“Five years from now, people will say, ‘Remember when we had to wander malls and find our own things? That’s crazy!’”
That’s the behavior change that Eric Colson, the Chief Algorithms Officer at Stitch Fix, is betting on.
It may sound like a drastic change, but in today’s digital world, drastic change is the new normal. Small, smart, and disruptive brands with fewer resources and nothing but a powerful and inspiring idea are, almost overnight, transforming our behaviors in ways like never before. We’ve seen it with the likes of Airbnb and Dollar Shave Club. We’ve seen it with Casper and Betterment.
And now we’re seeing it with Stitch Fix, the online personalized styling service that is reinventing the fashion shopping experience.
Let’s go back to Colson’s prediction. The timeline he provided was five years.
Five years ago, Stitch Fix was hardly more than just an idea in founder Katrina Lake’s head – combine innovative technology with the personal touch of seasoned style experts to change the way people find clothes.
During those five years, she received funding but not much. With less than $50 million raised in the company’s history, she was able to grow the company at an unprecedented rate, raking in nearly a billion dollars in revenue at the end of 2017 – creating what has been dubbed the most cash-efficient e-commerce company of the decade.
Five years was all it took for Katrina to turn that inspiring idea into a billion-dollar company.
OK, OK … maybe it was six years (Stitch Fix was founded in February of 2011), but you get the point!
So, how did she do it? What is Stitch Fix’s secret sauce?
Like so many other disruptors, they thought differently. They did differently.
In an era where technology is all the rage, brands everywhere are competing in a race toward lower costs and convenience in nearly every industry. Stitch Fix took a different route.
Since its inception, Stitch Fix has always been focused on the consumer, understanding that the technology itself is less important than the customer experience of the consumer through the technology. That’s not to say Stitch Fix isn’t a tech-led company, because it most certainly is, but that technology is harnessed and focused toward a different goal: personalization.
Behavior-Changing Data Science
Here’s how it works: Consumers fill out a survey, or a “style profile,” indicating their style preferences. Questions range from size, price point, and preferred colors to how often a consumer dresses for certain occasions. On average, each client provides 85 meaningful data points. Clients are even encouraged to link their Pinterest boards to their profiles. Clients then schedule a date to receive their “fix,” which can either be a monthly subscription or a la carte, an important distinction that makes Stitch Fix different from competitors.
That information is then run through a list of algorithms, which you can tour on Stitch Fix’s website here. The data then matches the customer with a human stylist, who, with the information provided, creates his or her “fix” of five items and then sends the box directly to the customer.
Once received, the customer has three days to either keep the items or return them. If the customer keeps an item, an additional styling fee of $20 is given to the stylist. If the customer decides to keep all five items, he or she receives 25 percent off the total cost of the items.
This strategic use of data is what makes Stitch Fix so unique. Merging fashion with technology, Katrina can leverage that data to make the business much more efficient. She can forecast purchasing behavior and merchandize optimization. On the consumer side, the data is used to create complex algorithms that help match customers with styles and stylists they love, and Stitch Fix has even begun experimenting with designing new styles specifically for consumers.
Stitch Fix employs over 80 data scientists with doctorates from a variety of disciplines, including astrophysics and computational neuroscience. That team is led by, you guessed it, Eric Colson. If there’s anyone who knows how to change behaviors, it’s Colson. Prior to joining Stitch Fix, Colson was the VP of data science and engineering at Netflix, where he fueled the company’s recommendation and targeting engine, helping us discover our new favorite shows and forever altering the way entertainment companies operate.
In a digital landscape that has already forced traditional brick-and-mortar retailers out of business, Stitch Fix sits in an enviable position, with an unmatched wealth of data on the changing behaviors of consumers. Stitch Fix knows what consumers like and what they don’t like, and each sale or return makes the company smarter. It’s a business model that thrives off engagement. The more feedback a consumer provides, the better suited the “fix” will be.
Stitch Fix is capturing the future. It is changing the way people shop, offering a more personalized, curated, and delightful experience and making the try-on room a thing of the past.
What you wear is an extension of your own personal brand, and consumers more than ever are going to market for guidance and help in shaping that brand. Stitch Fix delivers the type of clothing you didn’t even know you needed. It stays up on the trends for you. It takes the hours of browsing or reading up on fashion tips out of the equation and delivers it all to you in a personalized way that no other e-commerce outfit can compete with.
