How Fabletics’ stores drive memberships

Through the end of the year, the company plans to open 12 permanent stores, followed by 24 more next year, and another 24 in 2021 — all in high-traffic locations in the U.S. It currently has 27 stores.

According to Harries, 50 percent of store visitors who are not Fabletics members sign up on the spot. Fabletics VIPs, or members, pay $49.95 per month for a complete outfit (a top and leggings) and get 20 percent off other items. The company reports 1.5 million active members.

Harries owed the high sign-up rate to the fact that the company has perfected the in-store experience, which it roots in technology.

“We use technology to enhance the experience, but it’s important to get that right,” he said, noting a Fabletics app is set to launch soon. “Those moments in-store have got to be seamless with the website. When you get them right, they drive revenue and loyalty.”

He said the company’s backend system, called OmniSuite, is the company’s engine. It’s integrated in stores and on the Fabletics website, allowing shoppers to sign up for a membership in stores and letting associates look up a shopper’s buying history. Part of OmniSuite is OmniShop, which is Fabletics’ fitting room technology. IPad screens are located inside and outside of fitting rooms. Items brought in are scanned, then show up on the shopper’s screen and in their online cart. They can then browse other colors, see how other shoppers wore the styles, request assistance from associates or buy the pieces online at a later time.

For Fabletics, the technology allows for tracking conversion in the retail environment in real time. The in-store merchandise mirrors what’s online, with new collections launched every month and celebrated with in-store events for VIPs, complete with drinks and a DJ. The store gets pieces first, allowing the company to gauge success and issues — for instance, if a style is tried on repeatedly but never purchased, it’s flagged.

Harries said that even the company’s six original stores, opened in 2015, continue to see sales growth. He said many members enjoy shopping every month in-store, where they can also make returns. “We have this traffic generator traditional mall retailers don’t see,” he said. “It’s like a flywheel; it just picks up speed and takes off.”

Fabletics launches each store with influencer-studded events, inviting local members. The SoHo store kicked off with a meditation event for micro-influencers one night, and a larger member event another night, hosted by mega-influencer Andi Dorfman, a former “Bachelorette.” — Jill Manoff

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5 questions Beryl Solomon, founder of CBD retailer Poplar
A number of CBD-focused beauty and wellness retailers have been popping up in the last year, all gunning to be the Sephora of the space. Beryl Solomon, who went live with e-commerce site Poplar in November, explained the draw and the drawbacks.  

How important was it for you to be an early player in CBD retail?
I left my full-time job as CEO of [fashion brand] State Bags last May because I knew I wanted to do something in cannabis and I had to move fast because the industry is moving fast. I decided to soft-launch with the minimum viable product — an e-commerce site via Shopify — to make sure we were part of the conversation as it was evolving in real time. There were limitations based on timing, but we’re officially launching this summer with a completely custom site that more brings to life my vision for the brand.

What is that vision?
I want to erase bad stereotypes of cannabinoids and present them in this, sort of, wellness toolkit. Early on, everything on the market was either “stoner,” medical or witchy. Everything we sell is legal and has a beautiful aesthetic, and it’s all very vetted — we’re not going to sell every CBD face serum, we sell the best version. We offer categories including Edibles and Ingestibles, and we present them in a way that’s relatable. We don’t have a category called Vape, because that’s not chic. It’s men’s and women’s products, and we want to offer same-day shipping in select cities.  

Do you consider yourself a wellness company?
Wellness, or self-care. Cannabis is the next and biggest frontier in self-care. It’s the pinnacle of what you can do to care for yourself, whether you use a CBD serum or night mask, or smoke a joint — the whole process of it makes you slow down.

Are you getting the word out, considering the limitations on advertising CBD products?
Facebook and Google still do not allow advertising. But CBD is legal, so it’s not actually against their terms of service. They’re saying they don’t want you to touch it, just like they don’t want you to advertise alcohol or cigarettes or porn; it’s a liability issue. If they see it, they’ll shut you down. I had this thesis that we could create a wellness story that didn’t say “CBD” anywhere — we use our imagery, same everything, but we say “wellness serum” versus “CBD serum,” for example, and we link to a site that’s scrubbed of “CBD.” We took it down, but it did pass — there are hacks. For now, we’re advertising on media platforms and we’re looking to do subway ads.  

Is the competition in the space a concern?
So many brands are just shouting, “More CBD!” The Sephoras and Neiman Marcuses are going to stay in the beauty world, and they’re not going to move beyond CBD. But there are 113 cannabinoids, and so far, we’re only talking about CBD and THC. As more research comes out, we’re learning more about the entourage effect — that you can combine these two [cannabinoids] for sleep, and these two for something else. CBD is just the beginning, and we’re positioning our brand to be ready for what’s next. — Jill Manoff

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Brands are looking to Kickstarter to crowd-fund product expansion
From Ministry of Supply to MVMT, there’s a precedent for successful DTC fashion brands to arise from the world of online crowdfunding. But fashion projects tend to experience different challenges than other crowdfunded projects.

Ray Li, founder of Sene, the fashion brand that makes custom suits from technical performance fabric, is launching a Kickstarter campaign to build on the success of the brand’s FlexTech suit with more styles. Li walked us through some of his thoughts while trying to expand his DTC brand through Kickstarter.

• “A lot of Kickstarter campaigns on the product side are very functional, and people are buying into the features of the new product. Fashion is far more subjective. It’s hard to justify every design detail with a technical reason.”
• “Historically, people have used Kickstarter to launch companies, but increasingly, established companies are using the platform and built-in community to rapidly accelerate the adoption of new products. Ministry of Supply, for example, launched their Heat Jacket on Kickstarter and raised $640,000.”
• “We have a few different sub-communities who are promoting this campaign, ranging from magazines to blogs to influencers to affiliates. Some are mainstream fashion-focused, and some are more sustainability-oriented because the material we’re using is bio-component yarn made with a blend of upcycled polyester.”
• “What’s also great about Kickstarter is the built-in momentum. It’s one thing to launch a new suit on our website, but it’s another thing to involve your existing community in something much bigger. Even in the prelaunch, we’ve been amazed at how excited customers are getting.” — Danny Parisi

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What we’ve covered this week

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Jetblack’s Jenny Fleiss: ‘We’re democratizing luxury’
“I have a pretty specific view on marketing: It’s leveraging our point of view as consumers. How do we want to find out about new products and brands? What is the most effective, trusted way?”