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Stitch Fix Case Study Personal Use Ebook

Stitch Fix Case Study Personal Use Ebook
License Type: Personal Use
File Type: ZIP
SKU: 62119
Shipping: Online Download
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TAKING A LOOK AT STITCH FIX

Overview

The company was started in 2011 by Katrina Lake and Erin Morrison Flynn.

According to an article in Forbes, the company earned $1 billion in revenue for 2017 and had 2.2 million active subscribers.

The company is publicly-traded and is required to release financial statements. For the first quarter 2018, the company stated it earned $295.9 million, which represents a 25% increase for the quarter compared to the same quarter a year ago. If the company keeps up this revenue surge, it can expect to surpass the $1 billion revenue for 2017.

The company started out being run from Katrina Lake’s apartment while still attending Harvard University. The concept of the company is believed to be a business school project, and it took off from there.

How the Company Started

Katrina Lake started the company out of her living room while still attending Harvard University. She has always believed that people should have access to one-on-one styling and wanted to bring that concept to market.

According to CrunchBase.com, the company raised approximately $42 million between 2011 and 2014. The initial startup capital was used to fund inventory. After releasing the concept to the public, it was a success, and the company could operate on the proceeds. The company went public in 2017 and had shown to be a successful IPO.

Initial Problems

Amazon and other competitors are catching onto the concept that Stitch Fix uses for its business model. The company will face increased pressures going forward. This could put pressure on subscription fees and prices. Amazon is likely to put the biggest pressure on the company.

Why it Works

The company uses Artificial Intelligence (AI) and Machine Learning (ML) to improve the customer experience. For instance, the business model of the company is to send sets of clothing each month as part of a subscription. The company acts as the subscriber’s personal stylist. The AI uses the subscriber’s patterns of buying to adjust the algorithm and make a better match for future selections.

https://www.forbes.com/sites/bernardmarr/2018/05/25/stitchfix- the-amazing-use-case-of-using-artificial-intelligence-infashion- retail/#5fd664753292 The computing power of AI and ML are also used to analyze trends in the industry. It can use the analysis to shift its product focus to subscribers, or at least offer more choices.

As the company states on its website, it takes a personal approach and couples that with technology. The company mentions that they do more than simply curate collections of clothes. They match likes and preferences and make changes when the customer does.

The company started out catering to women only. However, it has expanded to include a service for men and plus-sized people. Recently, the company has introduced a high-end line for people who want to take their style to a new level.

Promotion:

Subscription models are a fantastic way to generate income from the subscribers for several months and even years. It does require keeping the subscribers happy, though. That can be a challenge as other online retailers, and eCommerce sites will try to steal customers. However, with subscriptions, people tend to hang onto them longer than they anticipated and sometimes don’t get around to canceling until the next period (or even the one after that.) The company has introduced the service to men. This could help boost sales as men are becoming more focused on their styles and want some attention given to help them.

Customers are asked to fill out surveys about their likes and preferences when they sign up for the service. If they specify their social media profiles, the company will use that to view the customers’ posts. If they are related to style, the company tries to incorporate that into the monthly product sends.

Like many fashion companies, Stitch Fix offers an influencer program. This is similar to an affiliate program in that the company will pay influencers cash for customers who sign up through the influencers’ websites. However, influencer programs tend to be more intimate and give the influencers access to exclusive features such as a private Facebook group, etc.

Stitch Fix offers gift cards that customers can redeem and buy directly on the company’s website. These perform better during the holiday season.

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