The evolution of Stitch Fix: from a Harvard student's apartment to a $2 billion company

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• Stitch Fix combines the smart efficiency of data with the personal touch of clothing stylists to help millions of women, men, and kids shop for their closets.
• In the eight years since its launch, it has already gone public and crossed the $1 billion annual revenue mark.
• Learn more about how the service works and why it has been so successful in disrupting the online retail world below.
• Sign up for Stitch Fix here to receive your first personalized box of clothing.

In 2011, Katrina Lake was a student at Harvard Business School who had been inspired by her experience as a retail and restaurant consultant to create a personalized shopping experience driven by data. Out of her Cambridge apartment, she shipped boxes of clothing to friends who needed help shopping for their closets.

From a creative idea and small apartment emerged Stitch Fix, a retail disruptor that has since gone public, posted a net revenue of $1.2 billion in the 2018 fiscal year, and attracted an active client base of 3 million people.

The San Francisco-based online personal styling service is making headlines for its rapid ascent from fledgling startup to widely recognized industry contender. This is how Stitch Fix is commanding the attentions of anyone interested in shopping, tech, and their innovative union.

How Stitch Fix works

New users begin with a Style Profile questionnaire, where you hand over your personal measurements and sizes, preferred clothing fit and styles, budget, and freeform thoughts about what you want out of the Stitch Fix experience.

After being matched with one of Stitch Fix's more than 3,900 stylists, your Personal Stylist will handpick clothing, shoes, and accessories to fit your profile and ship five pieces to your door at a date of your choosing.

You have three days to try on the pieces and decide what you want to keep and send back. Each shipment includes Style Cards with recommendations of how to style the pieces.

Read more: I tried Stitch Fix, a popular personal styling service, and I loved it - here's how it works

You only pay for the items you decide to keep, while the rest go back into the prepaid envelope to ship back to Stitch Fix. There's a $20 styling fee for each "Fix," but it's automatically applied as credit toward any items you purchase. If you buy everything in your Fix, you receive a 25% discount off the entire order. After completing your order, you give your feedback online, which helps inform future Fixes.

Stitch Fix is not a membership or subscription service, so you're not locked into recurring fees or shipments. However, you do have the option to set up automatic deliveries, which can always be adjusted or stopped at any time.

The types of clothing you'll receive from Stitch Fix

Since it launched as a women's service, its Women's clothing collection is most robust, drawing from more than 250 up-and-coming, established, and in-house brands. In your Fix, you might find names like AYR, Citizens of Humanity, and Warp+Weft, as well as Stitch Fix-exclusive brands like 41 Hawthorn and Fairlane. It serves maternity, petite, and plus clients, carrying sizes 0-24W and XS-3X.

You can also add extras - basics like underwear, bras, and socks from brands like Free People and Wacoal - to your Fix in sizes XS-3X (44DDD is the largest bra size), for $10 to $60 per item.

For Men, a service that launched in 2016, the company offers more than 30 brands including Original Penguin, Scotch & Soda, and 7 For All Mankind in sizes XS-3XL. Extras, from some of our favorite brands including Mack Weldon, Stance, and Tommy John, come in sizes XS-3X and cost $12 to $36 per item.

Women's and Men's clothing items cost anywhere from $25 to $500 each. With Stitch Fix, you'll be able to find stylish options while staying within your budget, whether you need an affordable pair of shoes or want to splurge for a luxurious evening coat.

In 2018, Stitch Fix further expanded its services with kids clothing, available for ages 2 through 12 and sizes 2T-14. The kids' service differs slightly in that you receive eight to 12 items per Fix, with prices ranging from $10 to $35 per item.

Why Stitch Fix is so successful:

When nearly every part of the shopping experience - your personal characteristics, clothing characteristics, and post-Fix feedback - can be condensed into a data point, the company ends up with a lot of useful information that it can plug into an algorithm.

Stitch Fix's team of more than 100 data scientists, led by Eric Colson, the former VP of Data Science and Engineering at Netflix, is in charge of the predictive algorithms that keep users happy.

Through a combination of the user's Style Profile, historical interactions with the service (e.g. when and how often they schedule Fixes), merchandise data (e.g. color, length, price, brand), and recommendation algorithms, Stitch Fix can efficiently streamline a traditionally frustrating experience. Style Shuffle, a feature introduced in 2018 and available on the Stitch Fix iOS app and online, gamifies clothing preferences with a simple thumbs up or thumbs down rating system, and further improves understanding of the user. If this all sounds suspiciously artificial and robotic, the incorporation of human stylists is meant to retain the personal aspect of shopping.

While there's certainly a proportion of the population who revel in the winding, unpredictable journey of wandering into stores, trying on armfuls of clothing, and eventually stumbling upon The Dress (if they're lucky), there's also a significant chunk who hate shopping, don't have the time for it, or don't know what they want.

And as people get busier with their lives, that's why so many are drawn to Stitch Fix, which cuts out the logistical and mental work of shopping and lets you enjoy both its functional and creative purposes. You get clothes that fit properly and that you can afford, but you still get to show your personality through clothing and discover new favorite brands.

The free-range flexibility of the service is another factor that has users coming back. With no restrictive commitment to abide by, they can use Stitch Fix every month as a full-on replacement for traditional shopping, once in a while to refresh their wardrobe before specific events, or any reason in between.

Finally, by gradually expanding into newer categories like maternity and mids, the company can stay with a user throughout their life and serve the entire family. In its March 2019 Investor Presentation, it detailed the real user journey of a 37-year-old woman who was referred (both parties get $25 credit for referrals) to Stitch Fix in 2013 and has used it throughout the years for maternity clothing, back-to-work clothing, then kids clothing. Select, dedicated users can also take advantage of the Style Pass, a $49 one-time charge that gets them 12 months of free styling and is then credited to the next item purchased.

Read more: 8 startups that have grown with their millennial fan base by introducing baby and kids collections

The future of Stitch Fix and online shopping as we know it

In November 2017, with just $42 million in venture capital funding, Stitch Fix began trading publicly (NASDAQ: SFIX) and became the first woman-led tech company to go public in over a year. Lake is also the youngest female to launch an IPO.

Now, the company is valued at $2 billion, and based on its past success and future trajectory, it only has room to grow. Like fellow retail innovator Rent the Runway, Stitch Fix is shifting traditional conceptions and creating new definitions of shopping.

Get started with Stitch Fix here