Reaching 1 million members faster than Facebook, Twitter, and Groupon, is the hottest new site to purchase, browse, and share new designer items online. Anything from trendy art pieces, funky kitchen gadgets, vintage furniture, or gourmet food, Fab has everything you may desire for any budget. The site helps new, undercover designers connect their work to prospective customers through a simple, user friendly web design and mobile application. Linking with other social media platforms such as Facebook and Pinterest, users can gain inspiration and see what items are trending on the site at that time. All products are sold at a discount from their retail value and the sales last from 3 to 30 days.  Designers can easily request to have a collection featured on the site and their products are now sold in over 20 different countries worldwide.

Fab’s mission is to help people better their lives with colour and creativity through great design. Check out this video and see for yourself!

Fab's Story in the making

Fab strives to provide a user friendly and creative website/ phone application while selling the best designed products. “We want you to literally LOVE your every interaction with Fab.”[1] The creators work to achieve this goal by selling products online in a flash sale like manner. Each day, new items from kitchenware, art, clothing, and gadgets are sold online at a discounted price from its original retail value. This picture below gives you a general idea of how the site looks. Notice how it mentions that the "sale ends in 2 days and 23 hours."

The site is visually appealing and easy to navigate. Their products vary across all price ranges, in turn, attracting a wide array of customers. Most of their members are from the US but increasingly so from Europe and India. After being founded in 2010 by Jason Goldberg and Bradford Shellhammer (shown below), the site was originally designed as a social network. In 2011 they changed the operating strategy to its current business model. After the re-structure, the number of members increased from 175,000 to over 7.5 million, across 20 different countries.

As of last year, Fab has sold over 4.3 million products, which is an average of 5.4 products per minute[2]. The company’s head office is in Manhattan and has other offices in Pune, India and Berlin, Germany. The founders were lucky to attain funding from various companies and investors throughout 2011 and 2012, surpassing $150 million in total investments[2].

The founders wanted to help consumers find daily inspiration and connect them to undiscovered designers. To ensure they had a significant amount of demand for their service, they created a marketing strategy and attracted members before the actual launch of the site, which helped them turn a profit within the first 30 days. To support its goal, the site features an “inspiration wall” where people can share photos and ideas of designs they would want to buy. The more a member buys and shares their purchases with their friends, the more “Fab credit” they receive to put towards other products.

Fab strives to offer authentic designs with great stories behind them to make people smile. The three images below showcase how the site incorporates the designers' story and inspiration into its sales with the product descriptions.

Hipster and On-line Consumer Generation

Discussed below are various external trends and market factors in which Fab accommodates.

An obvious external market trend Fab utilizes is online shopping. In North America alone, 83% of the population has purchased an item online and in 2010, Americans spent $186 Billion through online transactions[3]. The more referrals and purchases members make, the more Fab credit they accumulate to use towards future items, incentivizing members to spend more on the site.  

Throughout younger generations, a large trend affecting purchasing habits is the hipster revolution and anti-mainstream attitude. The newest and coolest brands are those less notably popular, grungy, or simply unique. This is what Fab centers itself around. It sells products from smaller, upcoming designers that do not necessarily have the means to open their own stores. It helps connect these designers to customers who are seeking new ideas and designs that their friends will have never heard of, becoming the next new trend. Check out these photos which styles connect to Fab's products, along with other unique inspirations.  

Another external market factor that works in Fabs favour is how consumers have become increasingly skeptical towards product advertisements and messages. Consumers are not always trusting towards traditional marketing advertising and conduct a lot of their own product research before making any purchase commitments. With access to hundreds of online reviews, it is easy for them to conduct their own pre-purchase analysis. Fab is in a good position regarding this trend since the site allows shoppers to browse at their own discretion and has the retail and sale price listed clearly on all of their products. Each piece has a little description about the designer and inspiration which makes the shopper feel its authentic reality.

A driver in sales for products such as clothing, art, and gadgets, is peer recognition and the intense desire to fit in. Since Fab’s site is interactive with other social media tools, customers can post and see what their friends have been purchasing. Each item is flagged when it is sold out or there are only a few items left, appearing more desirable. The live feed board also features items which other customers have “faved” or recently purchased, making customers more enthusiastic about making a particular purchase due to the social appreciation and acceptance.

Users can easily browse products by categories, moods, or themes.

Cross Intergration and Marketing Mix Synergies

Like most other social media sites, Fab offers the option to link other platforms such as Facebook and Twitter to your account. The major difference between Fab and its competitors is that it offers members free credits when tying together all of these accounts. It owes part of its fast success to social media, since it allowed others to discover the site through their friends[4]. This kind of marketing for both Fab and the products being displayed has been crucial in building its online community.

