Adam Goldenberg, co-CEO of TechStyle – the company that runs Fabletics, which launched in 2013, in partnership with Hudson – discussed this subject at the Shop.org Conference in Los Angeles.
More specifically, he reported that Fabletics had a clear rationale in moving into physical retail, a process that began in 2015, and has resulted in the opening of over 20 stores.
“We chose to use retail not as a way to acquire new customers, but to increase the lifetime value of the customers we already had,” he said. (For more, read WARC's in-depth report: TechStyle turns digital retail model upside down with Fabletics.)
Fabletics’ online model includes a “VIP” subscription service that tailors product recommendations to suit members’ individual tastes, as well offering numerous other perks.
“Let’s make sure the brand is already built, has high brand awareness and tremendous loyalty online, because it is more cost-effective to acquire online than it is retail,” Goldenberg said in explaining the brand’s online-first logic.
As Fabletics reached 50% national brand awareness, however, traditional retail presented an opportunity to augment its customer relationships.
“When we started opening doors, we had about a million VIP members,” Goldenberg said. “We put those doors in locations where we had high penetration of existing customers.”
The online shopping preferences of customers are instrumental in the selection of products and their placement within each store – and the additional data from physical stores was then fed back into digital marketing, too.
Understanding which items are most commonly purchased after being taken into dressing rooms, those that don’t have the same appeal after being tried on, and the reasons why certain products are returned are further benefits of physical stores.
Similarly, the brand can tailor personalised follow-up emails for customers who visit its physical outlets based on their in-store preferences.
A truly omnichannel approach, in fact, is central to its retail philosophy. “We want to make sure that, if you’re a VIP member and you walk into that store, all the same membership perks you have online you can still use,” Goldenberg said.
“If you have membership credits, you can redeem them for products. If you have loyalty points, you can redeem them in the store. All the discounts, savings and benefits need to be identical.”
Sourced from WARC