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Stitch Fix Goes After a Wealthier, More Fashion-Forward Customer

The personal styling startup has added more than 100 new brands to elevate its offering — and it wasn't easy.
Photo: Stitch Fix

Photo: Stitch Fix

In case you're not familiar, Stitch Fix was one of a few personal styling startups to pop up a few years ago. The six-year-old, San Francisco-based company allows users to fill out a simple survey that in-house "stylists" use to create an assortment of clothing items that are then sent to the user; he or she (Stitch Fix recently added men's and plus-size categories) then keeps and pays for what they want and sends back what they don't.

These types of services aren't designed to target everyone — many of us would much rather pick out our own clothes — but it's successful among the busy men and women it's targeting thanks to a combination of both human stylists and tech-driven algorithms that find clothing its clients will like. A big reason for Stitch Fix's success is the data and feedback it regularly collects from its customers, based on which it can adjust its offering; and recently, it noticed something was missing, something that suggests that even men and women who don't want to shop for themselves have high standards.

Most of the items Stitch Fix sends to customers cost under $100, but it found that some were interested in more expensive pieces. So, on Tuesday, it added over 100 new brands at a higher contemporary price point, from about $100 to $600. (Think Alice & Olivia, Kate Spade, Rebecca Minkoff, Theory and Helmut Lang.) 

There are a couple of reasons why Stitch Fix is making its offering a little fancier: One is that customers were asking for it, according to Lisa Bougie, GM, Stitch Fix Women. Clients select price point preferences when they fill out their profile and were increasingly indicating they'd be willing to spend more. They also often mention brands they'd like to see on the site when leaving feedback after making purchases, she said.

Photo: Stitch Fix

Photo: Stitch Fix

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The other: "new client acquisition." Bougie hopes the extension will bring in customers Stitch Fix wasn't serving. What Stitch Fix isn't trying to do, she says, is get existing customers to stretch their budgets and spend more. "We honor and respect their preferences exactly as they communicate them with us," she notes. However, they know that many people prefer a high-low mix, and she says 1,000 stylists have been trained on how to incorporate these higher-end items into customers' shipments in a nuanced, personalized way. It's also worth noting that retailers generally get a bigger profit margin on more expensive items.

Given all the data Stitch Fix has on its customers, deciding to expand its offering was almost a no-brainer; the challenge came when it was time to try and get those brands to work with Stitch Fix. A startup like Stitch Fix was uncharted, non-traditional territory for many of these brands, and they needed some convincing, says Bougie. 

"There was definitely an education process that took place; they had heard of [Stitch Fix] but didn't really understand the intricacies of the business model," she says. She focused on telling potential brand partners how they would benefit from a relationship with Stitch Fix; the data it can provide on factors like fit and price-quality perception was a big selling point. She also emphasized that Stitch Fix is a full-price business, whereas many of the alternative or non-traditional retail distribution formats brands might work with nowadays are focused on discounting. Bougie says brands were able to appreciate Stitch Fix's ability to respect and uphold brand integrity and match items to the right consumers.

Plus, in a retail landscape where traditional business models aren't really working, most brands would be wise to try something outside the box.

As for whether Stitch Fix might eventually try to bring in even higher-end, designer-level brands, only time will tell. "We're constantly reading the feedback and our data to understand how to better serve our client," says Bougie.

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