Can combining algorithms, stylists, and mail create a DIY–personal shopper hybrid for the masses? Stitch Fix’s entire business depends on it.
Example question from Stitch Fix's style profile.
Stitch Fix / Via stitchfix.com
It's the first "fix" that's the hardest. After that, the experience becomes addictive.
So says Katrina Lake, the 31-year-old Harvard Business School graduate who founded Stitch Fix, the buzzy e-commerce startup that mails users five items a month pegged to their tastes, as determined by a combination of algorithms and human stylists.
Seventy percent of people who get their first Stitch Fix box end up getting another within 90 days. The company's goal is for customers to keep at least two of the five items, a conversion rate that would draw the envy of the most successful brick-and-mortar retailers.
Therein lies Stitch Fix's biggest challenge as it continues to scale — the company already employs more than 1,000 people — beyond early adopters: Data doesn't always align with varied tastes of female shoppers.
"Honestly, I'm very skeptical of all things that come in the mail, just because I feel my body's very unique and even with measurements, the clothes might not look good," Lainey Monroe, a 28-year-old in Fairfax, Virginia, who signed up after hearing a friend rave about the service, told BuzzFeed News. "I got my first box and I absolutely loved the style, I loved the materials, but some of the sizing was a little bit off, so I didn't end up keeping any of it. I filled out a notecard with suggestions, and they did a lot better with the second one, but I wasn't quite willing to dish out $350 for one small thing. So I sent it back with an update on measurements."
Monroe says she plans to stick with the service in hopes it improves. For its part, Stitch Fix needs its human and data recommendation cocktail to be even better — its business model depends on that.
Stitch Fix, founded in 2011, is off to a strong start with an impressive team of executives from places like Netflix, Nike, Crate & Barrel, Walmart.com, Stella & Dot and Lululemon. In other words, talent that meets at the intersection of technology, style, and mass retail, where Stitch Fix's business model resides.
The company divulges few metrics but it's said to have raised $46.5 million in funding to date, and may have an annual revenue run rate in the ballpark of $150 million, Re/code reported in June. (That's almost one-fourth of American Apparel's annual sales.) A virtual army of pro-Stitch Fix mommy bloggers post regularly about the silk blouses and baubles in their deliveries, and the charismatic Lake and her business have been featured everywhere from the New York Times to Good Morning America. Notably, Stitch Fix, based in San Francisco, has managed to become a hit in both major cities as well as rural locations like Sheridan, Wyoming, and Plains, Georgia.
Stitch Fix became even more notable this summer after Nordstrom paid $350 million in stock for Trunk Club — a similar, though pricier, subscription-box service for men. The purchase was "a great validation for the model," said Lake, who added the company "certainly appreciates the credibility it gives to our space." (Monroe, who is a compliance coordinator at a pharmaceutical company, said her friend discovered Stitch Fix while Googling "Trunk Club for women.")
More from Stitch Fix's style profile:
Stitch Fix / Via stitchfix.com
Via stitchfix.com
via IFTTT
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