Fabletics has been making good use of their reverse showrooming strategy to increase their sales and lower their business costs.
Observing that people want to have the same experience that they have online; they want to go into the store and touch and feel the products and they still want to have the same things that they can get online available when they go to the the store, Kate Hudson describes the components of an important strategic advantage that her Fabletics company has over its competitors.
Reverse showrooming is the strategy that Hudson and her Fabletics co-founders use to give their customers the best combination of the online and retail outlet shopping experiences.
The customers can view outfits online and purchase them from the website or they can go into a retail store, touch, feel and try them on and complete their shopping there. Having the ability to purchase both ways has proven to be beneficial for the customers and for the company.
As many as 50 percent of the customers walking into the retail outlet are already registered online customers. For those that are not, the registration process can be completed as part of the sales process.
Hudson states that “we really did pioneer the membership model” adding that being a forerunner can mean encountering glitches. “With that being said,” she adds “we are running incredibly smooth.”
Completing the membership is a key step that allows the customers to begin deriving many of the firm’s member-specific benefits. Members receive a customized boutique email and recommendations based upon their personal preferences. Registered members can have the items that they try on in the store saved in their virtual online shopping cart. They are also able to accumulate promotional credits that can be used for later purchases.
While brick and mortar competitors are getting killed by the expenses that come with showrooming, Fabletics is able to creatively cut costs and promote their products using their membership model. Since its founding in 2013, the company has grown to over 1 million VIP members globally and reports a 35 percent annual revenue growth and $250 million in sales.
Started in 2013 by Don Ressler, Adam Goldenberg and Kate Hudson, Fabletics has experienced rapid sales increase, making it a ¼ billion dollar company.
Hudson attributes the firm’ s success to several factors including: finding and exploiting market advantages, involvement in the daily operations and believing in yourself and taking risks.