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