Since the evolution of the Internet, customers have always used comparison shopping to find the best product at most reasonable price. Once a customer finds a certain product, it is not uncommon for them to try the product in physical storefronts before buying it. According to a recent Harris Interactive Poll, nearly 70 percent of consumers in the United States regularly buy products in the store after doing comparison shopping. However, both physical and online stores are unable to take advantage of the mindset because Internet stores need to compete on the price and physical stores need to attract customers to its stores. Even Amazon, which is regarded as a benchmark for customer service, is thinking about opening physical stores.
However, some companies, such as Fabletics, are already giving Amazon a run for its money. It seems that Fabletics has perfected the sales model of integrating online and offline sales to customer’s preference. The model is called reverse showroom technique, which encourages the online customer to try the product at physical store before buying it. However, the sales model is only successful if online price and quality of the product are also competitive because only the best-value product will encourage the customer to visit a store.
Luckily, Fabletics did not open a physical store before convincing its Internet customers. Instead of taking a typical online route to sales, the company started offering innovative designs at a great price through its subscription based online channel. After subscribing, each customer would get a catalog of very selective clothing, which are often half the price of most popular designs offered by competitors. The price-to-value proposition is so attractive that Fabletics is able to grow its revenue to almost $250 Million in just three years of opening. As more customers joined and the membership continued to grow, the company decided to open physical storefront where customer can try their favorite outfits before buying it.
Accordingly, Fabletics stores have started to pop up everywhere in the United States in major metropolitan areas. The location of these stores is always in a prime shopping area making it easier for everyone to visit these stores. According to the recent data, the success of physical store is imminent because 25 percent to 50 percent of the company’s walk-in customers are subscribers to the online catalog. As such, these customers already know what they need to buy. Likewise, another 25 percent of walk-in customers also get memberships while visiting the store allowing them to buy clothes at a great value.
Fabletics is a brand backed by the world’s famous celebrity Kate Hudson. Since 2012, the brand has seem immense growth, which has prompted the management to open anywhere from 75 to 100 new stores in the next three to five years. The increasing demand has also convinced owners to start swimwear and dresses, which will complement the existing sportswear line. In fact, Kate Hudson’s brother and actor, Oliver Hudson has also joined in 2015 to promote menswear.