JUSTFAB INC. – A CASE STUDY

HISTORY & MISSION

The story behind the inception of JustFab Inc. (previously called JustFabulous) goes back to the early 2000s when Adam Goldenberg and Don Ressler, JustFab Inc. CEOs, worked in the Alena product marketing division of Intermix Media, the parent company of MySpace. Over the next few years, both men dabbled with a few controversial products including Sensa, a weight loss product claimed to help people lose 30 pounds in six months by “eating yourself skinny”. In 2006 and 2007, the pair started a Raw Minerals makeup line under Intelligent Beauty, which got sued by the owners Bare Minerals for making a fraudulent copy of their product (Maheshwari, 2016).

In 2010, Goldenberg and Ressler launched JustFab Inc. described on the company’s website as “a personalized shopping experience that gives you access to professional stylists and their hottest picks. Every woman deserves to have the season’s latest trends and style expert advice regardless of her location, schedule or budget. So we

JustFab CEOs

combined the convenience of online shopping with the luxury of having a personal shopper” (JustFab, 2010). Through a series of acquisitions and rapid growth, the company has grown globally and is now present in the United States, Canada, Spain, Netherlands, Germany, France, England, Denmark, and Sweden (JustFab, 2010).

The Mission statement taken from JustFab’s website says: “We aim to give our members the celebrity treatment through a fun and engaging personalized shopping experience offering an extensive collection of on-trend shoes, handbags, denim, and accessories.” (JustFab 2013).

 

ORGANIZATIONAL STRUCTURE

The headquarter of JustFab Inc. is located in El Segundo, California and as of 2015 had a company size of 2015 employees. Through its acquisition of related businesses in its industry namely ShoeDazzle, FabKids, and Fabletics, and its international presence in several countries, JustFab’s organizational structure has quickly moved from strictly a functional structure to a mix of functional and divisional structural grouping (JustFab, 2015 and Daft, 2010). In an attempt to keep all of its portfolio business relatively independent of each other, there appears to be very little utilization of resources across each business as portrayed through the company’s job listings page.

While a lot of the company’s business is not public, from my research, I have an understanding of JustFab’s organizational structure. At the top of the company’s organizational chart are the CEOs, Goldenberg and Ressler followed by Kate Hudson and Kimora Lee Simmons as co-founder of Fabletics and president/creative director, respectively. Other key people with significant influence on JustFab Inc.’s business include Josh Hannah as director and investor, and Traci Inglis as senior vice president of marketing, followed by over 485 employees in its chain of command (LinkedIn and Craft, 2015). See Appendix A for likely structure of the company’s organizational chart.

 

ENVIRONMENT & INDUSTRY

JustFab Inc. is one of the many online subscription-based companies in the retail business to consumer clothing industries fighting to get an increase in market share in a turbulent environment characterized by dynamic changes in styles and consumer needs. On Hello Subscription, a blog dedicated to reviewing subscription clothing programs, there are over 189 clothing subscription programs from over 1500 subscriptions. This is a booming industry considering that subscription programs were almost inexistent less than a decade ago (Hello Subscription, 2016).

In today’s society, fashion enthusiasts want to get their hands on clothing and shoes they see on the runway immediately. Businesses that excel on having quick turnaround time from runway to street wear at an affordable price such as Zara and H&M are guaranteed to make more sales (and probably more revenue) than their competitors who jump in later (Denning, 2015). Fast fashion is the order of the day and JustFab Inc. has mastered the art of finding out what its customers need and providing the answers to their needs in a timely fashion through the release of new styles (shoes, clothes, bags, jewelry) monthly at an average price point ($39.95) that gives the company a higher competitive advantage.

 

PROBLEM

JustFab Inc. is a company that has exceled in growth and sales while other companies crumbled. In only six years, the company has grown to over 35 million subscribers locally and internationally from the United States and Canada to Spain, Netherlands, Germany, France, England, Denmark, and Sweden (JustFab, 2010). The company prides itself in its ability to answer consumer needs efficiently through the information its engineers and scientists are able to gather about customer behavior to efficiently meet demand (Page, 2015). Another key strength of the company is that it designs products in house and sources manufacturing and production in Asia to cut on cost. This cost-saving is then passed down to the consumer in addition to cutting out the middlemen (i.e. retail and departmental stores) (JustFab, 2010).

To date, JustFab has raised an unprecedented $249 million in 5 rounds of funding from 8 investors through Series A, B, C, and D rounds (CrunchBase, 2016). Being well aware that there is only so much that investors are willing to give towards a start up before demanding to see benefits (i.e. payout or exit strategy), there is a demand to meet the expectations of investors. Albeit the biggest challenge for JustFab Inc. at the moment is to meet the desires of investors through increased revenue (while keeping costs down). Following are three recommendations that the company can implement to boost revenue that have not already be considered or made public:

RECOMMENDATION 1: EXPANSION OF SUBSCRIPTION

The traditional clothing subscription service occurs by changing customers a monthly flat fee. Over the six years of its existence, JustFab has relied on this model of charging members $39.95 a month for access to VIP pricing. Some subscription services like Rocksbox has gone beyond this model by offering a cheaper membership fee of $19 with the option of applying $10 in store credit every month bringing down the cost for customers to $9/month. Another strategy being used by ScentBird, a perfume subscription company, is the option of purchasing a yearly membership plan that comes at a discount with additional perks like exclusive sales.

A few months ago, I heard that JustFab is beta testing a program for one-on-one stylist consultation with top spenders on the company’s website. If this program successfully kicks off, JustFab can utilize a lower membership fee like Rocksbox. The company can expect a higher membership registration and subsequent order rate with this program because as seen with Rocksbox, if a client decides not to keep any product sent to her that month, she lose out on the $10 store credit and the membership fee. A model like this will entice customers to make a purchase.

With the current system the company has in place, JustFab Inc. should look into expanding into a yearly subscription model. Client will be a flat fee and get access to a certain number of clothing (shoes, clothes, jewelry, and handbags) a year. So whenever the member needs anything, they can simply sign onto the website and place an order. This model will increase the switching cost (Porter’s 5 Forces) of customers to other competitors and will serve as a guaranteed revenue stream for the company as well as reduce rate of membership cancellation (Daft, 2010).

 

RECOMMENDATION 2: MENSWEAR LINE

It is general consensus that menswear cost more money than womenswear. A recent study found that men spend $10 more than women each month on clothing and accessories, 20 percent more time shopping than women each week, are twice as likely to shop online than women, and the menswear market is expected to expand almost twice the rate of womenswear (Cauterucci, 2016).

Image from Pinterest

This research goes to show that JustFab Inc. stands to make a promising chance of increasing its revenue by branching into the menswear industry. The company has already honed its skills on understanding the market for women’s’ clothing and should be able to transfer this efficiency into the menswear segment. This is the perfect opportunity for JustFab to become a leader in the menswear segment as clothing subscription industry is currently in the growth phase of the industry life cycle. Another benefit for the business is its ability to use its 35 million members more readily expand into the menswear segment. Along with this expansion comes the likely benefit of economies of scale and the ability to have more bargaining power when sourcing for manufacturers in Asia.

JustFab along with other U.S based clothing retailers have in recent years faced fierce price competition from international sellers based mostly in Asia. Majority of this competition appears to be in the womenswear category. By leveraging its international presence and its divisional structure, JustFab may be able to gain a significant market share in the online shopping clothing industry. The company has done a terrific job expanding into children clothing, plus size clothing, and athletic clothes so menswear is unlikely to be a difficult task for JustFab Inc. to accomplish.

