Retail is in the midst of a paradigm shift as consumers move online for everything from diapers to dresses. Plenty of traditional players are struggling or shutting down stores as a result of changing consumer habits. Payless ShoeSource filed for Chapter 11 bankruptcy protection and announced it was closing all 2,100 of its U.S. stores, while Gymboree is getting rid of 800 locations. A number of other retailers, including The Gap, have hinted that store closures are coming. The Washington Post has called it a “retail apocalypse,” with more than 15,000 store closures since 2017.1 Amid all this carnage, there is a new wave of retail beneficiaries, many of which we will explore in this chapter.
Clothing has become more affordable in many countries since the 1990s.
Source: Nathalie Remy, Eveline Speelman, and Steven Swartz, “Style That’s Sustainable: A New Fast-Fashion Formula,” McKinsey & Company, October 2016, https://www.mckinsey.com/business-functions/sustainability/our-insights/style-thats-sustainable-a-new-fast-fashion-formula.
Amazon, of course, continues to dominate web commerce, but select consumer brands have narrowed in on unique offerings to compete, and thrive. Stitch Fix (the “Netflix of Fashion”) and some of its competitors have used a different strategy to carve out market share in the world of fashion. In an industry that you’d think would require a healthy brick-and-mortar presence—after all, you can’t try on a JPEG of a pair of jeans, no matter how many different angles and zoom features you get—there are a healthy number of online fashion providers, including, among others, Nordstrom’s Trunk Club, Indochino, and fashion lender Rent the Runway, with creative business models. Each uses components of subscription to lock in loyalty and recurring revenue. While Trunk Club has struggled since its sale to Nordstrom in 2014, Stitch Fix has paved the way for what the next phase of fashion retail will look like. Rooted in personalization, founder Katrina Lake’s company has crafted a unique combination of highly curated fashion and data science to get women (and now men) what they want out of an outfit, without ever stepping foot in a store.
When it comes to aspiring entrepreneurs conjuring up ideas for innovative businesses, it seems they spike the founder water at Harvard Business School. Stitch Fix, created by Katrina Lake and Erin Morrison Flynn, has quickly become one of the most popular e-commerce quasi-subscription services in the United States—in fact, some suggest Stitch Fix may be the most innovative and cash-efficient e-commerce retailer in the modern digital era. The company has redefined what makes an apparel business work in today’s changing retail environment.
Stitch Fix began in 2012 by targeting fashion-conscious women who loved looking great but hated going anywhere to shop. New customers to the website fill out a form detailing their style preferences, clothing needs, and price points. Algorithms then churn out a set of potential choices, which one of the company’s stylists tailors to the individual customer before shipping five items direct, for a $20 fee. Anything a customer doesn’t want can be returned free of charge. Should a customer keep any of the items, the $20 styling fee is applied toward the purchase—and customers who keep all five items receive a 25 percent discount. The brands included in a customer “fix” vary, but typically include items from trendy names like Citizens of Humanity, Scotch & Soda, and Barbour.
While Stitch Fix shies away from calling itself a true subscription company, customers can opt for subsequent boxes to be delivered automatically at a frequency of their choice. The setup is a bit outside the norm for subscription business models, but the automated shipping option provides the company with smoother revenue patterns over time as more and more customers toggle the sub-commerce option. And, while exact subscription numbers are hazy, repeat business is a strong point; Stitch Fix says that of its 2.19 million active clients, 86 percent were repeat buyers in 2017.2
Stitch Fix is not the first company to try out a personal shopping service on the web; in 2009, Trunk Club sensed a demand for “assisted commerce,” and began offering curated apparel to men. The Chicago-based company sold to Nordstrom for $350 million in 2014—although Nordstrom has struggled to make Trunk Club a continued success as a result of a few important factors. Nordstrom expanded Trunk Club’s store presence, opening several brick-and-mortar “clubhouses” where customers could shop in person; however, performance fell short. As you might recall, Birchbox experienced similar struggles when it, too, got away from its D2C roots with physical stores in the U.S., later shutting down its Soho location to shave costs while simultaneously scrapping plans for more locations. Systems integration woes also limited Trunk Club’s progress post-merger. It finally fully integrated its distribution systems with Nordstrom’s nearly three years later, suggesting that synergies related to fulfillment and merchandising weren’t cohesive early on. Finally, Nordstrom’s pricing strategy isn’t customer-friendly. The upscale retailer has tried to cut costs at Trunk Club by adding a $25 fee to items shipped for home try-on, credited toward any purchases made, a service that used to be free. This company-first, customer-second strategy has ostensibly caused more cancellations and an increase in churn. Nordstrom co-president Erik Nordstrom acknowledged in 2016 that the company needed to be “more accurate” in responding to customer needs, later adding that Trunk Club had taken a $197 million write-down.3
The challenges at Trunk Club do serve as a cautionary tale, but Lake’s company has not only learned from those mistakes but shown no signs of slowing down. After a somewhat rocky start following its IPO in November 2017, the company’s stock price has nearly doubled on the back of more than 3 million active clients and an algorithmically driven styling process.4 Stitch Fix has consistently operated with positive EBITDA (earnings before interest, tax, depreciation, and amortization) numbers, gross profit in the 45 percent range, and an upward trend in revenue since inception. In 2019 alone, the company is on track to bring in nearly $1.6 billion in revenue, surpassing estimates for both Yelp and Zynga—and its own expectations.5 The company became the tenth largest online fashion retailer in the U.S. in 2018—all this with plenty of cash still on the balance sheet.
