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Hi, I'm Kevin Coupe and this is FaceTime with the Content Guy.
There was a story in the New York Times this week that grabbed my attention - it was about a company called StitchFix, a clothing service that generates more than three quarters of a billion dollars a year by not giving its shoppers much choice in the clothes that are shipped to the homes.
Not much choice. But as it happens, a lot of say.
When you sign up for StitchFix, you fill out a form that details your preferences, needs and desired price points. Then, they apparently have some 3,400 stylists, most of them part-time, who choose items that they think the customer would like. Five items (blouses, pants, skirts, even jewelry) are shipped in a box, and the customer can keep any or all of them - and if they keep everything, they get a 25% discount on the total price. What they don't want they send back. And the company learns a little more about the customer, which it incorporates into the next shipment.
If it seems I know a little more about this than you'd think I would, it is because StitchFix boxes have been showing up on my doorstep for the past couple of months - my 22-year-old daughter loves it. She got my wife to do it. And now my 27-year-old son, apparently looking to up his sartorial game, is going to try the men's version. It is worth noting that all their purchases will replace trips that would have been to traditional stores.
It is a very interesting business model - but it isn't really about fashion. It really is about data.
What StitchFix is doing is accumulating enormous amounts of objective and subjective data about its customers, and then is acting on that data to serve the customer. But it isn't just sending people the same old stuff ... it nudges them a bit in new directions, with styles and colors that are close to what's been chosen before, but with just a little more something to them.
This is really smart, because if you can nudge a customer into having a wider fashion palate, and have the data to get them to make purchases they might not have made before, that's the definition of successful retailing.
StitchFix is focusing on fashion, but there's no reason that other kinds of retail - including food - cannot do the same. If you are keeping track of what a customer buys, and then can interact with them in a meaningful and relevant way, you might be able to get them to try a new fruit, a new meat, a new cheese.
Sadly, not enough retailers do this. Sure, they track purchases with so-called loyalty programs, but they don't do nearly enough to turn that data into enduring and meaningful shopper relationships. They send coupons, and maybe offer a discount on gas. But beyond that, very little.
If I were a retailer, I'd look at the StitchFix model, and then talk to millennials about it. I'd find out what the appeal is, and try to then define what the opportunity is to my segment of retail. And then I'd try to make it work for me.
Of course, there's always the other option - doing things the way we've always done them.
Your choice.
That's what's on my mind this morning, and as always, I want to hear what is on your mind.
- KC's View:
