Regulation: Can I buy Fabletics or not?
Picture this scenario: You are scrolling through your Instagram stories when an advertisement appears on your screen. It shows a picture of seemingly high-quality leggings in a variety of colors with large font reading “2 for $24 Leggings”. The advertisement worked and you are intrigued. You click the ad, leave Instagram, and find yourself on a website by the name of Fabletics.
This scenario is not an uncommon one. Though my own friendships could provide survey bias, I recently asked 15 friends, male and female, if they encountered Fabletics ads; they answered that their phones were flooded with them, despite them never visiting their website. In other words, Fabletics is seemingly attempting to advertise widely, making viewership of its products easily accessible. So, why would anyone refuse the deal for extremely discounted leggings? The answer is what sets Fabletics apart.
To gain a true consumer’s perspective, I followed the steps in the example above. I found that the leggings, being offered for $24 as a pair, had their previous $75 price line crossed out. They are offering an amazing deal! As I went to select a color and size, I was faced with an obstacle, a pop-up. To continue shopping I had to enter my email, a few style preferences, and how I heard about the site, but there was no payment or billing information, so I proceeded. Gaining access was rather simple, however without providing personal information, I would have been restricted. I was then able to access the style options, listed just below the red text, “New VIP Offer: 2 for $24 Bottoms” and “Non-Member: $75”. To get the discount offer, I had to be a Fabletics member, not just by providing my email but by paying a monthly subscription fee. I found this subscription model to be rather interesting given that I had never encountered anything like it before when shopping for clothes. Why would I want to pay a monthly subscription (currently listed as $54.95)? On a personal note, I own a lot of athletic wear, yet I remained skeptical as to how much athletic wear I would need to be buying, monthly at that, to make this a worthwhile investment. This question applies to anyone who finds themselves on Fabletics’ site, and I will explain this concept further without the influence of my personal experiences and perspectives. Why would anyone pay a subscription fee and what is Fabletics’ goal in this regulation of their consumers? Though Fabletics is rather unique in its subsection model as a clothing site, meaningful insights can be gained by looking at the more general athleisure clothing market.
The athleisure market is experiencing rapid growth. While its market size was $155.2 billion in 2018, by 2026 the athleisure market is expected to be sized at $257.1 billion. This growth has been sparked by both the Covid-19 pandemic and increased awareness and investment in health and fitness; both aspects allowed athleisure to gain popularity in varying environments and settings. In other words, there is more demand for athleisure, beyond gyms and their athleisure consumers, as the market has expanded to include a diversity of people who may not even be working out. So, how does Fabletics fit into this evolving market? Fabletics has more than 85 brick-and-mortar retail stores but is known for its online presence. Additionally, their clothes are of comparable quality and pricing (for non-members) as their top competitors such as Lululemon and Athleta who do not employ a subscription model. So why subscribe?
The $54.95 cost of VIP status offers consumers many benefits, such as membership to the Fabletics FIT app for on-demand workouts with trainers, free shipping and returns, VIP pricing for 20%-50% off all items, and no membership cancellation fee. But, unsurprisingly, the most important aspect of their subscription is access to monthly clothing deals. Their payment affords them a personalized outfit each month, for women a top, bottom, and sports bra, from the new month’s collection. It seemingly resembles any other subscription-based service that could take advantage of the eager consumer by securing a monthly fee which the user subsequently fails to make adequate use of. But, as a Fabletics VIP member, you can skip a month, or an unlimited number of months, and not be charged. However, to incentivize members to not skip months, Fabletics uses a credit system.
For each paid month, VIP members earn member credits. Accumulating enough member credits grants members an additional discounted, special deal at no extra cost. But these member credits expire after 12 months, thus wasted if left unused. This strategy reinforces Fabletics’ regulation through subscription as it urges members to pay monthly and gain credits, even if they may not need new clothes that month. Additionally, the expiration of credits imposes a timeline such that a customer might feel they should pay their subscription enough times in a 12-month period, so their credits don’t “go to waste” when they are not necessarily being wasted at all as they received clothes for the price they paid, not just credits. While this system is somewhat complex, in simple terms Fabletics has employed strategies to retain their VIP customers. While the option to skip a paid month is potentially beneficial to a VIP member, this restricts their access to monthly member credits, monthly clothing, and over time, rewards, thus essentially making them a non-member.
Another interesting aspect of the Fabletics business model is the concept of consumer resale. With the highly discounted products and ability to skip months to save money, what is preventing VIP customers from reselling their clothing for profit at Fabletics’ expense? Firstly, it should be noted that Fabletics subscription fees contribute to a significant amount of the company’s overall revenues. Combined with their in-person stores, this revenue model has proven very successful. Moreover, they are getting adequate subscriptions to generate business. Thus, if a VIP member is paying their subscription to purchase enough clothing for their own resale and profit, this is still business for Fabletics. In my research on the topic of Fabletics customer resale, I found no content by Fabletics or its consumers about potential exploitation, perhaps a form of strategic regulation of media content by Fabletics, or a sign of a non-issue; Fabletics still profits and makes money through their subscription fee and discounted VIP product costs.
However, in 2021 Fabletics also partnered with ThredUp, an online consignment store. ThredUp allowed Fabletics to bring re-sale in-house, subtly discouraging consumers from individual resale. This partnership meant that Fabletics customers could mail their pre-owned clothing to ThredUp in exchange for compensation if deemed “resellable”. ThredUp would then offer the option of a cash payout or Fabletics store credit to the customer with the value of the store credit being 15% more than the cash payout. ThredUp allowed Fabletics an opportunity to regulate customer resale, incentivizing customers to resell in-house by offering a higher payout through store credit rather than cash, their resale option if they were not to opt to use ThredUp in the first place.
Taking all this information into account, from their advertisements, website accessibility, VIP membership, and resale strategies, Fabletics provides an interesting case. Unlike other subscription-based website models, whether it be clothing stores, newspapers, or anything in between, Fabletics viewing access is not limited by subscription. However, in the case of newspaper companies, an online visit to their site is the equivalent of receiving their product; viewing Fabletics clothing online is not the equivalent of having their product.
Furthermore, purchasing Fabletics clothing is not restricted by subscription but regulated by subscription. Just like any online clothing store, access to the product is restricted by the cost of purchase. A non-member purchasing Fabletics attire receives clothing, but only the clothing item. They are not granted the wider scope of benefits or reduced pricing offered to VIP members and they cannot navigate the Fabletics website without knowing that.
Given the fact that anyone can purchase Fabletics, notably at comparable prices to competitors without a subscription, why is the subscription option worth delving into? The regulations imposed by the Fabletics subscription model benefit the company, but its flexibility ensures that it is not at the consumer’s disadvantage. The subscriptions are economically beneficial to Fabletics and provide VIPs ample opportunities but are not inherently malevolent to anyone overall. This is Fabletics’ strategy of semi-regulation. Even though a subscription fee regulates user capabilities, VIP members are not trapped or subject to harsh terms of membership. Instead, Fabletics widely utilizes soft incentivization strategies, in their advertising to all consumers, in their monthly credit system, and in their resale methodology. Moreover, Fabletics’ regulation creates the notion of being part of something special. While anyone can simply purchase their clothes, you can be part of something bigger and receive all the benefits that come with being a VIP.
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