Katrina Lake was only thirty-four years old when she led Stitch Fix’s public offering, and was the only woman to lead a tech IPO that year. In March 2019, she received the “Pitch Prize”—named after Franklin “Pitch” Johnson, one of the first venture capitalists in Silicon Valley—in recognition of her many accomplishments as an entrepreneur and business leader. Lake follows an esteemed list of Pitch Prize honorees, including Reid Hoffman of Linked-In, Marissa Mayer of Google and Yahoo, and Ben Silbermann of Pinterest. But there’s another reason to admire Lake as a leader, beyond her business success.
In June 2017, Justin Caldbeck, the co-founder of VC firm Binary Capital, resigned after six women shared stories of his inappropriate sexual behavior. It then came to light that in 2013, when Caldbeck was at Lightspeed Venture Partners—an early investor in Stitch Fix—Lake complained to the firm that Caldbeck had sexually harassed her, and asked that he be removed from his observer role on the Stitch Fix board of directors. The firm did comply with her request, but continued to employ him, and asked Lake to sign a non-disparagement agreement—effectively forcing her to choose between speaking publicly about Caldbeck’s behavior, or securing critical early investment in her company. She signed the agreement.6
While the NDAs have ensured that both Lake and Lightspeed have kept mum on the issue, Lake has since spoken publicly—and rather heroically—about the treatment of women in the venture capital landscape. In an appearance on NPR’s podcast “How I Built This,” Guy Raz asked about the Lightspeed episode. Lake addressed the broader issue of overt sexualized treatment of female founders, pointing a finger directly at prominent venture capitalist Chris Sacca. As Lake described it, while Sacca was addressing an audience of thousands from a conference stage, he touted his unconventional style of working with entrepreneurs, where those seeking funding would not only visit his home (rather than an office), but chat in his hot tub, drink beer, and hang out. A pregnant Lake, sitting in the audience, was appalled by Sacca’s address. She said to Raz, “I was pregnant at the time. There was no way I was going to go to some guy’s home I’ve never met, let alone get in a bikini. Moreover, since I am pregnant, I can’t go in a hot tub or drink beer... I guess I’ll never be in his pipeline.”7
Several factors, beyond the strength of Katrina Lake’s leader-ship, contribute to the success of Stitch Fix’s strategy, which is almost anti-Amazon-like. Rather than a growth-at-all-costs mindset, Stitch Fix has focused on unit economics since the outset, operating with core capabilities such as data, personalization, and premium customer service to drive profits. The company also nailed business fundamentals, like product-market fit, as well as key aspects of its operations infrastructure such as fulfillment and customer service. Stitch Fix’s killer moat, however, is a combination of a subscription-style model and hyper-sophisticated data science. Like Netflix, the success of Stitch Fix’s unique play suggests that when it comes to clothing (rather than content), personalized shopping informed by a relentless focus on data trumps Amazon’s one-size-fits-all offering (Prime Wardrobe).
The driver of Stitch Fix’s data bus is Eric Colson, the company’s chief algorithms officer, and a former VP of data science and engineering at, you guessed it, Netflix, where he was largely responsible for building the streaming giant’s recommendation engine. At Stitch Fix, Colson has added areas like recommendations, human computation, resource management, inventory management, algorithmic fashion design, and others.
How serious is the company about data? Stitch Fix provides a full “Algorithms Tour” of “how data science is woven into the fabric of Stitch Fix” at every stage of a purchase, from assigning a customer to a warehouse or human stylist, to predicting items they will like, to managing inventory. If this kind of thing tickles your fancy, you can geek out here: https://algorithms-tour.stitchfix.com/.
For us normal folk, let me highlight a few pertinent examples of what’s going on internally. Broadly speaking, Stitch Fix learns about (and tracks) client preferences, both individually and as a whole. With client feedback on things like fit, brand preference, and purchase history, the company is able to constantly improve its understanding of customer-style patterns. Doing so makes subsequent modeling, and personalization, more accurate and effective.
The clothing items a customer will receive are initially chosen by algorithm scores and machine learning before they touch the hands of one of the company’s stylists. When a new customer signs up they fill out a “Style Profile” to describe their clothing preferences. But the company knows there can be a gap between stated and unstated preferences, and to complicate matters even further, it’s not always easy to describe a style in words. So, to address the obvious challenge of forming an accurate picture of someone’s personal style preferences, Stitch Fix uses machine learning to do things like pull photos of clothing that customers like (e.g., from Pinterest, Facebook, and Instagram), while simultaneously searching for visually similar items in stock. Algorithms then select a range of style options to present to the 3,000+ internal Stitch Fix expert stylists, who ultimately hand-select what fills a customer’s box. The human stylists are intelligently matched to each and every Stitch Fix customer. Knowing not every stylist will be a good fit for each new client, the company uses algorithms to determine which of the available stylists is best suited to each customer who has requested a shipment. Once there’s a match, and a curated assortment of items is finalized, the first Stitch Fix box is packed and shipped out.
It’s a complex process with many moving parts. And, as the company points out on the Algorithm Tour web page, the first shipment is just the beginning:
She opens the box, is hopefully delighted, keeps what she wants and sends back the rest, and then tells us what she thinks about each article of clothing. There is a symbiotic relationship between her and Stitch Fix, and she gives us very insightful feedback that we use not only to better serve her next time, but also to better serve other clients as well.
After that initial customer shipment, the company uses machine learning tools to anticipate client needs, model future demand (a key piece for buying future inventory), build inventory depletion models to manage what’s in stock, develop analytics to improve upon what stylists suggest to their client base, and more.
More than seventy-five data scientists employed by Stitch Fix have helped it become a technological pioneer in online fashion, and its robust execution has left Stitch Fix in a league of its own—although competition is certain to intensify from both upstarts and larger brands who smell profit in the pool.
As Stitch Fix was hitting its stride, Chris George, an e-commerce entrepreneur from Michigan, was approached by a friend, John Haji, with a business idea. Echoing one of Trunk Club’s core assumptions when the company got started in 2009, Haji believed that plenty of guys were style-conscious; they just didn’t like to shop. So he began to work out an idea to sell merchandise to fashion-minded men.
Initially, George was lukewarm to the idea, but as he dug into business trends he became captivated by the explosion of online subscription-box companies. Notwithstanding the early success of Trunk Club and Stitch Fix, it was primarily George’s research into trending men’s Google searches that piqued his interest in launching a business with Haji. The sheer number of Google searches for “men’s hairstyle” and “men’s fashion accessories” was the turning point, recalls George.8 The more he read about names like Birchbox (which hadn’t yet launched “Birchbox Man”), Harry’s, and Trunk Club, the more George—who told me in an interview that he shops from his basement—believed that Haji had spotted a real opportunity to target men looking to up their style game.9
With confidence in their business vision, Chris George, John Haji, and a third partner, Paul Chambers, launched Gentleman’s Box in November 2014. At first, they shipped only to the U.S., but soon expanded to Canada (after Ryan Kesler, a hockey player then with the NHL’s Vancouver Canucks, posted about GB on his Twitter account) and within a few months were shipping to Mexico, the United Kingdom, Australia, and New Zealand. Some five years later, the Royal Oak, Michigan–based company has amassed tens of thousands of subscribers in over thirty-five countries, who receive curated boxes of stylish accessories like socks, ties, and cuff links. Gentleman’s Box runs on fuel from its Instagram influencers, fans on Facebook, and quality affiliate traffic from sites like mysubscriptionaddiction.com.
Perhaps the most important milestone in the company’s short lifespan was landing a deal with GQ magazine in their first year. Despite not yet having a subscriber base, the partners promised they could get GQ 1,000 subscribers in six months (an admittedly arbitrary number, recalls George).10 Today, subscribers to Gentleman’s Box automatically receive a GQ subscription as part of signing up.
Gentleman’s Box has kept a rather low profile, ensuring its existing customers are happy before prioritizing new-customer acquisition. This heavy focus on retention has proven to be a driver of continuous profit from loyal customers. Whether someone is attempting to cancel as a result of price point, or because of what George calls “product fatigue,” GB’s live agents do what they can to satisfy each subscriber and keep them on board.
While Gentleman’s Box shares obvious similarities with Dollar Shave Club—most notably, the business model and target market—George believes that what distinguishes his company from Michael Dubin’s is George’s continuous drive toward profitable growth, an approach to scaling up that involves a more prudent stewarding of the business, rather than chasing runaway growth. When asked about the Unilever acquisition of the razor start-up, George points to DSC’s lack of profitability at the time of sale, and says parties that show an interest in acquiring Gentleman’s Box (the company’s ultimate goal is to sell) must show an appreciation for the same profit-first mindset of its founders.
A lesson in the perils of growth without solid fundamentals can be found in the story of Fabletics, a brand fronted by co-founder Kate Hudson, which kicked off in 2013 selling subscription boxes of fitness apparel for women (and later men). The company was conceived by Adam Goldenberg and Don Ressler, co-CEOs of owner JustFab Inc., the parent company to both JustFab and ShoeDazzle.
Fabletics has done a decent job competing with the Lululemons of the fashion world, but it has also drawn its fair share of criticism from both consumers and watchdog groups. The company has faced numerous complaints from customers claiming the monthly subscriptions are too hard to cancel. In general, high complaint counts related to subscriptions suggest a broader and more systemic customer service problem.
When Shawn Gold was asked to join JustFab Inc. as CMO in 2016, he did some digging on the company’s reputation and described what he found in a Medium post:
I Googled JustFab Inc. and its brands: ShoeDazzle, FabKids, JustFab and Fabletics. What I found was a little disheartening: on page one of the results, some news reports were focusing on [disgruntled customers], highlighting over 1000 customer complaints to the Better Business Bureau. The company had settled a 2013 investigation with the county of Santa Clara, California for $1.8 million, and several stories insinuated that JustFab’s customers were being tricked into becoming members. The implication was that the company was, to put it bluntly, sleazy and dishonest.11
Some of those stories went beyond “insinuating”: the now-defunct Gawker once called JustFab “the biggest scam in online fashion,” and an investigative piece in 2015 found over 1,400 Better Business Bureau complaints and 234 Federal Trade Commission complaints about Just Fab.12 While on the surface the optics don’t look good, to be fair, things weren’t as bad as they seemed. The number of complaints represent only a small percentage of the total number of Fabletics’s customers.
The more important question is: What to make of the $1.8 million Santa Clara settlement? The settlement arose from claims that the company used misleading tactics, resulting in customers who thought they were making a one-off purchase being signed up for subscription services that would automatically bill their credit card each month unless they declined that shipment within the first five days.
The issue boils down to a Columbia House–like communication problem of disclosure, and a subpar customer service operation. Fabletics is just one example of a company experiencing a problem common to subscription players who don’t prioritize these pillars of customer service. As a rule of thumb, it’s safe to assume the average customer doesn’t read detailed terms and conditions, so Fabletics and others suffering from spiking complaints and cancellations can cool the fire simply by making billing plans, return policies, and cancellation terms clear and conspicuous. In other words, the yoga pants don’t need to be transparent, but the terms of service do.
Since 2016, the Fabletics team has stabilized complaint levels through 24/ 7 service and customer-enabled cancellations via the web—a smart move to cede control from the company and place it back in the hands of the consumer. However, expect the athleisure subscription company’s future to be very unsettled as plenty of other subscription options, from Lululemon, SweatStyle, Sweaty Betty, Ellie, Adidas, and Under Armour, place additional pressure on Hudson and co.
As things get competitive in the world of activewear in a box, Rent the Runway, yet another subscription business launched by Harvard grads, is doing something different. Founded in 2009 by Jennifer Hyman and Jennifer Fleiss, RTR (as the kids call it) rents out clothes, handbags, jewelry, and accessories to subscribers. The company is known to be a pioneer in the space, the first to sell the idea of renting a wardrobe vs. buying one. The business model has garnered significant investor attention, with RTR having raised over $500 million in funding thus far. Moreover, the company has served 9 million customers to date, complementing its recent valuation of approximately $1 billion.