 

RECOMMENDATION 3: ONE-STOP CLOTHING

Clothing mega-houses like Asos (U.K) and Zappos (U.S.A) make a lot of money by positioning themselves as a one stop shop for men and women clothing, and shoes, respectively. As JustFab continues to grow nationally and internationally, I believe that the company can increase its revenue by repositioning itself as the one-stop shopping for the family (men, women, and children). The company possesses a diverse portfolio of businesses and clothing and can create synergy across its business by offering a single platform for shopping similar to the technique that Gap, Old Navy, Banana Republic, and Athleta are doing on their websites.

Image from ShoeDazzle.com

At the moment, JustFab is focused on increasing its subscription-base in Europe and the United States through acquisitions of businesses in its segment and word-of-mouth referral from members who get $10 store credit for each new paying member (JustFab, 2010). While this strategy has been effective, I believe that the company has to start looking for new ways to turn its robust membership into higher revenue generation. Current media advertisements have focused on portraying each business under the JustFab umbrella of business as a single, stand-alone company. For customers to view JustFab Inc. as a one-stop shopping destination, the company has to reposition itself in the minds of consumers.

JustFab needs to take a proactive approach in pioneering new ways that it can tap into the pockets of its customers, thus, satisfying the needs of its investors as well as its customers. Well known companies like Amazon started with books and quickly grew into a household name. Similarly, JustFab started as a shoes-only subscription service and as grown to include clothes, jewelry, and handbag. I believe there is still room for growth not only into the menswear department but by having a crossover in its reach across its portfolio firms making JustFab Inc. a one-stop shop for trendy and affordable clothing for women, men, and children.

 

MANAGERIAL IMPLICATION

In order to generate more revenue outside of recruiting new membership subscription I believe that JustFab Inc. needs to consider expanding its subscription methods, entering and penetrating the menswear subscription segment, and morphing into a one-stop online store. These three recommendations appear feasible and well within the company’s capabilities.

In terms of expansion of the company’s subscription model, the engineering and marketing departments need to work together to analyze and create a model that will be suitable for the company while maximizing profit. The marketing department can work on a trial run of the potential new models by performing a small consumer study similar to the ones that are sent out to consumers after the purchase and receipt of an order. Based on customer reaction and feedback, JustFab can roll out its expanded subscription service.

For the expansion into the very lucrative menswear product line, the in-house design team, marketing, and procurement departments need to work together in order for this aspect to come to fruition. Again before such a large investment, consumer feedback would be very helpful. Managers may need to recruit and hire designers with experience in menswear to ensure that new styles blend seamlessly with the mission of the company. Production and procurement has to ensure that JustFab can efficiently source its product at the best price and quality that matches the company’s price points.

To be viewed as the one-stop shop for online clothing subscription, JustFab needs to harness the unrealized synergy between its portfolio brands. All the departments and divisions of the company need to work together for this to be achieved. The engineering department can restructure the layout of all the separate firms to include a link to each other similar to what is done on the websites on Old Navy, Gap, Banana Republic, and Athleta. The marketing department and social media staff can help reposition the
company through frequent advertisement and social media posts across the company’s social networks. On Facebook alone, JustFab has almost 6 million Fans, ShoeDazzle 3.4 million, Fabletics 2.8 million, and FabKids 1.1 million not adding the combined several million followers these businesses have on other social network.

JustFab Inc. as a company can continue to expand its mission of giving members the celebrity treatment and extensive selection of products through the implementation of these creative and achievable solutions that will also increase the company’s revenue.

 

ORGANIZATIONAL CHART (Appendix A)

*Organizational chart is based on information gathered online from JustFab.com, Craft.co, and JustFab’s LinkedIn employee profiles.

SWOT (Appendix B)

*Recommendations above address threats of JustFab Inc.

 

REFERENCES

1. (2010). JustFab frequently asked questions. Retrieved May 3, 2016, from http://www.justfab.com/faq.htm
2. (2013). JustFab cares – Mission Statement. Retrieved May 3, 2016, from JustFab Cares, http://www.justfab.org/
3. Daft, R. L.  (2010). Organizational Theory and Design (10^th). Cincinnati, OH: South-Western College Publishing.
4. JustFab Inc. (2015). JustFab careers – job openings. Retrieved May 5, 2016, from JustFan Inc, http://corp.justfab.com/?action=careers.openings
5. Denning, S. (2015, March 13). How agile and Zara are transforming the US fashion industry. Forbes. Retrieved May 7, 2016 from http://www.forbes.com/sites/stevedenning/2015/03/13/how-agile-and-zara- are-transforming- the-us- fashion-industry/#9d6d404c557f
6. Page, P. (2015, July 2). Today’s top supply chain and logistics news from WSJ.The Wall Street Journal. Retrieved May 8, 2016 from http://www.wsj.com/articles/todays-top-supply-chain-and-logistics-news-from-wsj-1435834202
7. (2016).JustFabulous Investors. Retrieved April 18, 2016, from CrunchBase, https://www.crunchbase.com/organization/justfabulous/investors
8. Cauterucci, C. (2016, February 4). Men spend more money and time on clothes shopping than women. Retrieved May 8, 2016, from http://www.slate.com/blogs/xx_factor/2016/02/04/men_spend_more_money_and_time_on_clothes_shopping_than_women.html
9. (2015, August 16). JustFab – JustFab Business Summary. Retrieved May 9, 2016, from Craft, https://craft.co/justfab
10. Hello Subscription. (2016). Women’s Clothing & Fashion Subscription Boxes. Retrieved May 8, 2016, from hello subscription, http://boxes.hellosubscription.com/womens-clothing-subscription-boxes/#
11. (2010). About JustFab – Who We Are. Retrieved May 8, 2016, from JustFab, http://www.justfab.com/story.htm
12. JustFab Inc. Retrieved May 9, 2016, from LinkedIn, https://www.linkedin.com/company/justfab
13. Maheshwari, S. (2016). The dark, Scammy history of JustFab and Fabletics. Retrieved May 8, 2016, from Business, https://www.buzzfeed.com/sapna/justfab-the-billion-dollar-startup-with-a-dark-past?utm_term=.mwpVxEn0b#.aqAQ7NE2d

 

JustFab Inc. – Organizational Complexity

JustFab Selection: Image from the web

1: How complex is your organization internally?

JustFab Inc. is a privately-held clothing subscription e-commerce company that was founded in 2010. JustFab Inc. had a company size of 485 employees as of 2015. The company’s headquarters is located in El Segundo, California. Don Ressler and Adam Goldenberg are CEOs of the company. JustFab Inc. has a global presence in the US, Canada, Germany, the United Kingdom, France and Spain through its portfolio of businesses some of which were acquired over the years namely: JustFab, ShoeDazzle, FabKids, and Fabletics. Other people with major influence on the company are Kate Hudson who is a co-founder of Fabletics, Kimora Lee Simmons as the president and creative director, Josh Hannah as director and investor, and Traci Inglis as senior vice president of marketing (LinkedIn and Craft, 2015).

JustFab Inc. has an interesting structural design with the CEOs and key people on the top of the chart then each portfolio separated into different divisions without any utilization of resources across its portfolio as can be seen from the company’s job listings page. Somewhere in the chart, there is an international division. I picture the organizational structure of JustFab Inc. with a mix of functional and divisional grouping (JustFab, 2015 and Daft, 2010).

