Beyond the box:

How FabFitFun uses AI & personalization to elevate the subscriber experience

FabFitFun has innovatively embraced AI and personalization, committed to transforming the subscriber experience beyond the traditional subscription model. Their continuing investments in custom technology, data-driven business strategy, and intrinsic focus on user experience are critical for driving future success.

Hear from Michael Bourkhim, Co-founder and co-CEO of FabFitFun, as he discusses the company’s unique approach.

What is FabFitFun?

FabFitFun is a shopping club online, best known for its subscription boxes of curated products in beauty, fashion, fitness, and wellness. Each season, over a million members receive fully customizable boxes. “We just made a recent announcement and expanded that to both our annual members and our seasonal members. It's almost like getting a surprise prefix menu of amazing options and, off that menu, you can choose awesome products for yourself,” says Broukhim.

What is the origin story of FabFitFun, and why did you choose the subscriptions?

FabFitFun started as a media project complete with a lifestyle and wellness newsletter (including The Zoe Report with Rachel Zoe) and became today’s iconic, curated subscription box in 2013. “We saw these trends happening where these early pioneers in the subscription space were doing essentially beauty samples, like Birchbox or Ipsy. Going to these events, the magic of getting this box of surprises and delights of, not just samples, but almost like a care package that you'd get if you're at camp but for an adult,” says Broukhim. 

Over a decade later, FabFitFun has expanded into a full-fledged shopping club, distinguishing itself in retail by introducing new products and brands to consumers at the beginning of the product lifecycle. Broukhim shares the brand can do this because its membership relationship underpinned by a subscription relationship offers “strong demand signals and data signals to go to brands and help them think about what might work to get in front of this audience.” 

When developing a highly engaged subscriber base, what key insights or lessons learned can you share?

At the heart of FabFitFun's philosophy lies a customer-obsessed culture with customer retention as the paramount metric. From its inception, FabFitFun prioritized customer satisfaction, sometimes making short-term economically irrational decisions, such as sending replacement products or doubling benefits for mistakes, to build trust and foster a happy customer base. 

As the company scaled, it started to harness data similar to Netflix, analyzing subscriber behaviors and feedback to enhance product curation and the overall customer experience. According to Broukhim, “Netflix has tons of insights they've generated about your viewing habits–what other things you've clicked on, how long you watch different things for–and they use that to inform their curating decisions a year from now. And similarly, we're doing this in the world of consumer products.” 

What are key strategies to differentiate and stay ahead of the curve and the competition?

 FabFitFun has created a business model that is highly difficult to replicate, focusing on personalization and customization for its members. This approach, akin to letting Netflix users choose their content, presents unique challenges with physical products. 

Simple surprise product selections were insufficient when transitioning from a subscriber base of 1,000 to over a million. “We couldn't satisfy them just by surprise or by just trying to find the same products that a million people are gonna love, so customization was kind of the obvious route for us,” says Broukhim. 

Recognizing this, FabFitFun shifted away from relying on third-party logistics and developed its in-house warehousing and distribution capabilities. This evolution led to the creation of a kitting factory capable of producing millions of potential box variations each season. Broukhim sees this move towards a fully customizable subscription box experience—a first in the industry—as a major competitive advantage. 

“No one else in the subscription box landscape has this kind of fully customizable experience. I think it's important to look at those early intuitions and say, ‘How can I double down?’ We've made a big bet on personalization and customization,” shares Broukhim.

When you think about technology, where do you choose to partner versus build on your own?

FabFitFun distinguishes itself in the ecommerce landscape through its unique positioning as a retail rather than a consumer brand, akin more to Target with its focus on curation rather than Nike. 

The company's success hinges on its ability to manage thousands of SKUs and offer a highly customized shopping experience, challenges that popular platforms like Shopify aren’t equipped to handle. To support its distinct subscription business model, FabFitFun developed a custom tech stack. Broukhim shares that “initially, our stack was Recurly plus some PHPs, HTML, CSS, and nothing else. Over the last decade, we’ve expanded on that, leveraging a lot of the capabilities that are inherent in Recurly.”

This blend of technology allows FabFitFun to own the end-to-end customer experience, offering a level of personalization and customization in the members' shopping club that sets it apart from conventional ecommerce platforms. “Obviously, there are areas where we don't need to build. [Recurly has] an amazing subscription platform that helps us with a ton of the stack. We're happy customers of a lot of tooling out there that’s not gonna be our edge,” says Broukhim.”

What are your thoughts, experiments, or ideas on applications for AI in subscriptions?

The rapid advancement of AI technology is transforming various sectors, particularly in enhancing efficiency and customer experience. Incorporating AI-driven methods, such as chatbot automation and AI co-pilots for customer service, is achieving efficiency gains and significantly improving customer interactions by providing accurate, context-aware responses. 

Beyond customer service, AI's potential is being explored in creative and legal domains, promising substantial increases in productivity and the quality of outcomes and creating more affordability. “We're experimenting on the marketing and creative stack. There's a bunch of AI solutions in terms of generating content and refining images,” says Broukhim. 

Furthermore, Bourkhim shares that FabFitFun is “using the loop behind customer inquiries, social chatter, and chatter in our community forums to help us spot issues very effectively and start categorizing and tagging those using AI,” helping the company prioritize customer-driven goals. This suggests a shift towards predictive and personalized subscriber experiences, indicating AI's role in shaping future subscription business strategies and operations.

Can you share what the FabFitFun acquisitions mean for the future of the business? 

FabFitFun's recent acquisition of PupBox caters to its members’ significant interest in pet-related items, indicating a broader vision of FabFitFun as a subscription service and a comprehensive ecosystem and platform for consumer engagement. 

The company is also evolving into a hub for launching and nurturing brands through partnerships and joint ventures, evidenced by its collaboration with emerging companies like Our Place and Unhide. “We think about the long-run vision for the company… to both own and operate and help launch in partnership in joint ventures, with other operators–a constellation of brands,” says Broukhim.

Through leveraging its capabilities in consumer insights, supply chain, and marketing, FabFitFun aims to cultivate an innovative retail landscape, where it invests in, acquires, and collaborates with brands to offer unique products directly to its substantial and engaged subscriber network.

“We want to be able to tell the story of products and brands in the most compelling ways, so we have just a lot of different ways to partner depending on the scale you're at or the point in your lifecycle you're at,” shares Broukhim.

Learn more about FabFitFun’s journey with Recurly

Dive into how Recurly and FabFitFun worked together on a bespoke solution to create a custom retry model that repairs failed transactions, improves subscriber retention, and increases monthly revenue. 

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