When Rent the Runway first launched, it offered formal dresses that women could rent for weddings and other events. As the company expanded, so did its product suite, with nearly three-quarters of its 9 million clients now able to rent work attire, casual wear, and more. For $99 a month, its “unlimited” plan allows subscribers to rent four items at a time, from over 450 brands, either through the website or at recently opened storefront locations in New York City, Washington, D.C., Chicago, San Francisco, and Los Angeles. The price includes cleaning and insurance for minor damages.
And cleaning is taken very seriously. In fact, the company’s dry-cleaning warehouse—160,000 square feet—is the world’s biggest, and processes over 2,000 items per hour. The art of dry cleaning is key to the company’s continued success, as clothes must be cleaned and shipped as fast as possible to make the logistics work. If a piece of clothing has been worn but isn’t stained, it goes into a washing machine selected to extend its lifespan. But if it comes back with visible spots, it goes to a “spotter,” a stain-removal technician who draws on expert knowledge of fibres, materials, and chemicals to determine how best to treat it. It’s such an important role that, Hyman has said, “the hardest position to recruit has not been engineers, it has been spotters.”13 In fact, Rent the Runway offers a program to employees who want to learn spotting as a trade, which is one of the most lucrative roles in the warehouse, at roughly $30 an hour. (The program takes almost two years to complete, if you’re thinking about a career change!)
The specialized behind-the-scenes operations support the many benefits of renting clothes, such as a rotating wardrobe, access to trendy upscale designer items, a smarter and smaller closet—and, perhaps most important, a reduced environmental footprint. With disposable fashion now on environmentalists’ radar, innovators like RTR are making their mission more about sustainability than tackling high-priced designer blouses.
New Pantone colors, new styles, and new trends—not to mention the human desire to consume—all contribute to sustainability issues surrounding the industry; fast-fashion brands like Zara, H&M, and others bear some responsibility for enabling a wasteful cycle whereby consumers are perpetually buying new clothes and tossing out what’s no longer “on trend.” Cotton, which accounts for about 30 percent of all textile fibre consumption, is usually grown using a lot of water, pesticides, and fertilizer. Since the countries with the largest fabric- and apparel-making industries rely mainly on fossil fuels for energy production, making one kilogram of fabric generates an average of twenty-three kilograms of greenhouse gases.14
With sustainability as a goal, Hyman, RTR’s co-founder and chief executive, once claimed she wanted to put Zara and H&M, the giants of discount disposable fashion retail, out of business. That’s a tall order. But what does seem plausible is Hyman and company leading the next wave of conscious consumers who choose to buy the idea of renting style versus owning it.
With the fast-fashion industry generating massive carbon emissions, chemical runoff, and landfill gluts, other companies, like Gwynnie Bee and Le Tote, are popping up and helping to change the culture of consumption.
Gwynnie Bee, founded by its current CEO Christine Hunsicker, rents women’s fashion to the plus-sized market. Originally run out of Hunsicker’s New York City apartment, Gwynnie Bee now operates from offices in the U.S. and India, with roughly 350 employees helping ship millions of boxes annually to its growing customer base. The company’s new division, Caastle—the name references “clothing as a service”—is now providing a full-suite-logistics back-end, including cleaning, returns, packing, shipping, and more, for legacy retailers such as Ann Taylor and New York & Company.15
Then there’s Le Tote. The San Francisco–based company, founded in 2012, has garnered significant traction and staying power. Le Tote follows the same rental model as RTR (though with a purchase option), and includes a line of maternity wear. Subscribers can opt to receive a monthly curated “tote” or shop the thousands of items on the site, which include brands like Nike, Free People Movement, Kenneth Cole, French Connection, and Kate Spade. Monthly plans cost $79 ($89 for maternity), and customers can buy the items they want to keep—at a noticeable discount to mainstream retail.
As North American consumers become increasingly concerned with sustainability, and as global demand for clothing increases over the coming decade as millions of people in developing countries enter the middle class and spend more on apparel, rental options look poised to expand even further.
As the world of fashion innovates around broad themes like subscription, sustainability, and rental, let’s acknowledge the elephant in the room. Where does Amazon fit into all this, and how are brands like Stitch Fix and Rent the Runway faring with one of the world’s largest companies as a competitor?
