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