In 2011, then-Harvard MBA student Katrina Lake founded Stitch Fix to solve a problem she herself was having: She wanted to buy clothes she loved without spending all her time shopping.
By combining the personal touch of trained stylists with a computer algorithm and a subscription model, Stitch Fix was able to serve its customer base and grow into a $3.8 billion company. But this past year, things have started to change.
Lake stepped down and former Bain & Co. partner Elizabeth Spaulding, who previously was Stitch Fix’s president, took the helm of the company Aug. 1. With a focus on driving further expansion, she has apparently been overseeing an increased reliance on algorithms for picking outfits for clients, drawing backlash from stylists (and some customers).
Now the San Francisco, California-based company made an even harder turn in favor of the robots, and away from the model that established its brand. “Freestyle,” launched in September, offers an experience more akin to shopping at a department store. It removes human stylists and subscription boxes from the equation entirely, and allows customers to shop for individual pieces with help from the algorithm.
The new vision has fans in the financial sector, who see Stitch Fix as trying to expand beyond the limits of the subscription-based personal styling market to capture more of the $127 billion in annual apparel and footwear sales in the countries where it operates. Spaulding has said that the goal is to build customers “their own personal store” and transform the online shopping experience.
But there are a few potential problems with that approach. For one thing, there are plenty of online clothing stores, so the market is much more competitive than for personalized subscription boxes. Second of all, the brick-and-mortar retailer experience Stitch Fix is trying to replicate online with Freestyle still exists in real life, and can be more enjoyable in person. And perhaps most importantly: If Stitch Fix’s customers wanted to shop for their own clothes, they wouldn’t have come to Stitch Fix in the first place.
“The company is putting all their eggs in the basket of Freestyle,” a former Stitch Fix stylist who we’ll call “John” (he wished to remain anonymous), told us. That could prove disastrous for the company if it’s the wrong bet.
Stylists have been particularly vocal about criticizing the new direction at Stitch Fix. They have complained that they are being pushed aside, are not treated fairly, and have been forced by the algorithm to select inappropriate items for clients — such as heavy coats for people in Florida. Speaking to us recently, John, the former Stitch Fix employee, described other concerning trends suggesting the company might be losing sight of its personal-styling focus.
Among those he pointed out: Stylists no longer see notes left by clients when they schedule their “fixes” (the word Stitch Fix uses for its subscription boxes of clothing). Access to consumer preferences has also been taken away from stylists. Time for putting together a “fix” has been cut down substantially, and stylists are only permitted to choose from options pre-selected by the algorithm.
We reached out to Stitch Fix for comment. The company's PR team provided a generic email response which did not address our questions and instead provided a list of media articles that had been published about the company and Lake.Now Freestyle put the algorithm completely in charge. It is supposed to deliver items to a customer’s “personal store” based on what they’ve purchased in the past or shown interest in.
“What Freestyle does is it’s your own personalized store,” Spaulding said at Yahoo Finance’s recent All Market Summit. “You can open up our app or mobile web experience and we are dynamically generating a home feed and a shopping feed of looks just for you.
However, it’s unclear whether the service will measure up to these bold pronouncements. I’m a regular Stitch Fix customer. My personal Freestyle store’s first offering was a pair of brown leather wide-legged, capri-length culottes. I don’t wear brown, capri length items, or culottes. In six years of buying from Stitch Fix, I’ve never bought anything remotely similar to that option. In a perusal of my personal Freestyle offerings there was not a single thing I would purchase.
Spaulding’s background reflects her analytics-heavy approach. She joined Stitch Fix in January 2020. Before coming to the company, her career was mostly in consulting, having spent 21 years at Bain. She also spent about four years at retail tech platform MarkerSights, where she helped “predict product demand” yielded “better insights for leaders in the apparel and consumer sectors,” according to her LinkedIn profile.
Can Freestyle work? Maybe. But it could risk alienating customers who would rather pay the usual $20 styling fee to have items personally-selected for them, at least partly by human beings. In a crowded e-commerce universe, being able to shop for items in a “personal store” might not be a special enough experience to stand out.
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