JustFab Selection: Image from the web

Under this organizational structure, each business under JustFab Inc. is responsible for managing its resources among its functional areas. A potential employee applies for a job in an area of interest from the company’s career’s page. Some jobs are classified by category and further separated by portfolio business (e.g. under Art & Creative: copywriter – FabKids and copywriter – ShoeDazzle) while others are classified by functional department (e.g. Staff Accountant and Manager of Financial Systems). Given the share size of JustFab Inc. with over 35 million members globally and the organizational structure across its portfolio businesses, the internal structure of the organization is symmetric (JustFab, 2015).

2: Locate your organization on the figure, what is the complexity?

Based on the way the JustFab Inc. system is set up, you can see that there are many subunits horizontally under each portfolio business. Each of the businesses have their own managers and supervisors and at some point up the hierarchy, they is a merger of supervision prior to reaching the investors and directors. So not only is the vertical differentiation of JustFab Inc. very deep (several layers), there is also high horizontal differentiation in task specialization among the business units. A look at JustFab Inc. job posting portrays this hierarchy (JustFab, 2015).

This information puts JustFab Inc. in the symmetric area of the graph with high horizontal and vertical differentiation. Tasks are broken down horizontally into subunits under each business with some parallel processing of work across the business. For example, there is only one human resources department that takes care of recruiting across the business. Vertically, there are many vertical reporting levels in the organizational chart.

#3: Does your organization’s complexity fit its structural configuration?

The organizational complexity of JustFab Inc. and the classification the company falls into are a match. The company uses a matrix structure through the combination of functional and divisional configuration in its matrix form. Through this process, the company can focus on different segments of the market relatively independently. For example, ShoeDazzle and JustFab target young adult females and professionals, Fabletics is geared towards fitness enthusiasts, while FabKids targets families with young children. The company also has international presence in other countries which have relative independence in their activities. By functionally partitioning tasks into smaller specialized activities, JustFab Inc. can efficient in its process while providing adequate vertical layers of control in each division.

#4: Is there “fit” across the organization’s components? What do we know now about how our organization aligns across these categories? What would make them more effective? Should your organization change its structure based on its complexity?

The organizational complexity and configuration of JustFab Inc. matches up with its environment, company strategy and organizational goals. The clothing industry where the company is positioned is always changing and very turbulent with new trends and styles hitting the runway and the streets constantly with changes in season. The organization is an analyzer with innovation and consistently harnesses its engineers and scientists in analyzing trends and tastes of its customers to create new and exciting styles that members of the program are interested in buying. The organizational goals of the company is structured almost equally for both efficiency and effectiveness(Page, 2015).

On efficiency (input, resources and costs), JustFab looks at customer buyer behaviors to give itself a better competitive advantage over other firms in the industry and manages its resources and costs through collaboration with channel partners so keep merchandise costs to the minimum. The company prides itself on products that cost only $39.95 and in order to remain in the position with increasing costs of production, the company has to ensure that it manages its resources efficiently.

JustFab Plus Size: Image from JustFab.com

On effectiveness (outputs, product/services, and revenues), the company focuses on its outputs in products as well as customer services. As the company grew and the market place grew more competitive, JustFab grew from only shoes to include handb
ags, clothing, and jewelry and recently introduced its plus size clothing line (K.N, 2016). The company definitely listens to its customers.

JustFab Inc. is at the forefront of clothing subscription and over the years has brought in more and more revenue ($504 million in 2015 and on track to making $675 million in 2016) as it has grown in size and paying members. The company has done a great job adapting to a complex organizational design as its operating environment became more complex. For JustFab Inc. to get/remain more effective, the company needs to be able to adapt to changes in its environment and should not be comfortable with a rigid structure because its environment is turbulent(Maheshwari, 2016).

 

REFERENCE

1. (2015, May 12). JustFab Business Summary. Retrieved April 23, 2016, from Craft, https://craft.co/justfab
2. Daft, R. L.  (2010). Organizational Theory and Design (10^th). Cincinnati, OH: South-Western College Publishing.
3. JustFab Inc. (2015). JustFab careers – job openings. Retrieved April 18, 2016, from JustFan Inc, http://corp.justfab.com/?action=careers.openings
4. K, N. (2016, April 1). Behind the scenes: JustFab’s plus size capsule collection. Retrieved April 24, 2016, from The FAB life,http://blog.justfab.com/2016/04/justfab-plus-size/
5. JustFab Inc.. Retrieved April 24, 2016, from LinkedIn, https://www.linkedin.com/company/justfab
6. Maheshwari, S. (2016, January 16). Fabletics and JustFab keep growing in face of criticism. Retrieved April 24, 2016, from Buzzfeed,http://www.buzzfeed.com/sapna/justfab-fabletics-target-675-million-in-sales-this-year#.ccD95WL0o
7. Page, P. (2015, July 2). Today’s top supply chain and logistics news from WSJ.The Wall Street Journal. Retrieved April 24, 2016 from http://www.wsj.com/articles/todays-top-supply-chain-and-logistics-news-from-wsj-1435834202

 

 

 

Environmental Complexity: JustFab Inc.

JustFab Inc. is an online subscription-based company that serves customers in the ever-changing fashion/clothing industry. The company has made calculated moves throughout the years to ensure its survival, which will be discussed below.

#1: List out as many elements affecting your company as you can for each of the sectors below.

INDUSTRY:

• Significant competitors:
  • In the shoe subscription industry, JustFab’s significant competitors are ShoeMint, and Sole Society.
  • In the clothing subscription industry, JustFab’s significant competitors include Stitch Fix, and Le Tote (Nelson 2013).

• Competitiveness:
  • All the products offered for sale on JustFab.com are JustFab’s in-house brand. ShoeDazzle, a JustFab sister company specializing in the shoe, clothing, and jewelry subscription offers a variety of brands including ShoeDazzle-label, designer-brand and products from JustFab (JustFab Inc. 2015). JustFab Inc. is an online-online subscription store and as such all of its revenue comes from its online presence spread across its portfolio brands (JustFab, FabKids, ShoeDazzle, and Fabletics which carters to different demographics of the population (JustFab Inc. 2015). JustFab’s online free shipping on orders over $39.95 makes the company more competitive in an economy where over 87% of online shoppers say that free shipping (and free exchanges) makes them more likely to complete an online purchase (Roesler 2014).

• Industry size:
  • JustFab operated in the online clothing subscription industry and they have aligned themselves in the following sub-industry classifications:
    • Retail
    • Manufacturing
    • Subscription box is a relatively new industry pioneered by Birchbox (Pacificstand 2014).
    • In late 2013, JustFab predicted $400 million in revenue for 2014 and in 2014, predicted an anticipated $500 million for 2015 across its four brands (Carney 2013).

JustFab Industry. Image from the web

RAW MATERIALS:

• Suppliers:
  • JustFab produces many different styles of clothing, shoes, and fashion accessories to meet the need of its diverse subscribers. The company does not reveal who its suppliers are or where its suppliers are located. The company says it cuts out the middlemen, namely retail stores to bring its products directly to customers without the high price tag (JustFab 2010). Here is the different focus of each of JustFab’s brands:
    • JustFab – JustFab offers customized selection of shoes, handbags, jewelry and denim to give members a personalized shopping experience at an affordable price (Fab Inc. 2015)
    • FabKids – FabKids offers stylish and affordable children’s apparel for busy parents ((Fab Inc. 2015)
    • ShoeDazzle – ShoeDazzle offers monthly selection of ShoeDazzle-label and designer-brand shoes, handbags, clothing and accessories to members as well as a curated showroom of top picks to meet the member’s style needs ((Fab Inc. 2015)
    • Fabletics – Fabletics offers lifestyle and activewear clothing focusing on fit, function and style for the active woman ((Fab Inc. 2015).

