How Stitch Fix is leveraging customer data points for partnerships
Stitch Fix is capturing customer data to help inform its brand partners’ future merchandising decisions.
The company — which offers personal styling services by using algorithms and data science to select clothing items — is sitting on a wealth of data with an active client base of over 3.9 million, as of its third-quarter earnings. From each customer, the company collects qualitative data from customers asking them questions like whether they purchased the products that were sent to them and what they liked or disliked about them. It also uses the Style Shuffle, a quick quiz that resembles a dating app but for clothes, to learn more about a client’s aesthetic.
At this week’s Modern Retail DTC Summit, Stitch Fix’s Chief Merchandising Officer Loretta Choy talked about how the company is leaning into customer data to create a feedback loop with the brands that it works with.
“We use the data today to essentially build products in-house and also share with our brand partners,” Choy said. “The reason why we do that is because we want to help our partners grow their brand as we grow our brands and [to connect] their products to our clients.”
Several retailers have been working to find ways to gather data. However, these insights are mostly used to develop their own products or their promotions. For example, JCPenney uses online quizzes to tailor its marketing initiatives to loyal customers.
Choy said Stitch Fix shares these data points with brand partners that have expressed that they are eager to learn more. She said the data that Stitch Fix gathers from customers have the ability to help brands grow and expand their businesses. Stitch Fix will sometimes approach their partners to share the data, and other times, the vendors will reach out to them.
One example of a brand that Stitch Fix has had these discussions with is Liverpool, a company that offers premium jeans. Liverpool launched its Plus denim line on Stitch Fix and was provided with client feedback. Choy said Liverpool continues to be Stitch Fix’s number-one denim brand for the plus category.
“We get billions of data points. It’s impossible for any person with human eyes to dig through all that,” Choy said “So we actually provide incredible reports, and in these reports, there are… pie charts, graphics, different ways for our vendors to really dig into different parts of their assortment to really understand what’s working and what’s not working.”
Unlike other data-gathering tactics, Choy said that the company is able to gather detailed responses from customers. Some of Stitch Fix’s questions are structured while others are not. Still, she said customers understand that they can benefit from giving Stitch Fix more detailed responses to these questions.
“When clients come to us, they really know that the more insights, the more information they provide for us, the better the experience is for them,” Choy said. “So we have just developed this relationship over asking these questions.”
The company said that it targets the best-performing brands where it sees a business opportunity. However, Choy said the company has never forced a brand to launch a certain product at Stitch Fix.
“I don’t ever believe in telling a brand that this is what they must do,” she said. “They have to really believe in the strategy and they really have to see the opportunity.”