Stitch Fix Strategy Canvas and Case Study: Katrina Lake has a lifelong love of clothing and she found online shopping becoming extremely time consuming. She was also confused because the categories in these stores were overwhelming (huge selection and lack of trying on ability). Because Netflix leveraged technology to establish an advantage over industry leaders like Blockbuster, this made Lake think about how technology could be leveraged to change an uninterrupted retail industry. She wanted to create an excellent experience for customers, an experience that outshined typical brick and mortar and other ecommerce retailers. She was ultimately inspired by her sister, a personal shopper in NYC. She decided to combine the advantages of online retail stores with the ultimate tailored experience of personal shoppers. Lake joined a fruit and vegetable “omakase” subscription which also really inspired her to create the surprise box concept.

Lake realized how important technology would be to make this dream happen. She initiated surveys and questionnaires mainly focused on customer style preferences and profiles, ultimately recording this data. After the customers select the options to set up automatic delivery, Sitch Fix then ships the package which contains five pieces of clothing to customers while charging a $20 stylist fee for the package (called fix). When customers receive the package, they do not know the contents of the package until it is opened which can be quite exciting. They pay for what they want and return what they do not want. The stylist fee can also be used as credit towards clothes they do pick out and a 25% discount is also given for customers who decide to keep all five items. These are the incentives that help encourage customers to keep all of the items

Evaluation of Stitch Fix and other competitors, across all the key competing factors to create a strategy canvas.

Using the ERRC framework, we see that Stitch Fix created surprise factors and personalized stylish services that other competitors did not offer. They eliminated consumer problems in the shopping experience such as privacy concerns as well as frustrations caused by an overwhelming selection.They also raised consumer satisfaction by allowing the trying on factor to happen as well as give customers a surprised feeling when they open their box. Stitch fix raised factors like convenience, technology, recommendation systems, AI, customer service and direct engagement on their social media platforms to respond to active users in order to gain competitive advantage over competitors. They also reduced the importance of advertising, low price and high inventory turnover in comparison to their online and brick and mortar retailers. They ultimately created an uncontested marketplace using both data and styling, leading to increased conversions and higher retention with algorithmic recommendations and the try on before purchase process.

Data and analytics  that create sustainable competitive advantage

After customers fill out their personal profile, artificial intelligence and stylists can automatically learn what their preferences and tastes are based on data points and can anticipate which styles they’ll be more likely to purchase. This is analyzed through ALP and trained artificial neural networks. The customers are given options of five pieces of clothing based on their personal tastes. Shipment requests analysis also helps select the closest warehouse location and inventory management which saves a lot of time and cost. They gathered detailed data based on customer preferences and created accurate algorithms. They also request customer feedback which also helps improve the process even more. This allowed Stitch fix to gain a great competitor edge of its competitors and these numerous amounts of data will ultimately help them succeed.

Adding Amazon Prime to the Strategy Canvas

Amazon’s personal shopper offers a cheaper price, a large category and selection of different brands, as well as free and easy return in comparison to Stitch fix. However, because Stitch Fix is the original company in the market running for almost a decade, the precision of recommendations based on years of collected data as well as amazing reputation stays their main advantage. They have more accurate AI algorithms and a better customer connection