Fabletics is an athleticwear company for women that sells nice workout wear outfits for about $50. They operate on a subscription model: every month, you’ll get billed for a subscription unless you log in and decide not to buy anything that month. It’s like Columbia House for yoga pants. Yet the company is doing something sort of unexpected for a retailer that uses this business model: they’re opening a seventh real-life store, with the new one at the Mall of America in Minnesota.
Fabletics is part of the JustFab subscription-fashion empire, which sells nice private-label clothes and shoes to their “VIP members.” Members can log in at the beginning of every month and choose an outfit that they like, or opt out of receiving anything that month. If they don’t log in, they’re charged the membership fee of $40-$50 anyway.
In a recent speech that Buzzfeed News managed to get hold of, the company’s co-CEO compared the membership model to joining Costco or Amazon Prime, except that members don’t pay for their membership. Instead, he says, members are asked to commit to visiting the site at the beginning of the month.
“Instead of customers having to spend $50 a year, we ask for customers to make a commitment of their time,” he explained to the crowd at this year’s ICR conference. If they forget to log in, the company charges ’em $50 anyway.
The Fabletics business model is to offer discounts on a customer’s first purchase in exchange for signing up for a membership: this could be how the retail store works, or the point could simply be to get their products out there and find new customers that way.
(PRNewsWire via Chain Store Age)
FURTHER READING:
7 Things We Learned About The Shady Past And Problematic Business Practices Of JustFab
Fabletics And JustFab Keep Growing In Face Of Criticism [Buzzfeed]
by Laura Northrup via Consumerist
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