As Stitch Fix takes a hit amid its ongoing transformation, the online personal styling service is using its comprehensive insights about its customers to drive loyalty going forward.
The company shared in its second-quarter fiscal 2024 earnings results Monday (March 4) that net revenue was down 18% year over year as the company rethinks its business to improve its organizational infrastructure and adjust the user experience to best appeal to high-value customers.
On a call with analysts, CEO Matt Baer noted that the key to its efforts to drive engagement is the brand’s extensive access to information about its shoppers.
“On day zero, we know more about our client than many retailers could aspire to know about their clients over the entire course of their relationship with them,” Baer said. “We know their style preferences, we know their value orientation, and we can nail their fit as early as their very first transaction. And that’s an extremely powerful differentiator and asset that we have.”
He added that as the company works toward its transformation, it intends to take that unique knowledge of the customer and “embed that within everything that we do.”
Consumers want personalized retail experiences. For instance, the PYMNTS Intelligence report “Personalized Offers Are Powerful — but Too Often Off-Base,” which drew on responses from more than 2,500 U.S. consumers, found that 71% had received personalized offers and were interested in them and an additional 12% had not received personalized offers but were interested.
Plus, the types of high-value customers that Stitch Fix is courting are the most likely to want personalized experiences. The study found that 89% of consumers who earn more than $100,000 a year were interested in receiving such offers.
Lack of personalization, on the other hand, may contribute to customer dissatisfaction.
“As I surveyed the overall retail landscape for apparel and accessories, it’s clear the customer is just not satisfied with the current optionality that they have for their shopping,” Baer said during the call. “…The physical retail experience … remains extremely cumbersome. Online shopping remains extremely overwhelming.”
He asserted that the personal styling service removes these friction points and makes the digital shopping experience “fun and easy,” using both its stylists and its data-backed artificial intelligence and machine learning.
Yet contrary to Baer’s observations, PYMNTS Intelligence research found that consumers tend to be highly satisfied with their online clothing shopping experiences. The report “The Online Features Driving Consumers to Shop With Brands, Retailers or Marketplaces” found that 81% of consumers who purchased clothing or accessories from an online marketplace were very or extremely satisfied. Plus, 70% of those who made such a purchase from a brand’s website or mobile app said the same, as did 76% of consumers who did so from a retailer’s website or mobile app other than the brand’s site.
As the demand for personalized retail experiences continues to surge, particularly among high-value demographics, Stitch Fix could use its wealth of data to cultivate lasting loyalty.
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