How does one carefully balance Digitalization with Personalization, and furthermore, convert it into a scalable Business model within a highly dynamic industry? Katrina Lake, CEO of Stitch Fix, might be one of the best examples of having done it down to a tee.
Founded in 2011, Stitch Fix is an online personal-styling providing company, with AI and deep-learning forming its backbone. Their Business model – make use of Data and Algorithms to exactly guess what Customers would like, provide them with a set of 5 personally hand-picked clothing and accessory items (called as a Fix box) as recommendations and letting them decide what to purchase. Though there have been various players providing the same kind of service, what set Stitch Fix apart was their strong AI and Data-learning capabilities. For an apparel-based company, Stitch Fix has more than 100 data-scientists reporting directly to the CEO.
Today, the company offers more than 1000 brands in their collection line, including their own in-house white-label clothing brand, Hybrid Designs. The company went public in 2017, with Katrina Lake becoming the youngest female CEO to ever lead a company to IPO. Today, the company generates more than $1.6 billion dollars, annually, through subscription and sales and has more than 5000 stylists in the team.
What made the Stitch Fix business-model so successful? Here are 3 major take-aways from their story:
Making Data Science the core of Company’s Culture
The biggest factor that separated Stitch Fix from the existing players in the Fashion Industry was their focus on a data-driven approach. “Data science isn’t woven in our culture; it IS our culture. Rather than adding data-science to a traditional business structure, it is the heart of our business. We built the company’s algorithms around our clients and their needs”, says Katrina.
Combination of a futuristic approach and modern technology
Just like many other successful companies, Stitch Fix, too, maintained a visionary approach, right from their inception. At a time when e-commerce industries were forcing brick-and-mortar shops to shut-down, but customers just getting acclimatized with online shopping, Stitch Fix followed a mid-way path that addressed this problem in a very effective manner. Backing this up with the available data, the company digitalized personalization and succeeded in giving customers what they wanted.
Not neglecting the ‘Personal Touch’
At the end of the day, retail shopping is one of the most experience-rich industries, with people wanting the best of an ‘amazing shopping experience’ within the comforts of their home. Stitch Fix kept Data-science at its core, but also retained the human touch, with stylists being able to over-ride automatic suggestions for a more personalized shopping. This ensured that their customers always felt the right amount of human interaction and the entire system was not based only on automation.
Stitch Fix has successfully pioneered the concept of leading a data-driven non-IT company. Though data is accessible to all, the company has made the best use of it to provide state-of-the-art services to the general public, with a balance between people and data.