellness guru.
However, few were aware of Hudson’s entrepreneurial genius. When the Fabletics website was launched, it was based off of a unique subscription service model. While anyone can order athletic gear directly from the company’s website, customers are highly encouraged to join the VIP membership program. This subscription-based program allows members to receive a full workout outfit each month for a monthly fee of $49.95. The first outfit is half the price. Shipping is always free.
When notable bloggers Joanie and Heather of thekrazycouponlady.com signed up to become VIP members, they had their doubts that the clothing would live up to the hype since the price was so low. However, they were happy to report that Fabletics clothes are built with high quality materials.
Like all subscribers, they filled out a questionnaire upon signing up for the program. This questionnaire gives Fabletics insight into each subscriber’s unique fitness and fashion preferences, allowing the company to pick out the outfit so that subscribers don’t have to.
$250 million in revenue later, it’s clear that this unique business model worked. Because of the company’s success, Hudson has been able to launch a handful of brick-and-mortar Fabletics stores across the United States and is planning on launching even more across the world over the next three to five years. These stores aren’t your average retail stores, however; instead of being intended to earn the company additional revenue, they exist to encourage customers to sign up to become VIP members, earning the company more revenue online.
This concept is called the “reverse showroom.” Physical stores are built so that customers can see the products in person before buying them online. This strategy most appeals to customers who like to feel and see clothing in person before buying.
Every element of the physical Fabletics stores is designed in a way that encourages customers to buy online. When customers try on clothes in the dressing room, these items show up in their online shopping carts. While in the store, Fabletics employees encourage customers to sign up to the membership. So far, 25 percent of physical store customers have signed up to become VIP members. 35 percent of customers who make a purchase at a physical Fabletics store are already members.
Thanks to the enormous success of this concept, Fabletics is continuing to outshine other fashion retailers. The brand has even managed to outsell Amazon’s fashion department. Hudson’s innovative ideas have proven that she deeply understands online consumer trends.