SWOT analysis is a critical tool for businesses in the process of continuous improvement of businesses. SWOT analysis helps a brand determine its competitive strength as well as its weaknesses. This gives the brand a chance to turn its weaknesses into strengths. Additionally, the company gains knowledge of the opportunities in the market so that they can swiftly take advantage of them and ensure the brand neutralizes whatever threats that could be in the market.
Fabletics is an American-based global brand that deals with inactive lifestyle sportswear and accessories for both men and women commonly referred to as athleisure. The company operates a membership-based business model with an approach that is complemented with 64 brick-and-mortar stores. Here is the brand’s SWOT analysis.
Fabletics – At a Glance
| Name | Fabletics |
| Website | www.fabletics.com |
| Founders | Kate Hudson, Adam Goldenberg, Don Ressler |
| Chief Executive Officer (C.E.O.) | Don Ressler |
| Headquarters | El Segundo, California, U.S |
| Type of Corporation | Public |
| Year Founded | July 2013 |
| Revenues (2019) | $500 million |
| Key Products/Services | Fashion, Apparel & Accessories |
| Key Competitors | Lululemon, Under Armor, Sweaty Betty, Nike, Farchercise, Adidas, Puma, New Balance, Fila, |
Fabletics’s Strengths
Competitive Pricing
One of the brand’s biggest strengths is its cheaper pricing compared to other high-end brands. Fabletics’s VIP pricing is $49.95, with huge discounts in the first month and preceding months for the VIP memberships. Comparable offers include $69 for athletes, $50-$130 for Nike, and $70-150 for Lululemon.
Fabletics is, therefore, the best option for people who are looking for style at affordable rates. This is an advantage as it is more appealing to price-sensitive individuals; this forms the majority, particularly with the hard economic time’s occasion by COVID, among other factors.
VIP Membership with Offers
The brand seemingly has only types of memberships; VIP and non-VIP. The VIP membership goes for $49.94 per month with offers that are communicated directly to the emails. This keeps members shopping and curious for more offers.
Heavy Online Presence
The brand has a heavy online presence and recently started to roll out brick and motor stores. With the internet becoming ubiquitous, there is a huge presence of customers online from all over the globe. In addition, this option is much cheaper and more efficient in targeting particular niches.
COVID brought in a surge of customers, which got the company off-guard and had to implement a new search technology known as Search spring to enable users to have a better search experience. A better online experience led to an increase in revenues. Given this, the paradigm shift from COVID is likely to go on for the foreseeable future; the brand will need more online presence to ensure more efficiency and excellent online experience to harness this growth.
Great Product
Fabletics offers a strong product; great activewear that is also fit for casual use. The brand offers various colors with collections for Motion365, PowerHold, PureLuxe, SculptKnit, and Seamless. It serves Yoga and studio, gym, running, and workout activities. This diversification within the product is critical for offering a wider solution range for more scope.
Fabletics’s Weaknesses
A Complex Business Model
While the brand offers a cheaper solution, there are a number of concerns from customers arising from the model with particular reference to the monthly charges.
Many users find it challenging to keep up with canceling purchases monthly to avoid being charged in months when they will not make purchases. Even with the company sending reminders monthly, it becomes inconvenient to monthly have to revisit the site and make earlier arrangements to avoid the back and forth with customer support to negotiate charges.
Conservative Growth
The brand has had a conservative growth in its brick-and-mortar stores. In 2016, the brand had project growth to 100 stores. In 2018, the brand revisited its plans and revealed intentions of realizing those plans and equipping 100 destinations with interactive tools within the stores.
We are in 2021, and the brand has managed to attain 64 stores. The brand needs to consider more strategic planning tools that offer realistic projections, ones that are achievable and within reasonable timelines. This will ensure more belief and strength to achieve goals for the brand.
Less Dominant Position in the Market.
Fabletics is ranked at positions 65 and 123 by similarweb.com and today.yougov.com, respectively, in the industry. This calls for increased effort on the part of Fabletics to scale up to higher heights. Thankfully, the brand is already making great moves with increased popularity by the day.
Additionally, the ubiquitous nature of the internet provides a level playing field for all companies globally. Fabletics needs to invest more in differentiation, specialization, technology, innovation, excellent customer care, marketing, and advertising to stand out of completion.
Huge Dependence on the North American Market
The brand has its operations in the North American market. The overdependence on one market could challenge the brand’s future operations if an adverse event affects the single market. There is need for geographical risk diversification.
Fabletics’s Opportunities
Technology and Innovation
Given that the athleisure industry is characterized by shorter product lifespans, Fabletics needs to invest in technology, innovation, data analytics, and human talent to ensure more unique innovations within shorter periods to capture the market’s attention and grow its client base.
More Geographical Expansion
The brand has concentrated its operations in North America region alone. North America is, however the home to many of its competitors. This goes to means that the North American market could soon be saturated with athleisure products and quickly reach maturity.
Fabletics could explore expansion to emerging markets that are more aligned to the Fabletics offering of great style at discounted prices. The brand could experience faster and double-digit growths in these markets, more than it would in North America.
Projected Growth in the Industry
The activewear industry is expected to grow by USD 157.1 billion between 2020 and 2024 by 11%. Factors that will contribute to this growth include an increased awareness of a healthy lifestyle to curb the spread of lifestyle diseases.
Paradigm Shift as a Result of COVID
COVID brought in a paradigm shift causing people to work more virtually. This drove many people online for shopping, working, and many other functions. This means more purchases online for Fabletics and calls for streamlining more of their online presence to enhance the customer experience for optimal revenues.
In addition, working virtually gives workers the luxury of working in casual wear. Fabletics offers customers activewear attire that can also be used as casual wear. If this trend will go on, there are expected to be more purchases to enhance workouts at home as people are working from home.
Fabletics’s Threats
Stiff Competition
Fabletics faces stiff competition from already established brands like Ares Sportswear, Varley, Tracksmith, Tilly’s, Lululemon, Under Armour, Sweaty Betty, and Nike, among others. In addition, there are smaller brands and new entrants into the market
Shorter Product Lives
The athleisure and sports market are characterized by-products that have shorter lifespans in the market. More and more new design creations keep evolving in the market. This means brands have to make sales within shorter periods of time if they achieve optimal revenues. Products that last longer on the shelves become costly as they hold capital invested in them as their worth goes down. This could jeopardize the brand’s profitability.
Conclusion
Fabletics is a strong brand with a strong product offering at great prices with discounts. This gives it a competitive edge, particularly in markets that are price sensitive. However, the company needs to continue enhancing its model to ensure fewer customer concerns arising from the company’s model; this could greatly enhance the brand’s customer rating for greater scores and greater network effects.
