This athletic apparel company thinks it will get the subscription model right

Don't call Fitbox a subscription service. 

"Let's call it a membership," CEO Gregory Lowe II said to Business Insider.

The semantics are crucial to what Lowe wants Fitbox - an up-and-coming athleisure company - to be. 

At its core, Fitbox starkly resembles Fabletics, Kate Hudson's athleisure company that found itself at the apex of a scandal this past fall. Fitbox an athleisure company that operates around memberships. But despite the obvious similarity on the surface, it's not exactly out to get Fabletics.

"I wouldn't say that I'm out to get Fabletics," Lowe said. "I think the media can take that and throw it around. I think Fabletics is one of the larger companies in the space right now that's doing very well and I think since we're in the athleisure space they kinda compare us. We are out to get some market value and ... take some market value from Fabletics, I would say. But I don't say we're out to kill them. They're totally different from us." 

"The quality of their clothing is totally different," he said. "The way they build their customers is totally different. They're not really building a lifestyle around their brand. They're a clothing company ... we're a lifestyle brand offering great clothing."

The lifestyle element comes from the app, which, when it launches on January 28, will feature editorial content, videos, and music, in addition to clothing. The clothing is cheaper than that of Lululemon or Nike, which is part of Lowe's mission: to bring affordable athletic apparel to the masses. 

But the product is the membership and the eponymous "Fitbox."

Prices start at $59.99 for a box consisting of a top and a bottom. Members can purchase a one month, three month, or six month membership. Consumers select a color, but there's an element of surprise to the membership - they don't quite know what will be in the box each month. Members with multiple month memberships can "shop or skip" by the fifth of the month - a tactic that lingerie startup Adore Me uses. Fitbox members can skip up to two times.

But that "shop or skip" tactic is in part what has landed Adore Me in hot water with many of its shoppers. And subscription-based retail often receives criticism. Fabletics and Adore Me have both been accused of being "scams," and each have awful reviews with the Better Business Bureau (Adore Me has fewer complaints, but it has an F rating). So how will Fitbox get it right? 

Two things in particular separate Fitbox from other membership-based retail companies: there are no automatic payments. Additionally, members can cancel through the app or online. (Not having the ability to cancel online was one of Fabletics' customers core complaints, according to a Buzzfeed report this past fall.) 

Lowe said that the biggest problem with subscription-based retail companies is that retailers generally focus on making a profit rather than making customers happy.

"I think the biggest flaw is that they don't look at the customer," Lowe said to Business Insider. "They're looking at how they can maximize revenue ... it's a business plan. And that's okay for those companies, but I don't think they're focusing in on how their customer feels. When their customers [are] getting charged, you don't know what that person has planned for that month, and you're just taking money [out of the customer's] account, and it makes the customer upset, it makes them upset about your brand ... they don't really have a good feeling about what your brand is doing to them ... we want to make sure our customers, our users, they feel like they're part of a membership."

There are perks, he said, to operating on a membership basis, as opposed to a traditional direct-to-consumer retailer, such as knowing what needs to be produced each month and getting a better sense of who the customer is. "We can dive into what our customer wants a little bit more," he said. "We can get to know our customer on a personal level because they're with us month after month after month." The app, he said, will have a 'like' button, similar to Instagram.

He admitted that there are some caveats to operating on membership basis; for instance, some people do not stay more than one month, and they sign up just for the initial discount and then quit.

Will Fitbox make it?  The athleisure market is crowded. But Lowe believes there's enough space for Fitbox, too.

"I think there's enough space for companies coming in because there are so many people that are getting into it," he said. "We live in New York City so things are more on the front edge, bu as the rest of the United States and the world starts to jump into it, the market gets larger and larger and larger ... so I definitely think there's space for people to grow in it."