No one ever thought that a company the size of Fabletics would be able to take on the internet giant known as Amazon. Up until this time, Amazon has been dominating everybody in the e-commerce fashion market. Whatever company decides to try and stand up against Amazon is either destroyed by the internet corporation or bought up before they can become competition. When Kate Hudson declared publicly that she was going to create the newest athleisure clothes that could compete with anything Amazon could create business analysis were stunned. However, Kate Hudson’s business, which is valued at $250 million, has been able to take on the $400 billion corporation. The reason that Kate Hudson can do this is that she has discovered how the leverage the power of the crowd.
We live in a day and age where the consumer no longer trusts the advertisements they see on the internet or TV. Most consumers will not purchase a product and lessons-review and they can confirm that review by several friends. This means that unless companies get their product past the tipping point, it is nearly impossible to make a fortune. Kate Hudson was able to get past this tipping point by taking the consumer and making them the priority. The Fabletics staff was required to respond to any Facebook message, consumer complaint, email, or customer inquiry within a 12 hour period. This connected with their no-nonsense customer service policy made Fabletics an immediate hit within the internet e-commerce fashion world. Because Kate Hudson put her customer first, she received a trust score of the 96.
This trust score would make her the competition Amazon feared. It allowed her to launch a subscription-based model that could deliver products to the customer taste on the timeframe they chose. The Fabletics begin to see immediately is that not only do people love the clothes that they were receiving, but they also wanted to purchase additional clothes online. Kate Hudson was able to report to her investors at this last quarterly phone call that 85% of Fabletics sales are coming through repeat customers. In business terms, this means that one customer is the equivalent of 8.5 customers for Fabletics.
Kate Hudson decided that will loyalty such as this it was time to open up retail locations. Many companies no longer are doing this because customers are coming in and searching for the product that they want to buy online and then going online to get the better price. However, Kate Hudson’s company was not a victim to this.
Kate Hudson found that when the retail stores are open half of the people coming inside were already loyal Fabletics subscribers. These loyal subscribers were bringing friends into the store who had not yet signed on the Fabletics. Kate Hudson was shocked to find out the 20% of those friends signed up for subscription by the time he left the store.