Question

Fabletics Changing Channels: According to Fabletics company official website “JustFab Inc. co-CEOs, Don Ressler and Adam Goldenberg, launched Fabletics with Kate Hudson after they saw a gap in the activewear marketplace. There were plenty of luxury brands, but none that offered stylish and high-quality gear at an accessible price point. These three unstoppable innovators joined forces to create the Fabletics brand in 2013.” Fabletics, a division of Just- Fab, offers affordable, high-quality, and stylish workout clothes including yoga pants, leggings, joggers, tops, tees, and more for women and men at every fitness level. After being in business just a few short years, the company ranked number 98 in the Internet Retailer 2015 Top 500 Guide with revenues of $150 million. Although initially internet-based, Fabletics moved into brick-and-mortar retailing in 2015. It plans to open 75 to 100 stores by 2020.

a) Conduct your own research to learn more about Fabletics. Discuss how Fabletics is meeting customer needs through its value delivery network. What controversy surrounds the company?

b) What type of marketing channel is Fabletics using? What is its distribution strategy? Does opening brick- and-mortar stores make sense for Fabletics? Explain.

Answer 1

a) Fabletics primarily operates through two channels- online subscription retailing & brick and mortar retailing. The key value delivery is to offer high quality activewear at a affordable pricepoint. They have a flexible online membership model, that avoids a standard monthly or yearly fees. However, the shopper has to compulsarily visit the site in the first week of every month and decide to shop or skip, to avoid membership fees.

The cancellation of membership/ termination of subscription is the key controversy linked with Fabletics. Despite, cancelling customers are charged a fee and data privacy is not honoured upon.

b) Fabletics is heavily driven through social media marketing through sites like Facebook & Instagram, that allows it to leverage Search Engine Optimization (SEO) and promote its products. In additon to this, they have their own retail experience system named OmniCart that allows to track purchases and cover product preferences. Evolve is the software through which demand fulfillment is done, Based on customer preferences, product stocking is done through predictive modelling which has 95% accuracy in stores and inventory warehouses.

Brick and mortar stores make sense for Fabletics because the entire model is drive through predictive modelling and stocking, through customer preferences. Through this channel, it can follow personalization through mobile devices, wherein the data of every prospect entering the store gets scanned and recorded for targeting/ understanding buyer preferences.