When Kate Hudson launched her athletic apparel brand Fabletics back in 2013, the company was strictly an online retail company. Since then, Fabletics has become an enormous success thanks in part to its unique subscription-based business model.
While anyone can purchase a piece of athletic apparel from the Fabletics website, there is an option for buyers to become VIP members. By becoming a VIP member, subscribers pay a flat monthly fee of $49.95 and receive a different workout outfit each month that is shipped to their door. Outfits are chosen based on a survey about style preferences that subscribers fill out upon signing up.
Three years and millions of dollars in revenue later, Hudson decided to open up several brick-and-mortar stores throughout the country that would sell Fabletics apparel. While many would believe that online retail has made brick-and-mortar stores obsolete, Hudson has proved them wrong.
The concept is known as the “reverse showroom technique.” Despite the fact that most revenue comes from online subscribers, the brand’s apparel can be purchased in physical stores as well. The intention is to gain the company more online subscribers by allowing them to try on and feel the clothing in person.
This concept isn’t exactly new, it should be noted. Apple has been doing it successfully for almost a decade. However, this is the first apparel company to implement this risky strategy. Luckily for Hudson and her company, it has paid off. Subscribers have increased as the result of allowing them to interact with the clothing in person before signing up.
Thanks to the success of this business strategy, Hudson is planning on opening up several more physical stores over the next three to five years. Some of these stores will be outside of the United States.
While Hudson’s unique business model is a huge part of the brand’s success, one cannot underestimate the power of Hudson herself as a brand. A large part of the success of Fabletics has to do with Hudson’s internet persona. With several million social media followers, fans of the actress turn to her for fitness and wellness tips and see her as a fitness guru. The numerous fans who loved Hudson as an actress propelled Fabletics into prominence.
Fabletics VIP members also stick with the brand because of the apparel items themselves. Online reviews show that products purchased from Fabletics are high in quality yet very affordable. The products, which range from high-performance sports bras to casual jersey dresses, are made with high-tech fabrics that can withstand heavy exercise. In other words, Fabletics products are built to last.
Subscribers also appreciate Hudson’s commitment to creating apparel for women of all shapes and sizes. While many athletic apparel brands cater to smaller sizes, Fabletics offers products that come in a variety of sizes for a diverse group of women.
It’s clear that Fabletics is going to continue to see enormous success over the coming years. Thanks to Hudson’s fearlessness when it comes to adopting new business strategies, the company should continue to bring in tremendous revenue in the years to come.