Stitch Fix: AI-Powered Personalization Will Overcome Any Macro Challenges

Personalization is a tool that will help Stitch Fix retain and even gain market share amid any potential external headwinds like tariffs or a slowdown in consumers’ discretionary spending, executives said Tuesday (June 10) during the online personal styling service’s quarterly earning call.

The company has not yet seen an impact from tariffs and doesn’t expect to see one during the current quarter, but it is prepared to mitigate the impact if it does appear, they said.

Stitch Fix CEO Matt Baer said during the call that the company’s “value proposition resonates even in a challenging macro environment.”

“Clients come to Stitch Fix for the personalized styling, the convenience, the discovery of the items that they love, and it inherently offers additional value and protects our business from any pure price-comparison shopping,” Baer said.

“Further, the strong and enduring relationships that a client and stylist have really allows us to tailor the experience to each individual client and adjust to their budgets at any moment in time.”

Baer said this as Stitch Fix reported that during the quarter ended May 3, it saw an overall return to year-over-year revenue growth. The company recorded a year-over-year increase in net revenue of 0.7%, according to a Tuesday earnings release.

The company is focusing on delivering a “client-centric and personalized shopping experience” as it enters the growth phase of its transformation strategy, according to a presentation released Tuesday. This is the third and final phase of a strategy that has seen Stitch Fix work on the “rationalize” and “build” phases over the last two years.

The personalized shopping offered by Stitch Fix includes human stylists as well as an app that gets to know the customer via a style quiz, provides the customer with their “multilayered style persona,” and invites them to subscribe to packages of apparel and accessories selected by a stylist or to select items from its online shopping platform, the presentation said.

“We pride ourselves on sending every client a Fix as unique as they are,” Baer said during the call. “We do this by leveraging our team of expert stylists as well as our best-in-class AI and recommendation algorithms built from the billions of insights we’ve gathered on style and fit. This differentiation is key to us gaining market share.”