• Vendors:
  • A recent search does not reveal any vendors for JustFab but some of JustFab’s brand shoes and purses are available for purchase on ShoeDazzle. Also, older season styles of JustFab can be found online at Heels.com, Amazon.com, and in store at Ross. Used clothing and shoes available for individual sale on eBay, and Tradesy.

• Real estate:
  • JustFab has no physical retail stores in the US, Canada, Germany, France, UK, or Spain
  • Fulfillment centers in Louisville, KY
  • Headquartered in El Segundo, CA
  • Satellite office in Charlotte, NC (PR Newswire 2011)

• Services:
  • JustFab designs and sells fast fashion clothing
  • JustFab is an online only clothing subscription retailer of its brand products
  • JustFab offers styling tips to members and the general public on its blog (JustFab 2016)
  • JustFab occasionally hosts fashion contests open to different geographic locations

HUMAN RESOURCES:

JustFab Employees. Image from JustFab Blog

As indicated in our textbook, the human resources sector is a significant concern to every organization.

• Labor market:
  • JustFab Inc. offers many different career opportunities across all four of its portfolio brands separated into 15 different major categories: (JustFab Inc. 2015)
    • Accounting and Finance
    • Administrative and Legal
    • Art & Creative
    • Business Intelligence and Analytics
    • Customer Relationship Management (CRM) and Marketing
    • Fulfillment Center
    • Human Resources and Recruitment
    • Internships
    • Information Technology (IT) and Engineering
    • Member Services
    • Merchandising and Design
    • Operations and Supply Chain
    • Other
    • Product and UX/UI
    • Public Relations and Social Media
    • Retail Store (for its Fabletics brand)
    • Sourcing and Production

• With the merger of JustFab with ShoeDazzle and the acquisition of Fabletics and FabKids, JustFab is the largest online subscription service provider with over 35 million members worldwide (JustFab Inc. 2015 and Chang 2013)

• Employment agencies:
  • JustFab’s career opportunities are advertised directly on their website across its portfolio brands as well as on Indeed.com and Monster.com.

• Universities/Unions:
  • None

JustFab’s HQ: Image from the web

FINANCIAL RESOURCES:

• Stock markets:
  • JustFab is not publicly traded

• Banks:
  • None

• Private investors:
  • JustFab was founded by Adam Goldenberg and Don Resler in 2010. To date, the company has raised $249 million in 5 rounds from 8 investors from Series A, B, C, and D rounds. Anyone can join as a member for a one-time fee of $20. Members receive an annual dividend share of their profits and is based on what the individual purchased at REI during that year (CrunchBase, 2016).

MARKET:

JustFab Clothing & Shoes. Images from the web

• Customers:
  • JustFab’s customers are diverse in terms of demographics and geography. The company targets children with its FabKids division, trendsetters with JustFab and ShoeDazzle, and active women with Fabletics across the United States, Canada, France, Spain, Germany, and the United Kingdom (JustFab 2016).

• Potential users:
  • Potential users of JustFab and its portfolio company are mostly young females involved in exercise and health, fashion, busy mothers, and priced-sensitive.

TECHNOLOGY:

JustFab Website. Image from the web

• Techniques of productions:
  • JustFab is proud of designing its products in-house in California. Production is done through its suppliers and JustFab cuts retail stores by delivery products directly to its customers. The company’s core strategy based on low cost leadership strategy is to bring the best style that is also affordable to its customers worldwide.

• E-commerce/Information Technology:
  • JustFab administers a style quiz during the registration process to get an understanding of the kind of products its member wants. Response to the style quiz can be changed anytime to get a different curated content.
  • JustFab offers a very large selection of clothing and shoes to pick from. Their shoe collection is unrivalled by any other shoe subscription service. The website is also easy to use and a few months ago, JustFab introduced a search bar function that allows shoppers to search my style, color, and product description.

ECONOMIC CONDITIONS:

• Recession:
  • If there is economic recessions, JustFab’s revenue will be negatively impacted because the company depends on consumer purchases as its revenue stream.

• Unemployment rate:
  • As a directly proportional relationship with recession, if there is an increase in unemployment rate, sales and subsequently profits will be decrease because customers are not going to spend as much on shopping for unimportant things.

• Inflation rate:
  • An increase in inflation rate will cost JustFab a lot of money because the company depends on the lower cost of production to be able to offer its customers lower priced products. If the cost of production increases, the company will be forced to absorb the cost or pass it on to its customers through increase in products price. As the company uses low-cost leadership strategy, the inflation will be a disadvantage to the business.

• Growth:
  • JustFab has made the strategic decision to expand to other countries outside of The United States to Germany, Canada, the United Kingdom, France, and Spain. JustFab acquired Fab Shoes, a European e-commerce shoe club in France and Spain to increase its market penetration in Europe (JustFab 2016 and Lunden 2013).

GOVERNMENT:

• Regulations:
  • JustFab is under the jurisdiction of applicable local, state, and federal laws, as well as all international in the countries where JustFab does business. JustFab also instituted its own Ethical Sourcing Code for all its suppliers. In 2014, JustFab settled a lawsuit for $1.8 million in Northern California on claims that the company misled customers about its subscription fee service (JustFab 2016 and Associate Press 2014)

• Taxes:
  • JustFab tax information is not publicly available

SOCIOCULTURAL:

JustFab CEOs Don Ressler and Adam Goldenberg

 

• Age:
  • JustFab targets the young, professional women focused on trendy and affordable fashion. With the company’s FabKids brand, JustFab also reaches mothers who want their children to look stylish. At this time, JustFab does not have any brand that carters to men.

• Values:
  • JustFab has strategically position itself to providing its services to women and underserved youth in the community and internationally.
  • Taken directly from JustFab’s corporate website, this is what JustFab Cares stands for:

“JustFab was created to offer a fresh mix of high-fashion looks at affordable prices. We aim to give our members the celebrity treatment through a fun and engaging personalized shopping experience offering an extensive collection of on-trend shoes, handbags, denim, and accessories.

JustFab Cares As a company that serves and celebrates its community of over 11 million fashion-savvy women, JustFab is dedicated to positively impacting women and underserved youth through cause marketing partnerships, charitable events and donations, while also supporting a broad range of causes in order to help improve the lives of those in our communities on both a local and global level.

JustFab is happy to review opportunities for us to work with your organization. Please submit partnership or sponsorship proposals to media@justfab.com. While we are unable to support every opportunity that is submitted, we carefully consider and evaluate each proposal for its potential to allow us to most effectively invest our time and resources in serving our communities.” (JustFab Inc. 2015)

• Work ethic:
  • Based on 83 reviews from glassdoor.com, 75% of employees say they will JustFab to a friend and 98% of reviewers say they approve of the CEO, Adam Goldenberg and Don Ressler. Overall, the company ranked as a 3.9 out of 5 (Glassdoor, 2016).

INTERNATIONAL:

• Competition from and acquisition by foreign firms:
  • As REI is a private co-op and very proud of their business model, they will most likely never change their business structure unless forced.

• Entry into overseas markets:
  • JustFab has established itself as a force to be reckoned with both locally and internationally. JustFab made a major acquisition of an undisclosed amount of Fab Shoes located in France and Spain of an undisclosed amount. The company also ships to Canada and (Lunden 2013).

 

#2: Is the organization internationally diversified? 

JustFab’s International Location

• JustFab is currently located in six countries: United States, Canada, France, Spain, Germany, and the United Kingdom and currently has no brick and mortar stores (JustFab, 2016).
• In the clothing subscription business model, major competitors of JustFab are Le Tote, Stitch Fix, Shoe Mint, and Sole Society. In the bargain clothing industry, major competitors of JustFab include stores like Forever21, H&M as well as Asian retailers who are quick to undercut the price of certain products that JustFab offers.
• At this point, it would be advisable for JustFab to continue its expansion in Europe because its European membership base is growing fast and JustFab has a lower customer acquisition cost in Europe compared to the United States. The company also recently announced its expansion of its clothing line sizes to include plus size, which is a great move considering that one-third of the US population is consider overweight or obese (Carney 2013 and K.N, 2016).

 

#3: How complex and unpredictable is the organization’s environment? Which environment does your organization exist in?

JustFab operate in a Simple-Unstable environment. There are a small number of external elements affecting the company and those elements are quite similar globally. The fashion and clothing industry is a very fast-paced system and as such the elements change frequently and is unpredictable. For example, JustFab is constantly faced with the challenge of identifying the next big trend that it has to design and produce, making it ready for its fast fashion shoppers when those items are in demand else the company would risk losing its competitive edge. JustFab exists in the market sector environment providing its products and services directly to its customers.

 

#4: Does your organization’s strategies and goals fit their environment?

	Type 1	Type 2	Type 3	Type 4
Environment	Calm	Varied	Locally stormy	Turbulent
Strategy types	Reactor	Defender	Prospector	Analyzer with innovation Analyzer without innovation
Organizational goals	Neither	Efficiency	Effectiveness	Efficiency and Effectiveness

JustFab does an exceptional job analyzing all the elements of the environment surrounding the clothing industry and uses that information combined with its vast customer demographics to curate trendy styles that its fashion conscious subscribes need and its no wonder that the company continues to grow internationally.

 

#5: Did your organization align across environment, strategy type, and organizational goals?

Yes, I believe that JustFab aligns across environment, strategy type, and organizational goals. Any company in the fashion industry knows that the industry is aware that although elements may be few (simple), the environment is extremely unstable as style changes very frequently. JustFab is the first shoe subscription service and the company has done a terrific job staying competitive in that industry while others suffered or went out of business.

In this regard, I would recommend that JustFab Inc. continues its international expansion to other European countries. The company also needs to come up with ways to clean up its name as a fraudulent company because of inappropriate disclosure of its monthly subscription model.

 

REFERENCE

Associated Press. (2014, October 25). Justfab settles lawsuit for $1.8 million. Retrieved April 18, 2016, from The Washington Times, http://www.washingtontimes.com/news/2014/oct/25/justfab-settles-lawsuit-for-18-million/

Carney, M. (2013, May 23). JustFab acquires the Fab shoes in search of European domination, approaches $250M revenue rate. Retrieved April 18, 2016, from News, https://pando.com/2013/05/23/with-250m-revenue-rate-in-site-justfab-acquires-the-fab-shoes-in-search-of-european-domination/

Carney, M. (2014, August 28). JustFab raises $85M at what sources say is a $1B valuation. Retrieved April 17, 2016, from News, https://pando.com/2014/08/28/breaking-justfab-raises-85m-at-what-sources-say-is-a-1b-valuation/

Chang, A. (2013, August 21). ShoeDazzle, JustFab merger: World’s largest online shoe subscription?. Retrieved April 18, 2016, from LA Times, http://articles.latimes.com/2013/aug/21/business/la-fi-tn-shoedazzle-justfab-merge-20130821

CrunchBase. (2016). JustFabulous Investors. Retrieved April 18, 2016, from CrunchBase, https://www.crunchbase.com/organization/justfabulous/investors

Glassdoor. (2016, April 14). JustFab reviews. Retrieved April 18, 2016, from Glasdoor, https://www.glassdoor.com/Reviews/JustFab-Reviews-E658219.htm

JustFab. (2010). How JustFab works. Retrieved April 17, 2016, from http://www.justfab.com/how-justfab-works.htm

JustFab. (2016, April 15). JustFab the Blog. Retrieved April 17, 2016, from The FAB life, http://blog.justfab.com/

JustFab Inc. (2015). JustFab Inc. Retrieved April 17, 2016, from FabKids, http://corp.justfab.com/?action=brands.fabkids

JustFab Inc. (2015). JustFab careers – job openings. Retrieved April 18, 2016, from JustFan Inc, http://corp.justfab.com/?action=careers.openings

JustFab Inc. (2015). JustFab cares – California transparency in supply chains act. Retrieved April 18, 2016, from JustFab Inc, http://corp.justfab.com/?action=social.transparency&copy=jf

JustFab Inc. (2015). ShoeDazzle. Retrieved April 17, 2016, from JustFab Inc, http://corp.justfab.com/?action=brands.shoedazzle

JustFab Inc. (2015). Fabletics. Retrieved April 17, 2016, from JustFab Inc, http://corp.justfab.com/?action=brands.fabletics

K, N. (2016, April 1). Behind the scenes: JustFab’s plus size capsule collection | JustFab the Blog. Retrieved April 18, 2016, from The FAB life, http://blog.justfab.com/2016/04/justfab-plus-size/

Lunden, I. (2013, May 23). JustFab goes up A size in Europe, acquires Fab shoes to take its fashion subscription service to France and Spain. Retrieved April 18, 2016, from http://techcrunch.com/2013/05/23/justfab-goes-up-a-size-in-europe-acquires-fab-shoes-to-take-its-fashion-subscription-service-to-france-and-spain/

Nelson, A. (2013, April 11). The Best Clothing Subscriptions for Women Retrieved from http://mybeautyboxreview.com/2013/04/11/womens-clothing-subscription-boxes/

PR Newswire (2011, July 29). JustFabulous Opens New Warehouse in Louisville, KY. PR Newswire. Retrieved from http://www.prnewswire.com/news-releases/justfabulous-opens-new-warehouse-in-louisville-ky-126395698.html

Pacificstand. (2014, May 6). Boom & bust: Inside the rapidly expanding world of subscription services — pacific standard. Retrieved April 17, 2016, from Pacific Standard, https://psmag.com/boom-bust-inside-the-rapidly-expanding-world-of-subscription-services-66d377c029f4#.gwxb0zaid

Roesler, P. (2014, November 24). Why free shipping is a must. Retrieved April 17, 2016, from Inc, http://www.inc.com/peter-roesler/why-free-shipping-is-a-must.html

SWOT OF JUSTFAB INC.

 

Strengths	Weaknesses
Product Selection Customer Service Price & Quality	Return & Exchanges Cancellation Policy of Monthly Subscription Legal Troubles
Opportunities	Threats
Acquisitions Expertise	Subscription Model International Competitors

What do you do well? What unique resources can you draw on? What do others see as your strengths?

STRENGTHS

Product Selection: JustFab carries a wide variety of products that its customers can choose from. Every month, fresh new styles are added to the website which includes shoes, jewelry, clothing and handbags. With this extensive selection, subscribers can view the company as a one stop shop for all their clothing needs. VIP members have the option of shopping the new collection before non-subscribers. The company also creates customized monthly showroom for paying members which is curated to the customer’s personal taste. In addition to the depth of selection, the company uses a standardized sizing chart for all its products which makes it easier for customers to shop with confidence. JustFab has also started producing wider shoes (in addition to regular shoe sizes) and recently announced the introduction of its plus size collection (K.N, 2016).

