- Posted July 7, 2014 by
Subscription clothing websites: A new gold mine?
One of my favorite new websites for buying workout clothing is called Fabletics, an online retailer of exercise gear that has the popular actress Kate Hudson – yes, the daughter of Goldie Hawn – as their front person. It doesn’t hurt that they have gorgeously designed modern creations that women who love to stay in shape favor wearing. It also doesn’t hurt that Kate looks fabulous, thin and fit in all the exercise clothing, but another major reason I attribute to the store’s success is their subscription-model based selling.
The thing that makes the website stand out from other sites of the same ilk is the way they entice buyers with very low introductory prices. For example, they may offer 50% off a three-piece workout outfit – that’s including a sports bra, tank top and jogging pants – and allow first-time subscribers to buy it for only $25 as an initial purchase. The whole point is that customers only get their deep discount savings if they become “VIP” members, which means they are agreeing to sign up for outfits that cost approximately $50 each month.
Of course, the buyer has the option of opting out of buying any clothing each month – however, customers must proactively opt out of their purchases by the 5th day of every month. If they don’t, those customers are charged nearly $50 for the month, and they can use that credit to buy an outfit. Retailers that adopt this model are probably hoping that most buyers actually purchase new workout clothing each month, or at minimum, forget to bypass the month so that the store can still reap the benefits of constant income.
It’s an interesting sales model that might truly build brand loyalty. After all, it’s one thing to grab a customer’s credit or debit card number when they purchase one item of clothing from a website. It’s something altogether different to sign those same customers up for a “VIP” program that grants the retailer access to charge that card monthly if certain conditions aren’t met. If the customer loves the clothing and enjoys the experience, they just might find it very worthwhile to remain a VIP member and buy at least 12 outfits per year from the company.
Retailers who adopt this method of selling have to consider setting up quality customer service options, because buyers may definitely have questions about the pricing model that they’d want answered immediately via quick phone calls to toll-free customer service numbers. And companies who use the subscription based model of selling just may find their coffers full of the funding it takes to provide quality support to clients, because in the end, it’s somewhat easier to predict the amount of income those firms could bring in monthly in gross sales.
For example, if the Fabletics firm discovers that at any given point in time, at least 10,000 customers on average participate in the VIP program, spending approximately $50 each month, that’s $500,000 in monthly gross sales they can rely upon. Keep that up, and they’ll discover a cottage industry indeed.