Kate brings it, Fabletics.

The internet has caused an entire set of new business issues that probably will become the new normal for marketing strategies involved with obtaining consumers who are purchasing high end products and especially fashion. In the fashion industry some negative forces are at play for which the industry is placing the blame squarely on the new online shopping sites that have exclusively low prices as compared to the price points in stores. The in store price point is effected by common business expenditures like those that arise from operating a physical store. Because many online store do not have this type of overhead, online prices are traditionally lower than brick and mortars can set their prices. Convenience is also a large factor contributing to the shift in consumer behavior but to a somewhat lesser extent.

 

Another lesser known issue is that high end companies obtain exclusivity with a higher price point, and this exclusivity along with providing a high quality product was the old method by which high end consumers choose brands in which they become loyal, repetitive customers. This strategy has been so effective that it was a formula for success versus an untested marketing strategy. However, one of the main reasons the strategy was effective was because physical stores were the easiest method to buy a product without regard to the method by which the consumer first encounters the particular goods they are interested in prior to the internet. The internet now combines the methods by which products are advertised and the ability to buy the product in the most effective way since companies began to utilize mail order with the same magazines in which they advertised.

 

However, the time required to receive the product is shorter than mail ordered products. Even more problematic for any business, online consumers consider receiving products purchased online more convenient, and in many cases, quicker than even visiting a physical store. The phenomenon of showrooming is beginning to become a real negative for fashion businesses also. Showrooming occurs because online shoppers cannot physically experience the product that they are interested in unless they come into a physical store. These stores lose business while having the same expensive overhead because these high end shoppers often return to the online outlets to benefit from the convenience and lower price of an online source for the product.

 

The new fashion brand Fabletics is taking an opportunity to exploit this consumer shift very successfully. This company’s 5,000 percent growth rate in only three years since its founding is a cautionary tale for those still utilizing old marketing techniques. This type of growth means that Fabletics and its open minded business model is the new giant. However, for new start ups and entrepreneurs for which the digital revolution is the only normal has a huge opportunity to utilize this new model for success that Fabletics and its founder Kate Hudson has provided. The proof that innovative marketing strategies like reverse-showrooming are effective is in the exponential growth that this innovative athletic lifestyle brand is incurring.

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