But it’s not all algorithms and numbers. It’s the Stitch Fix stylists that build trust and loyalty with the consumers. They take time to get to know their consumers on a personal level, leaving handwritten notes and creating the type of emotional connection that makes an otherwise digital experience feel human.
In a letter to investors, Lake said, “I founded Stitch Fix to take on a very human problem: How do I find clothes that I love? Spending a day at the mall, or devoting hours of time sifting through millions of products online is time-consuming and overwhelming and neither effective nor enjoyable. I knew there had to be another way.”
Today, Stitch Fix is another way, but in five years from now, it may be the only way.
Tony Hsieh, the CEO of Zappos, once said that “a great brand is a story that never stops unfolding.” And while Stitch Fix’s story is still very much being written, the first few chapters alone have already built a story worth telling. We can’t wait to see where it goes next.
That’s why Stitch Fix is our Inspiring Action Brand of the Month!
No doubt, this makes me an eccentric marketer and an odder ad guy, and casts extreme suspicion on my membership in the creative community.
Marketers are supposed to want to run their own empires – otherwise why spend all that money on a Harvard MBA and all that energy climbing the corporate ladder? Creative directors think the ideal client listens to their presentations, and then applauds. Ad agencies think their job is to please the target audience no matter what the client might think.
I’ve always hated that stuff.
You don’t let your target audience tell you what to be any more than you let your friends tell you who to be. There’s no integrity, surprise or life in that at all. Yet, in many places, it’s the norm.
And you don’t go to a dynamic, growing company – or a turnaround – to run a department like a fiefdom. You go there to be a key member of the CEO’s leadership team. You need that CEO to help you succeed even more than the CEO needs you.
I’ve always sought out clients with vision. Not rude or insulting, but laser focused, blunt, and as domineering about the brand as possible. Sometimes they are articulate. Sometimes they just know it when they see it. Either way, as long as there is really an “it” that will ultimately differentiate the brand in a world of bland, I’m in.
There will be twists and turns. I’ll hang in. I’m in it for the ride and because I believe in the destination.
As a marketing director or CMO, you are going to get the ride of your life working for a Founder CEO, and the twists and turns are no small part of it.
That inertia you feel is the marketing strategy hugging the road of a changing growth strategy. That’s a feeling you’ll rarely get in a big, lazy company.
But if you care about getting to the destination, you’ve got to care about making all the right turns along the way.
It’s exhilarating. But it’s not for everyone. If you can deliver on the business results, if you can be resilient through the twists and turns, and if you can bring on partners who share your passion and resilience, you will become irreplaceable to your visionary leader.
You’ll play your best game along side stunning colleagues. These will be the days and years you’ll never forget.
If you want to make a mark in the world, this is the way. And I’ll see you at the weekly meeting with the Founder/CEO.
The year 2017 was the year of behavior change marketing. Here is our list of marketers who changed our behaviors for good, for bad, and maybe forever. If there are any brands you think deserve to be added to the list, tweet us here and let us know!
People pay us to get people to do things.
And we’re really good at it.
It’s an awesome responsibility.
Changing people’s behavior.
Their decisions and habits.
That’s why we’re not a “performance marketing” agency. Or a “digital” agency. Or a “direct” agency.
That’s why we’re an Inspiring Action agency.
That’s why we only incite more inspiring actions.
And more empowering habits.
And why we use our powers to ignite growth only in organizations that promote those kinds of behaviors.
But responsibility isn’t the only reason.
People bet their careers on our results every day.
We have learned by long experience that inspiring action simply works better.
We learned by being in big, siloed agencies that undermined our results by separating us.
We learned by proving it through results.
That the two most important factors for igniting growth are Inspiration and Action.
Inspiration – is there an idea or experience at the core of the brand that inspires unreasonable passion.
Action – is there urgency and ease and flow and momentum in the funnel of actions that create even deeper engagement and customer value.
Inspiring Action ignites growth by changing behaviors. Each one of us made an inspiring decision to come together.
To use what we’ve learned to inspire action for worthy organizations.
Let me start by saying, we here at DiMassimo Goldstein love a good bar crawl. Be it for a 21st birthday, bachelorette party or a fantasy football draft. A small group of friends hitting up one bar at a time in embarrassing matching T-shirts one person in the group all demanded they wear can be a lot of fun.
