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Four factors behind the success of Stitch Fix – Econsultancy

Stitch Fix is an online personal styling service that sends a curated selection of clothing and accessories to customers, using a mix of machine learning and human selection.

Since it was first founded back in 2011, Stitch Fix has gone on to generate huge success. The company posted seven consecutive quarters of more than 20% growth in revenue since 2017 (which was the year it became a public company). It also saw sales in Q3 2019 grow 29% to reach $408.9 million.

So, what has contributed to its rise, and what does this tell us about fashion ecommerce? Here are a few lessons we can learn from it.

Backed by data science (and human stylists)

Personal styling is usually an in-person experience, delivered by retail stores or specialised styling services. Stitch Fix aims to bring personal styling to the masses, using data and machine learning to deliver personalisation at scale.

As well as a lengthy questionnaire when customers sign up – taking into consideration factors like lifestyle, body type, and most-wanted items – Stitch Fix’s ‘Style Shuffle’ feature on its app and website allows it to amass huge amounts of data. It acts as a sort of ‘Tinder for clothing’, allowing users to swipe right on outfits they like, or left on those they don’t.

This data feeds into Stitch Fix’s algorithm, helping it to better understand the preferences of customers, based on different factors like age or location.

While data science is crucial to Stitch Fix’s business model – the company employs a chief algorithms officer to oversee the data science team – it does not disregard the importance of human judgement. In fact, as HBR reports, the company’s human stylists always have the option to override or change the algorithm’s selection, and can often better understand the client’s needs (particularly when it comes to life events or special occasions).

Combined, these factors allow Stitch Fix to deliver a service based on data -but which somehow feels innately personal.

Stitch Fix is a good example of how an online brand can make the most of data, using it to continuously improve the online customer experience (as well as overall logistics). It helps that personalisation is the brand’s USP, of course, meaning that customers are more than willing to offer up their personal information, as well as feedback and reviews on products, in order to receive a service that is unique to them.

Other brands, regardless of their business model, should take heed of this clear value exchange and ensure there is transparency in how data is sourced and used, as well as around what customers are getting in return.

Turning data into action

For the brands that partner with Stitch Fix, there are significant benefits, mostly stemming from the data that the company collects. Each brand has its own ‘vendor portal’ which enables them to access feedback on how products sold through the service are being received.

According to Stitch Fix, 80% of customers leave feedback on returned items, which is testament to the level of investment that they have in the service.

For brands, this experience is different to the process of selling in physical department stores, where they are typically left in the dark about why a product doesn’t sell. With the data generated from Stitch Fix, brands are able to improve and evolve their products, based on invaluable and specific feedback about fit, sizing, and design. According to Fast Company, fashion brand Threads 4 Thought made changes to the size of a button on a particular shirt (based on feedback), eventually resulting in an increase in sales through Stitch Fix as well as other channels. 

Unsurprisingly, many retail brands are getting on board with Stitch Fix. There are now more than 1,000 partnering brands in the US, while the UK arm (which was launched last year) currently has just over 60.

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Convenience and discovery

As well as elements of personalisation, the appeal of Stitch Fix also lies in its ease and convenience. This is because – while some people might enjoy online shopping – it also requires a significant amount of time and concentration, and can even result in stress. This is amplified by what’s called the ‘paradox of choice’, which suggests that having too much choice can make decision-making harder instead of easier.

Essentially, Stitch Fix takes away the decision-making process for the customer, but (ideally) still provides them with a selection of clothing and accessories that they would have chosen themselves. This convenience also extends to payment and returns, too, as customers can try on the items at home before being charged for whatever they decide to keep. A pre-paid envelope is also included for free returns. What’s more, customers can use Stitch Fix on a flexible basis, including monthly or on-demand for special occasions.

Another reason Stitch Fix reinvents the online shopping experience is the element of discovery that comes along with it. As customers are unaware of what they’re going to receive, there’s a certain amount of surprise and delight involved, with the potential for people to discover new brands or styles that they’ve never heard of before. This element of surprise is also what hooks customers into the process, and makes them more likely to sign up for another box.

This discovery element is also a big benefit for the brands that partner with Stitch Fix, with customers’ awareness potentially translating into direct sales or loyalty to individual brands in the long run. Indeed, brand partnerships (whether in terms of sales channels or marketing campaigns) can allow companies to benefit from a combined power, which in turn helps them to build awareness and reach a wider audience.

Fostering loyalty

Stitch Fix doesn’t take this loyalty for granted, however, and has increased its focus on retaining customers in the past year or so. It has released two new features to help foster repeat and long-term customers, including ‘Shop Your Look’, which was fully released from beta at the beginning of this year. Aimed at existing customers, it allows people to find items that complement what they’ve previously bought. Similarly, ‘Shop New Colours’ allows customers to buy previously purchased items in different colours, prints, or patterns.

The aim of these features is to increase the incremental spend of existing customers. Moreover, by giving customers the option to direct-buy in between ‘fixes’, the company hopes that both engagement and loyalty will increase too.

Acquisition is also a bonus, of course, with previously sceptical customers perhaps becoming more comfortable with the addition of greater control. Indeed, with the number of active clients increasing 17% year-on-year to reach 3.5 million in Q2 2020, Stitch Fix’s strategy appears to be working.

Overall, Stitch Fix is a good example of a brand that is continuously learning: both what its customers want, and how it can best deliver it. Others in the retail space, particularly ecommerce, should take heed of its data-driven and customer-first approach.

Learn more with Econsultancy’s best practice guides:



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