“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!
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.
We can help people change their decisions and habits in ways that empower and delight them.
We combine the findings of behavioral economics, mobile clinical interventions, persuasion design, direct marketing, CRM, and decades of A/B split testing and optimizations into an integrated practice of behavior change marketing.
This video of our Chief recapping his time at the Yale Behavioral Economics Intensive dives into the topic in greater detail:
Want to learn even more about Behavior Change Marketing? These articles are a great place to start:
If you and your team are trying to build an inspiring action brand, or know anyone else who may find this helpful, feel free to share this amongst them. If you want to join the conversation yourself, reach out to us on twitter, we’d love to hear from you.
Thanks to the brave and brilliant contributions of one renegade, economic theory as we know it has been changed forever.
Richard Thaler, the world-renowned behavioral economist who has long challenged the standard economic model, was awarded the Nobel Memorial Prize earlier this month. His work, which Nobel Prize committee member Peter Gärdenfors simplified as “[making] economics more human,” has influenced our education system as well as government policy.
Thaler joins a small list of behavioral economists to win the award. Robert J. Shiller was among the winners in 2013, and Thaler’s longtime collaborator and friend, Daniel Kahneman, shared the award in 2002. Though they won before him, it is Thaler who is widely credited with bringing behavioral economic theories to the mainstream.
Thaler has dedicated his life to helping people understand how individuals make choices so that they can be led to make better ones. His best-selling book, Nudge, was the culmination of decades of behavioral science research, and was written to prevent people from making mistakes that can negatively affect their individual and collective well-being. That’s an inspiring mission, and one that resonates with all of us here at DiMassimo Goldstein.
We use behavioral change marketing to drive growth in brands and businesses that change lives for the better. We study the work of behavioral pioneers like Thaler to become experts at providing our clients with the strategies they need to drive profound behavioral change in the areas of healthy, wealthy and wise. Understanding human behavior is key to empowering brands to provide their consumers with a self-actualizing experience, — and that experience is what will ultimately inspire them to make better decisions and form more empowering habits.
This has been our mission for 21 years, and it’s never been more important than it is today.
We applaud people like Thaler for continuing to push the conversation forward, and for persuading more people to pay attention to human behavior. To read more about Thaler and his work, check out this article in The New York Times.
Congratulations on the honor, Richard, and keep up the good work!
And why wouldn’t they be? They’re run by humans, and we’re the most stubborn species of all.
We don’t just hate change, we loathe it. We run the other way and resist it at all costs.
And businesses, like humans, are also creatures of habit. They love their routines, and when successful, they love them even more. In these routines, they’re safe – so they repeat them until they become automatic.
But this behavior is dangerous, and for businesses, it’s downright deadly.
By nature, CEO’s and CMO’s fixate on control, and change is the antithesis of control. It brings upon the very thing they work so hard to avoid: uncertainty. It can mean abandoning the strategies and practices that got them where they are today – and worst of all, it almost always means more work.
But the world is changing, and to be successful, your brand and business must change with it.
It’s how IBM, a company that was selling cheese slicers 106 years ago is now leading the conversation on Artificial Intelligence.
It’s how Marvel, a comic book company that went bankrupt in 1996, now has two of the top ten highest grossing films of all time.
It’s how our inspiring client, Weight Watchers, transformed from a weight loss brand to a vibrant community of empowered members to achieve seven straight seasons of growth.
And it’s how The New York Times, a publication founded in 1851, is topping the podcast charts with its sponsored program, The Daily.
You may call these companies game changers, and that’s fine – but the truth is they didn’t change the game, they just reacted more quickly than their competitors when the game itself changed.
So how’d they do it?
They took actions. Brave and courageous actions in the face of discomfort. They opened doors their competitors wouldn’t – and most of those competitors are still locked out.
They hired planners – planners who became obsessed with the future. They examined trends and thought flexibly. They kept their eye on the bigger picture, when everyone else was focused on the smaller portraits of the present.
The unknown isn’t safe, but it’s where you need to play if you want to win.
So think ahead. Imagine possibilities that seem decades and decades away. The way you think consumers make decisions today will be different than the way they make decisions tomorrow.