Workers trading business casual for business comfort, Stitch Fix CEO says

When the pandemic hit and millions of people shifted from working at an office to working from home, Stitch Fix, the online personal styling service, knew it had to keep up with rapidly changing fashion trends and customers’ needs.

“We definitely had to change the inventory and make changes of things we had bought and that were already in our warehouses,” said CEO Elizabeth Spaulding, who stepped into the role in August.

Stitch Fix, founded in 2011 by former CEO Katrina Lake, began as a subscription-only service for women’s apparel: Clients tell the company what they like and it sends them five items, what it calls the Fix. Spaulding said the data collected from those Fixes helped it move faster than the competition when it saw a big jump in requests for “comfort and cozy.”

“Marketplace” host Kai Ryssdal spoke with Spaulding about what it was like taking over a company during a pandemic, as well as style trends for 2022. The following is an edited transcript of their.

Kai Ryssdal: What’s it like to take over a company in the middle of a pandemic?

Elizabeth Spaulding: Well, it certainly wasn’t what I was expecting. You know, first of all, I had been at the same place for the first 20 years of my career. So it was already a pretty big change and really exciting to be joining a company that I really deeply believe is the future of how we will all shop and how we’ll find what we love. You know, consumers started shopping very differently, very rapidly. And what COVID did was it allowed us to start to bring even more value to that experience for each of our clients. But I certainly wasn’t expecting things to change and move so rapidly when I took on the new role.

Ryssdal: Well, so not to make this all about me, but I’m a pretty good case study, right? Because I was a Stitch Fix shopper for a while, and then the pandemic hit and I didn’t need nice clothes anymore. I didn’t even need, like, business casual clothes. You know, none of us did, right? And, oh, by the way, I would be — and I don’t know you from Adam — but you probably were not dressing up to go to work in front of your Zoom every day, right? You’re wearing, at least on the bottom, sweatpants and slippers. What do you do with that when you run a company like Stitch Fix?

Spaulding: You know, I think one thing that we were fortunate with Stitch Fix was we weren’t just nice going-out clothes. We definitely had to change the inventory and make changes of things we had bought and that were already in our warehouses. But a huge benefit was we saw that signal — with each Fix we send, we get very specific input. And so, we saw a 10x increase right away in work-from-home requests. We saw requests for just comfort and cozy. That allowed us to actually move probably faster than many people because we saw that signal so rapidly. Yeah, I definitely was wearing sweatpants and leggings. I think I have more leggings in my wardrobe than I ever thought I would.

Ryssdal: Right, now look — I hear you. You mentioned it a couple of times now, the information you have, the signals you got, the data you have. Would you be offended if I called Stitch Fix — for all that you do for fashion — you guys are kind of a data company, yes?

Spaulding: You know, it’s a great point that you bring up. And I think we’re incredibly proud of how data-driven we are, and it’s really the marriage of the art and the science. Here’s a fun data point, just to the point of data: We have a widget in the app called style shuffle. Clients essentially thumb up and thumb down items in our catalog or even things we maybe used to have but don’t have anymore, but it gives us a great sense of what they love. We have over 10 billion of those data points. Over a million clients play that every month. Within two days of any new item entering our product catalog, we test it in there. We know who’s likely to really love that item. And so yeah, we really are a data company combined with, I like to think, a very deep relationship company because of our stylists.

Ryssdal: All right, so look, what’s hot for 2022? Any hints?

Spaulding: Well, you know, not surprisingly, everyone’s saying there’s a great reshuffle in talent. There’s also a great refresh in clothing. We hear about two-thirds of our consumers saying they’re ready to swap out clothes, maybe replace a whole third of their wardrobe. People are just into comfort and style. We talk a lot about business comfort.

Ryssdal: Sorry, business comfort?

Spaulding: I think people — to your point on everybody wearing sweatpants during COVID — people got used to being a little more comfortable, and now they want to look good, but they still want to be comfortable. I don’t know what you’re wearing right now Kai, but hopefully it’s a polo, not a button-down. We’re hearing polos are trending right now with our clients.

Ryssdal: That’s so funny. So, it’s khakis and a T-shirt.

Spaulding: Well, tees and graphic tees are definitely on the rise as well.

Ryssdal: Oh, that’s good, because it actually happens to be a graphic T-shirt. So look, now where do you go? We are at this — we all hope — reopening phase. Consumer tastes have shifted. You have shifted your company in a lot of ways. What are you looking at for 2022? Not fashion-wise, but business-wise?

Spaulding: A big focus of our last year and a half has been helping clients not just experience what we’ve always called the Fix. That’s our classic model where you tell us some information, then we send you five items at a time. We’ve moved into what we like to think of as our on-demand era, in addition to that Fix, where you can, you know, open up our app and shop your own personalized store at any time. And so really, our future is about being this destination that, you know, helps you get dressed every day, makes it more about the discovery and fun of shopping versus all the hard work, which we think is still the problem with traditional e- commerce and one that we’re just really excited to solve.

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