Stitch Fix Attributes 3 Million Active Customers to Data Science Investment

April Davis By April Davis | 13 Mar 2019

The online styling service has reported 25.1 percent YOY growth for Q2 FY2019, claiming its investment in category expansion, technology, marketing and above all, data science, is to thank for the growth.

Delivering $370.3 million in net revenue in Q2, while also growing its active client base to three million consumers by January 26, 2019, Stitch Fix has had a strong quarter.

In a letter to shareholders, the company said that continued investments in data science has had a large impact on the business’s bottom line and ability to attract and retain customers.

“One of our key strengths is our ability to use data science to match our inventory to millions of clients’ individualised preferences. As we continue to grow, we are focused on improving this matchmaking capability, as we believe it is a competitive advantage and fundamental to delivering compelling client experiences,” the company wrote.

Over the last three months, the business reportedly launched a new inventory optimisation algorithm, which ensures inventory is correctly allocated across Stitch Fix’s network.

“Historically, we optimised inventory allocation one client at a time based on which client was first in the Fix queue. Our new algorithm considers the preferences of a broader universe of clients in the queue as it determines what inventory should be made available to stylists as they style for each client. In doing so, it ensures our stylists have the right inventory to meet each client’s style preferences regardless of the client’s position in our styling queue,” the brand said.

According to Stitch Fix, early results suggest this algorithm has increased customer satisfaction levels, basket size and the average order value.

“We believe this will enable us to more effectively serve our growing client-base over time, while also driving efficiencies across styling, inventory management, and operations,” the company explained.

In its letter to shareholders, Stitch Fix also said that its international expansion strategy, which includes the introduction of personalisation capabilities to the UK market by the end of Q4, has also proven fruitful.

“We’ve received strong interest from brands to partner with us to create a compelling assortment for men and women in the U.K. We are also leveraging our existing data science capabilities to serve the unique preferences of our UK clients.”

Discussing the company’s strong results, CEO and Founder, Katrina Lake said in a statement that the company has posted “six consecutive quarters of over 20 percent growth” since becoming a public company.

Last month, the brand launched its first integrated brand marketing campaign, which the company hopes will help deliver results in Q3 by driving brand awareness and emotional engagement.

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