(This is the first in a series of we are publishing on building “Digitally Native…read more
Sep 8, 2017
Tech Chronicle: Fabletics: How Star Status and Big Data Transformed a Tech Startup into A Billion Dollar Business
With starring roles in hit films like Almost Famous and How to Lose a Guy in 10 Days, Kate Hudson has a film career that spans genres and is one of Hollywood’s favorite girl-next-door’s. With the founding of Fabletics, the athleisure line of active wear for women of all shapes and sizes, Hudson can now add “business mogul” to her long list of accomplishments. The question, of course, is how did a Hollywood starlet help grow a startup into one of today’s most promising new fashion lines?
It’s easy to assume that Fabletics owes most of its success to its connection with Hudson. After all, she delivers an incredible amount of star power, and women find her to be not only beautiful but approachable and relatable. However, Hudson’s contributions involve far more than just smiling prettily for the camera. In fact, she partnered with the founders of TechStyle Fashion Group not just to endorse their new venture but to play an active role in growing it into something that is truly special.
Like so many startups these days, Fabletics’ business strategy relies heavily on the use of cutting-edge technologies. Big data, in particular, has had a huge influence on the way in which the company has marketed its wares. From its inception, Fabletics has sought to make the most of the amazing promise of big data. It does this by gathering vast amounts of information about those who interact with the brand not only online but in physical stores too. Indeed, Fabletics may have started as an ecommerce company, but it has already spread out into more than 15 stores across the country. Several dozen new stores are expected to be added within the next handful of years.
Another major part of Fabletics’ strategy is its subscription model. A basic membership is completely free, and it gives members access to the entire line of Fabletics products. With a VIP subscription, however, members enjoy first dibs on new items at the beginning of every month. They pay $50 per month, and that fee is then put toward the purchase of new workout clothes. If a member passes on buying one month, the money remains in their account for them to use later.
Fabletics has also made huge strides in bridging the gap between brick-and-mortar retail and ecommerce. Omni-channel marketing, which refers to offering a seamless experience to customers across both the internet and physical stores, is a major part of the brand’s strategy. One way in which Fabletics accomplishes this is by offering integrated shopping carts. When an item is tried on in a store, it is also added to the customer’s virtual shopping cart for easy retrieval later. Showrooming, in which people visit local stores to investigate products before actually buying them elsewhere online, is actively encouraged by Fabletics thanks to its integrated strategy.
While technology has allowed Fabletics to make a huge splash quickly, it’s not the only secret of the brand’s success. The company has also seized the opportunity to address sizing issues in the active wear industry. Unfortunately, the vast majority of popular active wear brands only offer standard women’s sizes; plus-size women are completely excluded. Fabletics recently announced the expansion of its line into plus sizes, so all items are now available up to size 3X. In so doing, it becomes one of the few higher end brands to offer comfortable, effective options for plus size women.
The issue of inclusive sizing is somewhat personal for Kate Hudson. As a Hollywood actress, she has been subjected to many cruel comments by the press and public through the years due to changes in her body’s shape and size. Hudson is known for maintaining a fit and active lifestyle, and she wants other women to follow her lead. The irony, of course, is that someone who wear a size 14 or larger may want to lose weight or tone up, but they may be unable to find stylish and comfortable workout clothes that actually fit.
Given that her first passion was acting, the fact that Kate Hudson is now closely linked to the success of an athleisure wear line is surprising to many people. As a result, she has been interviewed extensively about her experiences in launching Fabletics. She was there from the very beginning, so it is safe to say that the actress know understands the finer points of running a business. In interviews, Hudson has cited many factors in helping to bring the brand to success. One thing that she has mentioned repeatedly is being hands-on. Hudson is known to track sales for Fabletics and to otherwise be actively involved in the day-to-day operation of the company.
Kate Hudson also insists that to truly succeed in any endeavor, it is important to give back. She was raised to think this way, as her mother, Goldie Hawn, has long been a generous philanthropist. Her organization, the Hawn Foundation, teaches the concept of mindfulness to kids to help to enrich their lives. Hudson plans to follow her mom’s lead later, and she hopes that her involvement in the success of Fabletics and other endeavors will serve her well when she does.
The activewear market in the U.S. is already a behemoth, with approximately $44 billion in revenue in 2016 alone. Incredibly, that figure is expected to soar to $83 billion by the year 2020. Without question, Fabletics was launched at the perfect time, as the market will virtually double in size in just a few short years. Still, the true secret behind the brand’s current and ongoing success boils down to the people behind it, and Kate Hudson has more than proven her value in that department. As more Fabletics stores open around the country, the company’s fortunes are sure to soar even higher before too long.