 

Customer Service: As one of its strong focus, JustFab offers free and fast shipping to its VIP members on every order about $39.95. VIP members also get exclusive sale opportunities where they can shop many of the products on sale. The company is aware that sometimes customers would not like to make a purchase so the company offers the option to “skip the month” so that subscribers do not get charged for that month. However, if the customer decides not to skip the month, the customer gets charged the monthly fee that is placed in the customers account as a store credit to be used later. The company also recently introduced a rewards program that incentivizes repeat customers. This point system is called My Fashion Fund and it is a three tier system starting with being a VIP member, then after the accumulation of 5,000 points the customer becomes an Elite VIP Member. The most prestigious level is the Diamond Elite VIP Member that requires an accumulation of 10,000 points which earns the customer a dedicated style concierge and invitation to exclusive events. Another huge investment that JustFab engages in is called the Fabshionista Circle where JustFab’s most dedicated shoppers apply to be a brand ambassador in exchange for store credit and invitation to annual events. These ambassadors act as community watchdog and represent the company in a good light without being a direct employee of JustFab (B.I, 2015 and JustFab, 2013).

 

Price & Quality: As a paying subscriber of JustFab, I love the affordability of the company’s products. So we combined the convenience of online shopping with the luxury of having a personal shopper. The company uses economies of scale in its reach to over 35 million customers to bargain for better deals from suppliers. According to the company’s website, it costs JustFab $20 for design and production. Customers pay $39.95 for the product with includes free shipping compared to pay about $80 to $100 at retail. To put this into context, recently I was on a search for a pair of lace up fringe sandals. I found a few online but they ranged from $60 to $120 and this was outside my price point. Two weeks later, JustFab released its monthly collection which included a same style in more color options for $39.95 (JustFab Inc., 2015 and JustFab, 2010).

 

What could you improve? Where do you have fewer resources than others? What are others likely to see as weaknesses?

WEAKNESSES

Returns & Exchanges: JustFab does a stellar job with how fast they ship products out to customers after the customer has placed the order. One of the major problems customers run into is when they want to exchange or return an item. Most items on sale from JustFab are ineligible for return and the only way to find out is to read the very small print sent in an email. Additionally, the package takes a long time to get back to the warehouse. Often times by the time a product for exchange gets to the warehouse and is processed, the exchange item may have sold out. With a return, processing also takes a long time and customer may need to follow up with customer service to track the progress of the return and refund. However, returns costs the customer a restocking fee of $5.95 and must be returned within 30 days of shipment (JustFab, 2010).

Cancellation Policy of Monthly Subscription: Compared to all the subscription services I have used, I believe JustFab offers the most difficult cancellation policy. In order for a customer to cancel their subscription, they have to call customer care. Customers have vented their frustration at how cumbersome the cancellation process is. Often times, customer representatives attempt to prevent the customer from unsubscribing by offering special discounts). Although those who benefit from the monthly subscription service love it, many new subscribers do not read the hidden print that tells the customer that they are signing up for a subscription service. So many customers get surprised when they look at the bank account or credit card statement only to realize that they have been charged monthly for a subscription that the did not even know that they had signed up for (Maheshwari, 2016, JustFab, 2010, and Pmocampo 2016).

Legal Troubles: As a result of customers’ frustration with JustFab’s monthly subscription model, the company settled a lawsuit for $1.8 million in Northern California in 2014. Just as a good viral review can make a business thousands of dollars overnight, angry customers have taken their anger with JustFab online resulting in over one thousand complaints. A simple internet search of JustFab pulls up a lot of the company’s negative reviews and Sitejabber, a company that ranks businesses, has listed JustFab with a 1.5 out of 5 based on 680 reviews. Only 16% of customers say they would recommend JustFab (Associated Press, 2014, Maheshwari, 2016, and GGl 2008).

 

What opportunities are open to you? What trends could you take advantage of? How can you turn your strengths into opportunities?

OPPORTUNITIES

Acquisition: JustFab reaches over 35 million members worldwide with its international presence in 6 countries namely US, Canada, Germany, United Kingdom, France and Spain through the acquisition of its portfolio branks (FabKids, ShoeDazzle and Fabletics. The subscription-based model is a tough model but JustFab has been able to stay ahead of industry even going on to acquire Fab Shoes to expand its global reach. JustFab has learned to only acquire companies that will complement its (JustFab, 2010, and Lunden 2013).

Expertise: JustFab has been able to successfully expand globally while other companies could not survive. The company is successful at tracking upcoming trends and capitalizing on its influence to quickly produce those styles to meet the needs of fast fashion mavens. JustFab’s Fabletics is one of the top clothing subscription services for women and offers one of the best monthly subscription and was one of the first clothing subscription services, which has equipped the company with the time and knowledge to hone in its skills in operations (Grant 2013 and Mulpeter 2014).

 

What threats could harm you? What is your competition doing? What threats do your weaknesses expose you to?
THREATS

Subscription Model: As can be seen from the success of JustFab, many other subscription services joined the competition. Some target plus size women and others like Stitch Fix focus on “busy women on the go” who care about fashion but are more interested in higher quality office staples. Customers now have a plethora of options to choose from which will make it more difficult for JustFab in the industry. With JustFab’s focus more on trend, the company may be losing out on customers that are more interested in comfort. On the price side, Rent The Runway has filled the market demand for luxury clothes rental giving consumers access to brand name products that they can wear and return (Stitch Fix, and Rent The Runway).

International Competitors: JustFab has since its inception focused on its price point as an attraction for new members. Over the years, other online retailers particularly in Asia have been targeting US customers. These foreign retailers offer significantly cheaper clothing without the commitment of subscription. Fast fashion is increasingly becoming popular as fashion enthusiasts love the thrill of getting pieces that they see on the runway quickly. Unlike many of JustFab’s international competitors that add new styles to their inventory weekly or even daily, JustFab adds new styles to its inventory during the first few days of the month. So foreign competitors may have more leverage in acquiring new customers over JustFab.

 

Reference

K, N. (2016, April 1). Behind the scenes: JustFab’s plus size capsule collection. Retrieved April 3, 2016, from The FAB life, http://blog.justfab.com/2016/04/justfab-plus-size/

Associated Press. (2014, October 25). Justfab settles lawsuit for $1.8 million. Retrieved April 10, 2016, from The Washington Times, http://www.washingtontimes.com/news/2014/oct/25/justfab-settles-lawsuit-for-18-million/

Batista, I. (2015, December 18). Behind JustFab’s Winter Wonderland party | JustFab the Blog. Retrieved April 10, 2016, from Behind The Scenes, http://blog.justfab.com/2015/12/behind-justfabs-winter-wonderland-party/

GGL Projects. (2008). Consumer reviews of online businesses. Retrieved April 10, 2016, from Sitejabber, http://www.sitejabber.com/

Grant, R. (2013, September 26). JustFab sews up $40M to become a global fast-fashion empire. Retrieved April 10, 2016, from Venturebeat, http://venturebeat.com/2013/09/26/justfab-sews-up-40m-to-become-global-fast-fashion-empire/

JustFab. (2010). JustFab. Retrieved April 10, 2016, from http://www.justfab.com/story.htm

JustFab. (2010). JustFab frequently asked questions. Retrieved April 10, 2016, from http://www.justfab.com/faq.htm

JustFab. (2013). JustFab brand ambassador program. Retrieved April 10, 2016, from JustFab Fabshionista Circle, http://ambassadors.readypulse.com/ambassador_portals/15

JustFab Inc. (2015). About Us. Retrieved April 10, 2016, from JustFab Inc, http://corp.justfab.com/?action=about

Lunden, I. (2013, May 23). JustFab goes up A size in Europe, acquires Fab shoes to take its fashion subscription service to France and Spain. Retrieved April 10, 2016, from Techcrunch, http://techcrunch.com/2013/05/23/justfab-goes-up-a-size-in-europe-acquires-fab-shoes-to-take-its-fashion-subscription-service-to-france-and-spain/

