Not many people can make Jeff Bezos tremble as he sits in his Amazon office. However, as he looked over the last quarterly report, he noticed that there was a problem in the fashion e-commerce sector. Amazon had been controlling 20% of this market share, completely dominating the entire market. They were able to ensure their rightful place by either bankrupting all the competition or purchasing companies before they actually could compete. However, he saw that Amazon’s market share was down and it was beginning to lose ground to a little-known company called Fabletics.
Fabletics is the dream child of actress Kate Hudson. She uses her company to create athleisure clothes that women can wear to inspire them to be a more excellent version of themselves. It helps them physically by seeing what they can become should they eat right and exercise. It helps them emotionally by letting them know that they are beautiful no matter what. It also helps them spiritually as many of them use this for meditation and yoga.
The reason Kate Hudson was able to take on Amazon is that she specifically took the weaknesses of Amazon’s business model and implemented them into her business plan as strengths.
Kate Hudson began by leveraging the power of the crowd. Today, it is almost impossible to sell products without first getting momentum through a group. Studies have shown that a customer will buy a more expensive product simply because it has more reviews than another cheaper product they are looking at. For a company to succeed, they need to have the crowd go past the tipping point of nervousness and enter into confidence. Kate Hudson was able to establish this for Fabletics but hosting local events that promote local dealers and allow potential customers to use her products without committing to purchasing. Once the customer was able to handle Fabletics cloths they knew that this was something they wanted and they immediately purchased.
Kate Hudson would continue this momentum of the crowd and begin truly putting her consumers first. She trained her staff on how to reply to customer inquiries within a 12-hour time frame. This led to the customer knowing that they were valued and appreciated by the staff at Fabletics.
The power of the crowd also helped Kate Hudson when she decided to open up retail stores in the states of Hawaii, Illinois, and California. Many retail locations suffer the curse of showrooming which is when a customer enters your store to touch and feel the products while not purchasing them from you. Instead, they will go online, find a better price, and purchase it from an internet retailer. Kate Hudson stopped this because she opened the stores in the areas where she had the most loyal customers. At this time, 85% of those entering her store were already Fabletics customers.
I encourage you to see what Fabletics can do for you by signing into their website and taking their short six question lifestyle quiz.