Stitch Fix, The Netflix Of Clothing

Just like Netflix disrupted the at home movie streaming market, Stitch Fix is disrupting apparel retail by allow you to choose your own clothes from a selection of clothing. Stitch Fix is your own stylist on a budget. They send you five items at a time based on an interface through which you select your style preferences, budget, and fit. Customers only pay for what they want to keep and return the rest for a service fee of $20 which goes towards the purchase.

Stitch Fix, Inc. sells a range of apparel, shoes, and accessories through its Website and mobile app in the United States. It offers denim, dresses, blouses, skirts, shoes, jewelry, and handbags for men and women under the Stitch Fix brand.

Stitch Fix was launched in 2011. The company has seen significant growth since, with 2.7 million customers and more than $1 billion in revenue. The person running Stitch Fix is founder Katrina Lake and is the youngest woman ever to take a company public.

Stitch Fix has a tremendous competitive advantage over traditional retail. With over 75 data scientists, 3,500 customer stylists and a specific data capability, they know what customers like and how their clothes fit on customers. Customers join the site, fill out a detailed questionnaire about their size, how they like their clothing to fit, what their style is like, what colors they love. The algorithms analyze the assortment and feed that information into a customer’s profile where the human stylist makes the final selections of clothing and accessories before the items are boxed and shipped to the customer. Any items sent back by the customer is tracked and those data point of likes and dislikes are used during the customer’s next purchase.

Stitch Fix happened indirectly when Katrina was in a pre-med program at Stanford because wanted to follow in her father's footsteps as a doctor, but gravitated to business. She ended up working for a retail consultant group and at a venture capital firm before enrolling at Harvard Business School to pursue a master's degree in entrepreneurship. It was a class project that catered to creating a better at home shopping experience for women which sparked the idea for what eventually became Stitch Fix.

Stitch Fix's debut on the stock exchange last November, with an opening price of $16.90. The stock more than double before settling back to the high $20s currently. With a market cap at nearly $3 billion and the opportunity to take market share from traditional retail, I think Stitch Fix is just getting started.

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This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.

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by rollandthomas

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