How Stitch Fix uses data to create personalised experiences

Having AI pick out your outfits for you feels very Ex Machina.

But everything around us seems to be turning increasingly dystopian, so here we are.

And as far as robots taking over goes, Stitch Fix is actually pretty cool.

Stitch Fix is an online personalized styling service based in San Francisco. The e-commerce company uses recommendation algorithms and data science to pick out clothes for you, based on your size, budget and style preference.

Using AI and professional stylists, Stitch Fix selects and sends you items they think you’ll like. Then you can choose to keep the ones you want and send the others back.

The fashion retail space is overcrowded and constantly changing (looking at you, fast fashion.) So there’s an incredibly small amount of wiggle room to break into it.

So, how did Stitch Fix manage to fight its way out of the crowd to become a winning e-commerce tale, worth $1.30B US as of this year?

Well, since we’re getting lazier, we need things to be easier, and Stitch Fix is easy.

But, mostly importantly, you are the brand's focus.

Well, you and your data. All companies want data. It’s integral to the understanding of your processes and decisionmaking. However, Stitch Fix has found a way to use data to reach beyond feedback they would get from customers through simply purchasing.

By letting customers swipe through different styles in their tinder-esque feature ‘Style Shuffle,' they amass mounds of data. They use this to understand demographic trends shaping the fashion industry.

Stitch Fix also uses these billion-something data points to heavily personalise their service, and at scale. The brand makes money on clothing sold more than it does its subscription fees. So their profit is directly related to how well they've personalised each box.

And the other side of that coin is that customers are happy to offer feedback because they know it will make their experience better. More data in, more data out. It’s a symbiotic relationship that fuels Stitch Fix’s success.

This data also fuels the company’s innovative algorithms.

Stitch Fix's revenue is dependent on recommendations from these algorithms. So they also place a huge emphasis on data science throughout all other aspects of the business.

'We’ve developed dozens of algorithms that no one ever asked for, because we allow our data science team to create new solutions and determine whether they have potential,' Stitch Fix CEO Katrina Lake told HBR.

'Our algorithms help us see trends earlier and more accurately, so we can stock inventory more efficiently and be ready for spikes in demand.'

The brand also came up with a way to track employee movements in their warehouses. Then they created an algorithm to optimise routes without remapping the space.

Keeping it real.

While all that high tech stuff is cool, the company acknowledges that shopping is an inherently human activity. So they insist on combining their data with a human stylist who can alter or override the product assortment delivered by their styling algorithm.

You know, just in case the robot picks out something ugly.

So, what can we learn from this innovative success story?

Aside from the fact that it’s not all 'dystopian future, robots taking over, bad bad bad,' there are some good takeaways from Stitch Fix.

• Seamless user experience is KEY. I don’t know about you, but if I find anything even remotely annoying or clunky to interact with, I’m aborting mission. Stitch Fix’s success highlights the importance of creating a hassle-free and enjoyable user experience.

• Leverage data for personalization. Like I said, it’s not all bad robot. Stitch Fix is a great example of how effective data use can lead to highly personalized services that increase customer engagement. It’s a powerful tool for any business.

• Balance. Advanced algos and AI are at the core of Stitch Fix’s operations. But their call to keep humans in the process ensures the service remains relatable and adaptable to individual nuances that the machines might miss.

If we could get the robots to dress my lazy ass next, I’ll 100% write off my dystopian theories.

-Sophie, Writer