Maheshwari, S. (2016). Tons of people have gotten screwed over by Kate Hudson’s company Fabletics. Retrieved April 10, 2016, from Business, http://www.buzzfeed.com/sapna/tons-of-people-have-gotten-screwed-over-by-kate-hudsons-athl#.aa824yKOk

Makino. (2016). Metal Technologies Inc. embraces flexible manufacturing systems for automation. Retrieved April 8, 2016, from Competitive Production, https://www.competitiveproduction.com/articles/flexible-manufacturing-system/

Mulpeter, K. (2014, October 8). 5 subscription clothing programs (with personal Stylists!) that will save you money Retrieved from http://dailysavings.allyou.com/2014/10/08/subscription-clothing-programs/

Noria Corporation. Mazda capitalizes on flexible manufacturing capabilities. Retrieved April 8, 2016, from http://www.reliableplant.com/Read/7750/mazda

Pmocampo. (2016, February 7). JustFab – not so Fab cancellation process! • /r/femalefashionadvice. Retrieved April 10, 2016, from Reddit, https://www.reddit.com/r/femalefashionadvice/comments/44mnwr/justfab_not_so_fab_cancellation_process/

Rent The Runway. Rent the runway FAQ. Retrieved April 10, 2016, from Rent The Runway, https://m.renttherunway.com/pages/about

Stitch Fix FAQ. Retrieved April 10, 2016, from Stitch Fix, https://support.stitchfix.com/hc/en-us/articles/204222994-FAQ

 

The Dream Continues: LPV Blooms

Original Organizational Chart

SCENARIO 1: LPV ADDS A NEW PRODUCT OR SERVICE LINE

At this point, La Passion Voûtée (LPV) has been in business for almost two years. Customers love the services that the company provides which include closet organization, special occasions, travel styling, and photo shoot. Questions start pouring in asking us where and how I, the Head Style Consultant obtains my custom-made African attire that I showcase on the blog once a week. Traditionally, LPV had linked to similar traditional African pieces from other retailers where LPV gets a commission for any sales made through these websites. Customers want access to exactly what I am wearing in my posts.

After many hours of contemplating the venture, we decide to start an online store providing pre-made African pieces as seen on me. We receive a high order rate and our small team has a hard time meeting demand. With the addition of this new product to our portfolio comes the need to expand our team to accommodate this change. So, LPV decides to add a clothing line/manufacturing department to take care of those needs. With this new addition, our organizational chart will look like this:

 

SCENARIO 2: LPV GOES INTERNATIONAL

Our pre-made clothing grows so big and orders are coming in from all over the world. In essence, LPV becomes a household name and the most sort after African traditional clothing. We go back to the drawing board to ascertain what changes are needed in order to keep up with needs of our customers. We decide to take a big leap and open our first brick and mortar shop in London while maintaining our online presence and expanding shipping to many more countries. With this expansion, LPV’s organizational structure will look like this:

The new structure will have a general manager that everyone on the production side reports to. Both the general manager and the website manager will report to me.

SCENARIO 3: LPV BOUGHT AND MERGED WITH ANOTHER ORGANIZATION

We get approached by Boriah Inc., a leather goods company that provides high-end, luxury products to its customers. The company executives see this potential merger as a huge advantage. For Boriah Inc., the organization will be able to carter to a new segment of individuals by the introduction of affordable leather goods within the price range of LPV’s customer segment. The benefit for LPV is to offer higher priced African pieces to meet the social status of Boriah’s customer base. This merger will increase profits significantly. We think long and hard about this proposal. In the end, we decide to come on board. The organizational structure will look like this:

With a more diverse portfolio, we need a dedicated human resources department and one marketing manager to coordinate the new business’s marketing activities.

 

 

 

Effectiveness vs. Efficiency: JustFab Inc.

JustFab / Via justfab.com

• What does the organization do? What is its major work activity?

According to the company’s website, JustFab Inc. (previously Just Fabulous) is:

“a personalized shopping experience that gives you access to professional stylists and their hottest picks. Every woman deserves to have the season’s latest trends and style expert advice regardless of her location, schedule or budget. So we combined the convenience of online shopping with the luxury of having a personal shopper (JustFab.2010).”

JustFab is a subscription-based online clothing retailer that provides a one-stop shop for women in shoes, clothing, handbags, and jewelry. The company has come under criticism because of the structure of its business model. The majority of JustFab’s products cost $39.95 but in order for an individual to buy an item for this price, he/she has to sign up for JustFab’s VIP program or pay about 10% higher to get the item. Many of the complaints about JustFab say that the company fails to adequately disclose to new members that the discount they are signing up for leads to recurring monthly charges of $39.95 if the subscriber forgets to sign into the company’s website to skip charges for that month. Despite all of these issues, the company is on track to bringing in $675 million in sales up from $504 million last year (Maheshwari, 2016).

• Based on your research, how does the organization score on efficiency? 

1               2              3              4              5

According to an article by The Wall Street Journal, JustFab relies on information from customer buying patterns as well as interests to give the company a competitive advantage over other firms in the same industry (Page, 2015). Efficiency focuses on how well the company manages its input, resources, and costs. Conversely, another article reveals some consumer-oriented companies including JustFab are valued at less than four times of the private capital they have raised (Lee, 2015). As of the end of 2014, JustFab had raised $249 million at a valuation of $1 billion (One Million by One Million Blog, 2015). This information shows that JustFab though gaining customer insight may not be adequately managing its resources (i.e. funding) properly or that investors are not willing it give the company.

On the production side of the company, JustFab does a very good job analyzing the market and determining which new products to make available to customers each month. As a fashion blogger, I stay abreast with information pertaining to fashion trends. In January, I began to notice bloggers and fashion mavens embracing the fringe clothes trend. The following month, JustFab added a few fringe products to its catalog including a lovely lace-up fringe sandals which sold out in various sizes within the first week. Taking into account both of the areas, JustFab scores a 3 on efficiency.

• Based on your research, how does the org score on effectiveness? 

1               2              3              4              5

Effectiveness focuses on outputs, products or services, and revenues on the organization. JustFab started out as a shoe subscription service but as the company’s reach grew, customers desired more products so the company expanded its product line to include handbags, jewelry, clothing and just recently, plus sizes (K.N, 2016). The company has definitely perfected the act of catering to the needs of their customers.  Although the company advertises its products as $39.95, some items cost more even with VIP membership. Nonetheless, this has not deterred many loyal customers.

Source: JustFab/ via JustFab.com

Even with these price increases, the company continues to grow in size and revenue. According to Ocean Media, JustFab has over 35 million members worldwide and a revenue of $675 million in sales for 2016 (Ocean Media 2014 and Maheshwari, 2016). With all these factors, JustFab is doing great with a score of 4. Many other similar subscription services have gone out of business because of competitiveness of the fast fashion market.

• Where would the organization like to be in the graph?

JustFab falls into the C quadrant because the company excels at providing fast fashion to its trendy customers. Majority of its success dwells on JustFab being able to provide a duplicate of high-end clothing for a fraction of the price, typically less than $40 a month. The company also provides fast free shipping to customers in the US with an order total of $39.95 making them a desirable online retailer. This strategy encourages customers to buy more in order to qualify for free shipping. A 2014 study by comScore showed that 58% of online shoppers are willing to add more products to their shopping cart in order to qualify for free shipping (conScore 2014). The company focuses most of its effort on the output/products it can deliver to online shoppers.

