{"id":5002,"date":"2017-04-05T07:43:57","date_gmt":"2017-04-05T11:43:57","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-digit\/submission\/tbd\/"},"modified":"2017-04-05T23:06:03","modified_gmt":"2017-04-06T03:06:03","slug":"stitchfix-the-data-driven-stylist","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/stitchfix-the-data-driven-stylist\/","title":{"rendered":"Stitchfix: The Data-Driven Stylist"},"content":{"rendered":"<p>&nbsp;<\/p>\n<p>Stitchfix is ostensibly just another subscription eCommerce company. You select your style, get a box of styled clothing, and pick what you like, send the rest back. It\u2019s a simple concept that\u2019s somehow picked up an insane amount of traction: since its founding, Stitch Fix has grown to 4,000 employees, and has 5 logistics centers in the continental US. It has 3,000 stylists on payroll and has raised a total of $47M<sup>1<\/sup>.<\/p>\n<p>But what has really been driving its growth? As you may guess from the title of the assignment, well, it\u2019s data! Stitchfix\u2019s proprietary algorithms and massive amounts of customer data drive perfect (or close-to-perfect) matching between boxes and customers. This drives retention and deeper spend \/ engagement.<\/p>\n<p><a href=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/04\/maxresdefault-3.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-5315 aligncenter\" src=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/04\/maxresdefault-3-300x169.jpg\" alt=\"\" width=\"422\" height=\"238\" srcset=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/04\/maxresdefault-3-300x169.jpg 300w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/04\/maxresdefault-3-768x432.jpg 768w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/04\/maxresdefault-3-1024x576.jpg 1024w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/04\/maxresdefault-3-600x338.jpg 600w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/04\/maxresdefault-3.jpg 1920w\" sizes=\"auto, (max-width: 422px) 100vw, 422px\" \/><\/a><\/p>\n<p>So how do they do it? The first time users sign up for Stitchfix they answer a series of questions that cover topics like personal style, body type, or desired cost range (\u201cthe cheaper the better\u201d is an option here)<sup>2<\/sup>. A profile is formed on the user that then feeds the stylist\u2019s choices for their box and future styles.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-5301 aligncenter\" src=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/04\/stitch-fix-profile-300x253.jpeg\" alt=\"\" width=\"444\" height=\"375\" srcset=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/04\/stitch-fix-profile-300x253.jpeg 300w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/04\/stitch-fix-profile.jpeg 600w\" sizes=\"auto, (max-width: 444px) 100vw, 444px\" \/><\/p>\n<p>If a customer sends the box back (i.e., chooses not to keep any of the items), she is charged a $20 shipping &amp; handling fee (value capture). If she keeps any of the items, the $20 is applied to her purchase. Every returned or kept item is put into the system in order to further perfect that individual\u2019s algorithm. It\u2019s a wonderful system that works best when the box is carefully crafted to match the individual\u2019s taste preferences.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-5307 aligncenter\" src=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/04\/brad-klingenberg-director-of-styling-algorithms-stitch-fix-at-mlconf-sf-111315-10-638-300x169.jpg\" alt=\"\" width=\"538\" height=\"303\" srcset=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/04\/brad-klingenberg-director-of-styling-algorithms-stitch-fix-at-mlconf-sf-111315-10-638-300x169.jpg 300w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/04\/brad-klingenberg-director-of-styling-algorithms-stitch-fix-at-mlconf-sf-111315-10-638-600x338.jpg 600w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/04\/brad-klingenberg-director-of-styling-algorithms-stitch-fix-at-mlconf-sf-111315-10-638.jpg 638w\" sizes=\"auto, (max-width: 538px) 100vw, 538px\" \/><\/p>\n<p>Stitchfix knows its strategic advantage lies in data and has allocated resources accordingly. It\u2019s built out a huge data sciences team (unheard of in the world of eCommerce), led by Eric Colson, the man behind Netflix\u2019s recommendation engine<sup>3<\/sup>. The team has created a data sorting process that leverages 50 different algorithms that run all aspects of Stitchfix\u2019s business. The algorithms help assign stylists to customers, inform warehouse operations, determine buying need down to the SKU-level, and yes, help stylists pick the right dress for the right customer. The data goes so far as to predict upcoming fashion trends<sup>2 <\/sup>so as to help stylists preempt demand.<\/p>\n<p>&nbsp;<\/p>\n<p>I believe that Stitchfix is onto something big \u2013 so big in fact that it\u2019ll be industry-shaping. It\u2019s clever use of data science for everything from operations to execution makes it an inherently more efficient and technical retailer than the competition.<\/p>\n<p>&nbsp;<\/p>\n<p>Retail \/ eCommerce is (generally) dismally bad at data, despite having loads of it. I believe that the next generation of excellent eCommerce companies will use data to drive business, rather than absorb data ex post facto. And in my opinion, companies like Stitchfix will be far ahead of the rest when it comes into fashion.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-5312 aligncenter\" src=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/04\/1-1-300x179.png\" alt=\"\" width=\"364\" height=\"217\" srcset=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/04\/1-1-300x179.png 300w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/04\/1-1-600x359.png 600w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/04\/1-1.png 701w\" sizes=\"auto, (max-width: 364px) 100vw, 364px\" \/><\/p>\n<p>The one question I do have, though, is how the stylists feel about the data\u2026and whether it\u2019ll eventually put them out of a job.<\/p>\n<p>&nbsp;<\/p>\n<ol>\n<li>https:\/\/earlymoves.com\/2017\/01\/30\/stitch-fix-the-fashion-industrys-new-darling-is-ready-to-attack\/<\/li>\n<li><a href=\"http:\/\/www.mercurynews.com\/2016\/12\/15\/computing-out-fit-stitch-fix-algorithms-machine-learning-dress-customers\/\">http:\/\/www.mercurynews.com\/2016\/12\/15\/computing-out-fit-stitch-fix-algorithms-machine-learning-dress-customers\/<\/a><\/li>\n<li>https:\/\/www.theinformation.com\/stitch-fix-wants-to-go-for-retails-jugular<\/li>\n<\/ol>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>When curation meets data, does the curator become obsolete? <\/p>\n","protected":false},"author":2784,"featured_media":5324,"comment_status":"open","ping_status":"closed","template":"","categories":[814,647,1347],"class_list":["post-5002","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-ecommerce","category-retail","category-subscription-based-business-models"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-digit\/assignment\/data-and-analytics-as-digital-assets\/","yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - 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