Prime Wardrobe is Amazon’s not-so-loud answer to the increasingly popular personalized shopping service trend that Stitch Fix and others have brought to the forefront. After a beta launch in 2017, accessible by invitation only, Amazon rolled out Prime Wardrobe to the broader market in June 2018. The service allows Prime members to order items like shoes, clothing, or accessories for no up-front charge, and decide within a week what to keep and what to return. Amazon’s hassle-free logistics are quick and painless for customers, and items on offer include brands outside its private label line such as Under Armour, Adidas, Kate Spade, Tommy Hilfiger, Levi’s, and others. Shipping is free, of course, and customers are only charged for the items they keep—a plus for the budget-conscious shopper who resents e-tailers charging at checkout before items get to the doorstep.
There are, however, key differences between Amazon’s model and that of Stitch Fix and the broader lot of innovators. First, Prime Wardrobe is a do-it-yourself offering targeted at the everyday online shopper. Unlike Stitch Fix and Trunk Club, for example, Prime Wardrobe has no personal stylists on hand helping to eliminate choice fatigue; instead, members fill their own box with their own choices.
Second, Amazon Wardrobe removes more purchase friction than a traditional e-commerce apparel experience, since customers aren’t being charged initially—which makes it easier to justify shopping for the clothes one does in fact end up purchasing. And kudos to Bezos for helping to limit buyer’s remorse with a flexible seven-day “try before you buy” policy. Yet even this core value proposition doesn’t seem to be enough of a differentiator for Amazon long-term.
Flexible return policies are now table stakes for most omni-channel retailers. And, while online shoppers disagree on the acceptable timing of a credit card charge—for example, at time of sale vs. a week later—it’s not clear whether the Prime Wardrobe option provides a compelling alternative to an apparel e-tailer with a liberal thirty-day return policy.
Amazon isn’t trying to put a pin in the rental wardrobe balloon just yet, so Rent the Runway and Gwynnie Bee are safe for now. But it’s hard to see how Prime Wardrobe might take reasonable market share from Stitch Fix, Trunk Club, and Le Tote, who make their mark with personalized curation—an ostensibly no-choice model driven by stylists who do the work for customers who crave ultimate convenience—freedom from browsing and choosing.
Stitch Fix has established this noticeable competitive advantage over not only Prime Wardrobe, but other apparel retailers attempting to compete. While subscription is a driver for just about any clothing retailer wanting to capture customer loyalty, fashion is highly personal—and therefore not an easy business model to execute. In the fall of 2018, roughly a year after Gap Inc. launched its initial subscription box, babyGap Outfit Box, the retailer stopped the program. During its fourteen-month pilot in baby clothes, Gap had also introduced a pajama box and an outfit box for kids with its Old Navy brand, neither of which is active now.
The Gap’s attempted foray into subscription apparel provides some key lessons on why fashion brands fail in sub-commerce. First, category fit. Although apparel can work for subscription, it’s not as predictable as other categories that feature consistent consume-and-replenish cycles—like personal care or beauty. Second, since (as mentioned) fashion is personal, the importance of curation, selection, and data science makes it difficult for most legacy brick-and-mortar retailers to merchandise effectively, minimize returns, and compete with companies that rely heavily on superior data to scale successfully (i.e., Stitch Fix, Rent the Runway, Le Tote). In other words, your typical Gap women’s apparel buyer doesn’t necessarily make a good e-subscription merchandiser. Third, the competition. When Walmart signaled that it was moving aggressively into kids’ subscription boxes, with already established successes in direct-to-customer beauty, grooming, and baby boxes, Gap had its work cut out for it. Last, The Gap lacked some key capabilities. Rather than attempt to build out its business line with a strategic partner (as Walmart has done with Brandshare, which manages and executes just about every step in the box process), it opted to try and do so in-house. Yikes.
Contrast The Gap’s shortcomings with what makes Stitch Fix tick: direct-to-customer savvy driven by personalization, curation, data, and brand awareness, all of which work in concert to attract its niche group of shoppers, who want high fashion, month after month, without hassle. And, as each monthly box is shipped, its receiver’s evolving style profile means Stitch Fix, through the power of its algorithms, gets even better at what it does.
While Stitch Fix, Rent the Runway, Le Tote, and others in their category stand to not only survive but thrive in the face of Amazon’s fashion play, legacy retailers catering to the mass market—Amazon’s actual target—will see more of their market share erode.