• Does the current positioning of the organization correspond to its vision and mission statements?

The Mission statement taken from JustFab’s website says that: “We aim to give our members the celebrity treatment through a fun and engaging personalized shopping experience offering an extensive collection of on-trend shoes, handbags, denim, and accessories.” (JustFab 2013)

As a frequent buyer from JustFab, I believe the company does provide on-trend clothing at a terrific price. When it comes to product exchanges, the company does a terrible job processing refunds and exchanges. It took almost a month for my return to be processed and store credit issued back to me and that only happened after numerous emails to their customer service. I am certain that most celebrities do not go through this kind of treatment.

Although the company did not have a vision, their bottom line goal is: “To give our customers the fashion they crave, at a value they can’t resist.” JustFab has managed to keep its head above water while other subscription-based companies suffered or went out of business. With a one-year membership retention rate of 60%, it is evident that customers love the value of product they are getting for their money (Maheshwari, 2016). I became a customer of JustFab because they offer unique products that I could not find elsewhere or offered similar products at a cheaper price. As a fashion blogger on a college student budget, I “crave” trendy pieces ant affordable prices and JustFab helps me achieve this without breaking my budget.

REFERENCES

1. Billion dollar unicorns: JustFab getting ready for an IPO. (2015, March 26). Retrieved April 3, 2016, from One Million by One Million Blog, http://www.sramanamitra.com/2015/03/26/billion-dollar-unicorns-justfab-getting-ready-for-an-ipo/
2. JustFab. (2010). JustFab frequently asked questions. Retrieved April 3, 2016, from http://www.justfab.com/faq.htm
3. JustFab. (2013). JustFab cares – Mission Statement. Retrieved April 3, 2016, from JustFab Cares, http://www.justfab.org/
4. JustFab Growing Aggressively. (2014, May 20). Retrieved April 3, 2016, from Ocean Media, http://www.oceanmediainc.com/#!news/justfab-growing-aggressively
5. K, N. (2016, April 1). Behind the scenes: JustFab’s plus size capsule collection. Retrieved April 3, 2016, from The FAB life, http://blog.justfab.com/2016/04/justfab-plus-size/
6. Lee, A. (2015, July 18). Welcome to the Unicorn club, 2015: Learning from Billion-Dollar companies. Retrieved April 3, 2016, from http://techcrunch.com/2015/07/18/welcome-to-the-unicorn-club-2015-learning-from-billion-dollar-companies/
7. Maheshwari, S. (2016, January 16). Fabletics and JustFab keep growing in face of criticism. Retrieved April 3, 2016, from Buzzfeed, http://www.buzzfeed.com/sapna/justfab-fabletics-target-675-million-in-sales-this-year#.ccD95WL0o
8. Page, P. (2015, July 2). Today’s top supply chain and logistics news from WSJ. The Wall Street Journal. Retrieved from http://www.wsj.com/articles/todays-top-supply-chain-and-logistics-news-from-wsj-1435834202
9. comScore. (2014, June 11). Study: Consumers demand more flexibility when shopping online. Retrieved April 3, 2016, from https://www.comscore.com/Insights/Press-Releases/2014/6/Study-Consumers-Demand-More-Flexibility-When-Shopping-Online

 

Fun Fact: In November, 2015 I won a fashion competition sponsored by JustFab  which included a roundtrip airfare for two to Paris, three night stay at a 4-star hotel, $1500 in cash and a suitcase full of JustFab clothes.

 

 

 

My Dream Job as a Fashion Consultant

For a while now, I have been thinking a lot about starting a fashion consultancy company. I love fashion and I constantly find myself getting daily digest from fashion bloggers and consultants. The name of the company will be La Passion Voûtée (LPV) Fashion Consultancy. LPV will provide fashion (wardrobe and style) consultation to clients to meet their needs. Services will include closet organization, special occasions, travel styling, and photo shoot. Operative goals that the company will focus on are: performance goals, market goals, productive goals, innovation goals, and employee development goals.

MARKET GOALS

With the awareness that the fashion industry is a tough market to penetrate, LPV will strive to penetrate the market through advertisement in major local magazines. Since the company will be providing services to clients locally, marketing efforts will be focused on reaching those individuals. With my experience as I fashion blogger, I will grow our online presence with emphasis on our fashion consultancy expertise.

Currently, La Passion Voûtée fashion blog has active presence on Facebook, Instagram, Pinterest and Google Plus.La Passion Voûtée’s social media goals include gaining new followers on these social media network through participation in giveaways, which have proven to grow followers rapidly. The cost for one Instagram loop giveaway is $40 and it generates an average of 750 followers. LPV has also grown its Facebook Page followers by 800 with a $10 advertisement budget. In order to reach more local clients, Facebook advertisement will be narrowed to target these clients. We will also integrate a newsletter subscription into our website that will collect location information of subscribers. Our monthly advertisement budget will be set at $100 ($30 Facebook, $40 Instagram, $30 Pinterest). Once a month, we will offer free style consultation in exchange for followingLa Passion Voûtée’s social media accounts.

PERFORMANCE GOALS

Our performance goal will be focused on volume in terms of the number of clients we provide our services to every month. In the initial few months of business we may not be profitable so tracking profit may not be the best method for our business. We will track referral sources of our clients so that we can adjust our marketing goals accordingly. If we can start by providing our services to 10 paying clients per month, our performance goal will to to grow by at least 10%. This will make the following month’s goal to be 11. If we meet and exceed this expectation, LPV could further increase its performance goals. During high purchase periods such as Black Friday and holiday festivities (particularly in the month of December), we will have more aggressive performance goal and vice versa for slower months. By using this approach, our performance goals from month to month will be very attainable.

PRODUCTIVE GOALS

As a very small company with very few staff, we need each other to ensure that our goals are met monthly. In order to track employee contribution, LPV will track how many clients (amount paid by client) and commission earned from activities per employee. Tracking both metrics will allow us know which employees bring clients into the business and which ones bring sales to us. This will be achieved by looking at records to see which employee served each client.

INNOVATION GOALS

The fashion world is constantly changing. Styles that are in season quickly become old-fashioned in less than a year. So a key metric for LPV is for our employees to create innovative ways that allows us serve our clients better as well as ideas that will allow LPV get ahead of its peers. Employees will research trends that are popularly in other European countries (for example the most talked about styles during Paris and London Fashion Weeks) to help us forecast the possibility of those trends being big in the US. Other innovative ways could expand into the online world where we would provide virtual consultation with clients not in our local vicinity.

EMPLOYEE DEVELOPMENT GOALS

As LPV grows, employees will be given additional development courses. It could include how to track new and upcoming trends so that LPV can capitalize on it from commissions, and participation in Fashion Week. Training will also branch into the online scene as well to include tactics to increase LPV’s online presence and revenue. With additional training, we will ensure that all employees are competent in their roles and responsibilities.

ORGANIZATIONAL STRUCTURE

 

The organizational structure of LPV will start with me as the Editor-in-Chief where I will oversea everyone. In this role, I will ensure that our marketing goals (social media, advertising, etc) are achieved in a timely manner. The assistant editor will be responsible for the day to day operations of activities happening on our social media platforms in addition to creating content for our website and social media accounts. The assistant editor will be assisted by two social media experts. On the physical consulting aspects, I will have a manager who will coordinate the day to day operations of business in the office including ensuring that the needs of clients that come into our office are met. In addition, LPV will also have two style consultants who will focus their efforts on bringing us clients needing styling services. These style consultants will also coach clients and assist them with shopping for clothes. They will, in essence be, our field agent.