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Category : 10 Keys

Inspiring Action Brand of the Month: Stitch Fix

“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.

And in November 2017, Katrina took the company public, making her the youngest female ever to take a company public. Which brings us to today, where Stitch Fix is using its data-driven model to spearhead the future of personalized fashion.

Five years.

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!

INSPIRE ACTION

Key #9 of 10 to Inspiring Action: 10 Keys to the Future of Marketing. Download our summary poster of the 10 Keys here

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Every business and brand that grows has a Golden Goose.

Sometimes that’s sales. Sometimes it’s direct mail. Other times it’s e-commerce and a digital, affiliate network. Sometimes they tell me it’s “word-of-mouth.”

For a while, whatever it was, it produced the Golden Eggs. It worked. And the Goose’s enemies were marketing and branding. Or perhaps they were the Goose’s servants, such as when the marketing team was really the sales collateral team. Or the direct mail team. Or the in-house studio.

“Our salespeople sell and they’re starting from zero.” “We’re the leader in our category, but no one knows it.” “This channel is just getting too expensive – we need what’s next.”  The Inspiring Action Moment is launched with sentences like these.

Our clients have some things in common. They can’t wait two years or even six months for “the brand campaign” to start working. They can’t tolerate poorer sales numbers while they invest in getting more famous. And they aren’t willing to match large advertisers dollar-for-dollar in order to capture a share of the market.

The kind of brand building they need is the kind that makes the selling more efficient right away. They need the kind of brand building that improves their return-on-marketing-spend right away, and then just keeps getting better.

And often they need more than a marketing revolution. They need at least an internal culture evolution as well. They need a team with a new common understanding of what it takes to succeed at the next level today.

This is what we mean when we say “inspiring action.” The great thing about an Inspiring Action Moment is that it can lead to the most exciting and impactful era for a business. Are you ready for yours?

-Mark DiMassimo, Chief

 

Prioritize Creative Excellence

Inspiring Action

Key #8 of 10 to Inspiring Action: 10 Keys to the Future of Marketing. Download our summary poster of the 10 Keys here.

I led a brainstorm with a new client just the other day.

Their list of “growth blocks” was so like what other marketers have said, I thought I’d share them with you (and let you in on a powerful solution):

“We have the goods, but we don’t connect with the audience as well as we should,” admitted the COO, who had previously been the CMO.

“Seems like there are two kinds of creative people — those that understand the product and those that are great at talking to the audience. Unfortunately, we’re having a lot of trouble finding the overlap,” said the marketing director, still working through the grief of the recently ended agency relationship.

The internal creative director continued: “Most people don’t define creative excellence the way we do either. To us, it’s all about results first, and yes, being true to our brand. But that doesn’t seem to inspire or hold the attention of the best creative people. Plus, how do you literally put two messages into one communication. Isn’t that going to hurt results? I’m confused …”

Prioritize Creative Excellence.

What works better for growing a brand and business: great creative or powerful sales activation?

Here’s an intensive analysis of all 700 cases in the files of London’s respected Institute for Practitioners in Advertising (IPA), which found that companies with both outperformed those with either by a wide margin.

In fact, they found the two most important factors for success were advertising spend and creative excellence (as measured by, believe it or not, awards). Of those two most important factors, creative excellence even edged out size of budget as the most important factor.

In an increasingly crowded marketing landscape, great brands win. Great brands are built by great experiences, amplified by communications that move people powerfully. Smart marketing organizations are full of great strategists and brimming with great strategies ready to be tried. Most simply fail to be executed with great, on-strategy creative.

Connecting great marketing to winning creative isn’t easy, which is why it’s not normal either. Getting two very different tribes to work together to transcend the ordinary takes specific values and skills. Check out my Inspiring Action in Creative Teams: Seven Strategies for Prioritizing Creative Excellence.

-Mark DiMassimo, Chief

 

Practice Brand Direct

Key #7 of 10 to Inspiring Action: 10 Keys to the Future of Marketing. Download our summary poster of the 10 Keys here.

One of the best things about doing my Inspiring Action Interviews has been the opportunity to have deep conversations with several of my most successful clients.

These are the CMOs that CEOs worship – marketers who have been highly successful again and again.

A common theme came up as we talked about the formative experiences we’d shared.

PODCAST THUMBNAIL

“Since that time I’ve been what you’d call a Brand Direct marketer.” – Ty Shay, CMO LifeLock

“That methodology has become the methodology I’ve applied ever since.” – Leslie Dukker Doty, CMO the Reader’s Digest Association

I first wrote about “brand direct” publicly almost twenty years ago. Since then the direct economy has taken over our lives, and just about every industry has been disrupted by it. This has mostly been a very good thing for me, as our clients over the past two decades have been doing more than their share of the disrupting.

Drowning in data, today’s marketers cry out for coherence. Even with programmatic trading desks, dashboards and optimizations, incremental improvements are only detectible to sophisticated machines.

Significant, meaningful, ongoing improvements in marketing efficiency are still possible, however. They simply require more than mere visual and verbal consistency.

direct-big

The answer begins with a journey of discovery. The path of that journey is the customer journey itself. Together, we learn to see things from the customer’s point of view, from the prospect’s perspective. We uncover the insight – the inspiring idea – that will change and organize everything.

Then, together, we mine that inspiring idea to accelerate growth by up to ten times. Of course, this also dramatically alters the marketer’s journey!

Let’s alter your journey too!

-Mark DiMassimo, Chief