Stitch Fix to stylists: ‘Take ownership of the disappointment, no matter the role the data played’

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Stitch Fix, which 10 years ago launched as a data-enabled styling service selling clothes by the box, touts its AI to investors, but doesn’t seem eager to speak of it to customers.

About three weeks ago, the apparel e-retailer told its stylists to refrain from invoking its technology when dealing with customers who say their preferences are being ignored, according to internal communications obtained by Retail Dive.

Now, not only do they not want us to mention an algorithm, they want us to own the choices it makes,” one stylist, speaking on the condition of anonymity, said by email.

In an internal message sent to stylists in mid-April, the company said in part: “Data science and Stylists have always worked hand-in-hand… When that partnership doesn’t result in the best client experience, Stylists should take ownership of the disappointment, no matter the role the data played.”

Additionally, stylists were instructed not to use internal terms “unknown to clients such as ‘AGP’ or ‘algorithm’ or explain our algorithmic technology in their notes to a client.”


“Data science and Stylists have always worked hand-in-hand… When that partnership doesn’t result in the best client experience, Stylists should take ownership of the disappointment, no matter the role the data played.”

Stitch Fix

Internal memo to stylists


According to Stitch Fix stylists interviewed for this story, the company previously did instruct them to let displeased customers know that its algorithm is always learning, and doesn’t always get it right.

As with the text on its customer-facing retail site — where it says it employs “real people who really get your style,” referring to the nearly 4,000 stylists who curate its boxes — the new directive stands in contrast to how the company emphasizes data science in investor materials like its annual reportcomments to analysts during earnings and communications with business reporters.

In an emailed statement for this story, Stitch Fix said that its “combination of human touch and data science is unique in the industry; We were the first retailer to hire a team of world-class data scientists to enable personal styling at scale and today we are still the only retailer that employs 1000s of style experts to build and maintain trusted, one to one relationships with clients and help us Deliver a completely differentiated, entirely personalized shopping experience.”

Wall Street vs Main Street

Given Wall Street’s affection for tech stocks, it stands to reason that Stitch Fix would promote itself to investors as a data-rich disruptor of retail.

Wall Street looks favorably on firms with a technology play, and tends to cut them more slack than it does traditional retailers,” GlobalData Managing Director Neil Saunders said by email. “In some cases part of the rationale is that technology gives companies a strategic advantage, and also that it could be resold or licensed to other firms creating an additional stream of revenue. For some, like Ocado or Amazon, this plays out and it is quite legitimate to see those players as technology-first retailers.”

The apparel box business, practiced by Stitch Fix and a few other companies, is predicated on a marriage between data and the human touch. The company gathers information like preferences, size and budget via style quizzes, and bolsters that with clues from purchases and returns, but enlists people to ultimately fill the boxes.

Speaking at the Milken Institute Global Conference last week, Stitch Fix CEO Elizabeth Spaulding described the setup much the same way that founder and former chief executive Katrina Lake always did.

“From the very beginning, I think one of the differentiators of our model has been really, really embracing human-in-the-loop machine learning,” she said during a panel on Retail’s New Reality: Technology, Innovation, and Consumer Behavior. “If you think about why the whole styling model works — and every quarter on record, we’ve improved our keep rate, which is how many items people keep in this box of products sight unseen — is where we’re leveraging the power of data science, feedback from our stylists, feedback from our client community.”


“I think one of the differentiators of our model has been really, really embracing human-in-the-loop machine learning.”

Elizabeth Spaulding

CEO, Stitch Fix


But the model’s track record has been bumpy, leading Stitch Fix to introduce the ability to shop directly from its site, and forgo the boxes, in order to stoke sales. In the months since that move, the box business has suffered more than executives had anticipated.

Stitch Fix’s tech advantage is “less convincing” than at other retailers, according to Saunders.

“While it is creative with technology, it isn’t a pioneer and what it has done with algorithms and AI still has a lot to prove,” he said. “This is likely one of the reasons Stitch Fix is ​​keen to downplay any issues with their technology even though there are clearly some problems.”

Stitch Fix appears to have fallen from grace on Wall Street. At press time, its share price is hovering around $10, down from nearly $100 just over a year ago.

A preview of the problem

The company didn’t address Retail Dive’s questions about its new directive to stylists, which is centered around “Fix Preview.”

That option, introduced last year, is an email sent before a “Fix” is shipped that allows subscribers — those who participate in its decade-old box business, as opposed to its much newer e-commerce site — to choose or reject suggestions for items that could go into their box. The added step has contributed to higher retention rates, Spaulding told analysts in March, according to an earnings call transcript from Seeking Alpha.

The preview can be a win for customers as well because there’s a greater chance they’ll keep something from their box. If they do, they can use the $20 styling fee toward the purchase; if they keep all five items they also get 25% off the entire cost.

Fix Preview has also introduced new potential pain points, however, according to stylists who spoke on condition of anonymity to protect their jobs. Stitch Fix’s pitch to customers is curating apparel that fits them well, and meets their preferences. When clients are miffed by the preview suggestions, they tend to assume that their stylists are ignoring their communications and disregarding their preferences or needs, the stylists said. It can be especially irritating when All 10 potential options are accessories like bags or ties, or the same garment in various colors, they said.

It’s the company’s tech that is usually responsible for poor selections like that, according to stylists. Successful tech-generated suggestions also raise other questions, they said.

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