The setup of the website is an essential part of what makes Fab so special. Once someone clicks through one of the temporary flash sales, they are instantly drawn into further exploring the site. The constant clicking and exploring of members is what Fab is based on, since it provides great insight on not only what its members are purchasing but what they are viewing and sharing [4]. CEO, Jason Goldberg mentioned that, “more than 50% of Fab members have joined via social channels, and this volume of membership enables us to understand what is likely to resonate with the entire Fab community.” This is one aspect that makes Fab so unique, not only are they integrated with other social media sites, but this connection strengthens its online community.

Facebook’s Timeline is proving to be another fantastic tool for brand marketing at Fab. A little box on someone’s Timeline displays the items that they have “liked” and keeps a record of all their purchasing activity. This allows people that aren’t even members of Fab to take part in what the site has to offer by seeing this on their friend’s pages which encourages them to explore themselves. The primary concern when someone signs up isn’t if they purchase something right away, but what value they will bring Fab’s business overtime. There are a number of ways that this value can be created, including the amount of people they invite, total purchases over time, and what they view. At the end of the day, it is important that current Fab members are sharing their activity with their friends in order to ensure that the viral loop continues.

Not only is social media important for Fab itself, but is extremely helpful for the companies and designers that display their products on the site. By having a large reach through social media; it helps people discover designer’s products without them purposely seeking it out. Another way those members can help generate product awareness is by “pinning” their favorite products to their Pinterest account. Fab’s linkage and synergies with other social media sites, gives these unique products easy exposure by using its members to be the advertisers.

Designer Risk and Barriers to Fab

Although Fab is a great way to promote your brand and create awareness, there are a few disadvantages of participating in daily deal sites. Even though companies are exposed to new customers through Fab’s existing audience, there is a chance that customers won’t continue to buy a company’s products on an ongoing basis [5].  As consumers continue to purchase products with elastic demand at a discount, they become accustomed to deals and refuse to buy similar products in the future until they are on sale. This can pose a risk to designers using the site, because although it generates brand awareness, customers will not necessarily then purchase other products from their own websites or stores and remain as one-time customers.

Another risk is highlighted from a study conducted by Cornell University, which found that companies participating on daily deal sites can lead to an increase of negative online reviews [5]. It showed that ratings from reviewers were 10% lower on average, that typical reviews from regular customers. It is important for companies to realize this risk when considering putting their products on Fab and should weigh the benefits versus potential threats of being on a daily deal site. At the end of the day, it is important to evaluate what you think your brand’s ability will be to turn these one-time purchasers into repeat customers. If you think there is a high opportunity, then the small investment may be worth the uncertain return.

Example for Magazine Publishers to Utilize Fab

Over the past few years there has been hope that the iPad will help turnaround the publishing industry’s declining sales and subscription rates for magazines[6]. Although newsstand sales continue to drop, daily-deal sites including Fab are seen as helpful resources to increase the number of print-subscribers. Compared to some of its competitors, Fab has been a very big supporter of different magazines. For two weeks in 2012, Fab created a pop-up shop called “Our Favorite Magazines” which sold 20,000 discounted subscriptions of print media. As well, Fab has about 2 million email subscribers and typical users are in their early 40s, not college students, which other daily-deal sites target. This specific group is more likely to purchase a print subscription than a 20 year old would [6].

This presents a great opportunity for a magazine company to utilize Fab’s services. For example, Indie Magazine, a quarterly publication centered on independent style, fashion, and music, is popular in Germany and Austria but also sells subscriptions worldwide. The magazine attracts a niche market and would not be sold on regular newsstands or in drugstores. Since they are more independent and do not already have cheap subscription sales on websites like Amazon, as many larger competing magazines do, potential subscribers would be much more inclined to purchase it on Fab.

The company could offer a one and two year discount at 15% and 25% off, respectively. The deal could be featured for 30 days to ensure that customers, who may not check the site regularly, have time to purchase the offer. They could incentivize current readers and brand endorsers to go onto Fab and “fave” the magazine and share it with their friends on other social media platforms. After sharing the offer, these readers would be entered into a draw to win a three year subscription. This buildup of attention on Fab will help the offer appear on random member’s inspiration walls and popular item lists. Once the new magazine readers started to appreciate the product and look forward to their next issue’s arrival, they would be more inclined to re-subscribe to the magazine in the future thanks to

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