Stitch Fix expands client base to 3.4 million, appoints a new executive president.
Stitch Fix Expands Personalized Shopping Options and Reports Strong Q1 2021 Results
In a move to enhance its personalized shopping experience, Stitch Fix has announced several new features and expansion plans. The American online personal styling service company, known for its algorithmically personalized clothing and accessories, is set to roll out new initiatives that aim to further tailor its offerings to each client's unique preferences.
One of the key innovations is the introduction of the 'Shop New Colors' option. This feature allows clients to purchase previously bought items in new colors, prints, and sizes, providing a fresh take on popular items. Furthermore, the company is planning to extend this feature to its kids offerings by the end of 2020.
Another significant development is the expansion of the 'Shop Your Looks' feature, a hyper-curated and algorithmically personalized selection of 30 to 40 items based on a shopper's past preferences. Currently available to about a third of Stitch Fix's female clientele, the company plans to make this feature accessible to all female clients and begin testing it with men by the end of the fiscal year.
Stitch Fix's commitment to data science and personalization has been a key driver of its success. Mike Smith, COO of Stitch Fix, emphasized this point, stating, "We have the ability to use data science to match inventory to each client's unique preferences." This approach has proven effective, with a study by Monetate and WBR Research finding that 93% of businesses with advanced personalization strategies increased their revenues.
The company's focus on personalization seems to be paying off. Stitch Fix reported net revenue of $445 million for Q1 2021, showing a 21% year-over-year growth. Revenue per active client also grew by 10% year over year, and the active client base reached 3.4 million, an increase of 17% year over year.
However, the company did report a net loss for Q1 2021 of $178,000, compared to income of $10.6 million in the same quarter of the previous year. Adjusted EBITDA for Q1 2021 was $5.1 million, or 1.2% of net revenue.
In other news, Paul Yee is stepping down as CFO, with COO Mike Smith serving in the interim while Stitch Fix searches for a new CFO. Elizabeth Spaulding, who comes from management consulting firm Bain & Company, has joined Stitch Fix as president. Spaulding started her role at the beginning of 2021, while Yee resigned as CFO in March 2021.
Stitch Fix reports that clients who purchased through Shop Your Looks interacted with the company multiple times, indicating a positive impact on customer engagement. The company's data-driven approach, combined with its commitment to personalization, seems to be resonating with its clientele.
According to a statement by Lake in the Harvard Business Review, data science is considered a central part of Stitch Fix's culture. With the addition of Elizabeth Spaulding and the planned expansion of personalized features, Stitch Fix is poised to continue its growth trajectory. The company aims to exceed revenue goals, joining the 77% of businesses that did so in 2018, by maintaining its focus on personalization and data-driven decision making.
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