And then, there’s SantaCon, when thousands and thousands of overserved Santas, inebriated elves and freaky Frostys takeover the streets and bars of cities around the globe. Every year here in New York, there are articles about bars and businesses bracing for the impact of SantaCon, while neighborhoods fight over who has to host the thing, like relatives arguing over who has to take home an unwanted fruitcake. It’s annoying. It’s inconvenient. And most of all…is that cool for kids to see Santa and his friends acting that way?
At DiGo…we don’t think so.
We noticed that these drunken Santas mostly seem to be of a certain age that is both a.) far from their belief in Santa Claus and b.) far from the stage in life where they would have a child of their own who believes in Santa. And because of this, they don’t realize that their “unique” portrayal of old St. Nick does not go unnoticed by young eyes.
That’s why we partnered with our friends and creative collaborators at Crew Cuts and made this ad to encourage people to #SitOutSantaCon.
We wanted to hear from the children themselves some of the horrors they have witnessed during SantaCon, in order to maybe encourage people who were planning on going to SantaCon to if not sit it out completely, at least please, think of the children.
In just under a week, the video amassed over 20,000 views (and counting). The social campaign received over 50,000 impressions and was picked up by ten different publications, including a write-up in Adweek and a televised feature on Pix11.
Our Facebook event received over one hundred RSVPs – that’s 144 small inspiring actions that together can make a big difference.
Thank you to all who supported the campaign and helped spread the word. We’re looking forward to continuing this mission next year, and with your help, we can end SantaCon in our lifetime.
This week on The A-List Podcast, host and DiMassimo Goldstein CCO is joined in the studio by Sandy Greenberg and Terri Meyer, co-founders of TERRI & SANDY, an award-winning, brand-igniting agency that was recently named Ad Age’s Small Agency of the Year.
Before founding their own agency, both Sandy and Terri left their creative marks on some of the biggest agencies in the world, helping to build some of the most iconic brands, including Mars, Kraft, Campbell’s, Disney and Nestlé. Along the way, they’ve won virtually every industry award, including twelve Effies. Terri and Sandy’s work has permeated popular culture, and has been featured on TBS’ Funniest Commercials, Conan, CNN, The View, Fox News, Access Hollywood, and Today.
For just under an hour, Terri and Sandy tell Tom all about starting their own agency, why young creatives struggle with strategy, the importance of building a strong client relationship, and so much more. Full episode and show notes below!
[0:00 – 1:42] Intro
[01:43 – 4:03] Terri talks about growing up in St. Louis, and how she knew she wanted to be an Art Director from as early as age 15.
[4:04 – 7:17] Sandy talks about moving all over the East Coast during her childhood, and getting her first gig at D’Arcy in St. Louis.
[7:18 – 9:51] Sandy and Terri recall how they first met, and why it took some time for the two to become friendly with each other before eventually becoming partners.
[9:52 – 14:07] What it was like being a female team in the early 90’s, and why politics are the dark side of advertising.
[14:08 – 17:39] The two creative mavens discuss each other’s strengths, why loyalty is so important to a good partnership, open communication, and screaming until you laugh.
[17:40 – 21:46] The two discuss some of their early work together, like the Twix “Oh Yeah” spot, and why young creatives struggle with strategy.
[21:47 – 28:33] The story of Sandy becoming Terri’s birthday present, remembering the wisdom of Richard Levenson, and the importance of not burning bridges.
[28:34 – 32:39] Terri and Sandy talk about starting their agency 7 years ago, and how not having a plan took them from a couch at Terri’s house to on office on Broadway.
[32:40 – 39:10] Building a great client relationship through honesty and listening.
[39:11— 41:00] Growing an agency culture.
[41:01— 44:08] Terri and Sandy talk about some of the favorite campaigns they’ve worked on, including Avon’s “This is Boss Life”
[44:09 – 50:00] How advertising has changed since the Mad Men era, and why agencies need to unite more to give back.
[50:01 – 50:52] Outro
“The A-List” is a podcast produced by DiMassimo Goldstein, recorded at the Gramercy Post, and sponsored by the Adhouse Advertising School, New York’s newest, smallest, and hippest ad school. You can subscribe and rate the show on iTunes or listen along on SoundCloud. For updates on upcoming episodes and guests, be sure to like the A-List Podcast on Facebook and follow host Tom Christmann on Twitter.