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Stitch Fix: Revolutionizing Personalization With Data Case Solution & Answer

Stitch Fix: Revolutionizing Personalization With Data Case Solution 

Introduction

In 2011, Stitch fix, the e-service for personal selling was founded in United States. Its motive is to deliver-innovative experience of shopping for both individuals and their family. The organization was founded by Katrina Lake and Erin Morrison Flynn was founded by founder of Stitch fix along with its co-organization founder. Organization’s main goal is to provide easier manner and convenience to its customers in terms of what they love. The workforce of Stich Fix contains around 4000 stylists including 3 million active users or clients. Stich fix has number of brands which includes Fair lane, Market Spruce and Hawker rye etc. To gather the attraction of active and potential clients, it provides delivery, exchange and return of clothing and other accessories of apparel are free. The clients have been saved from selection of clothes and their accessories.

Problem statement

When the Stitch fix was founded, Lake was interested at the time by how little the shopping experience had changed since the 1970s. She was interested by the prospect of a future in which the technology and sales industries were intertwined, believing that this would result in a transformative customer experience. Lake was a data nerd who believed that by combining data and analytics, consumers would be able to see retail and buying in new ways.In early 2020, the big concern was how Stitch Fix will retain its business edge because (Amazon) had newly joined the business with a parallel approach called Prime Wardrobe. Stitch fix was receiving complains from customers for high prices and low quality, the unsubscribing ratio was increasing.

External Analysis

Porter’s five forces

Threats of new entrants

  • A healthy capital and investment is required to enter in industry. This reduces the threats to enter in market unless product is highly differentiated.
  • If the distribution channel is restricted, new entrants will be discouraged to enter.
  • If the switching cost of customer is high, then this threat will become low.

Threats of substitute products

  • The cheaper product is available from other industry.
  • Substitute product provided better quality and service as compare to Stitch fix.
  • The switching cost to substitute products is low.

Rivalry among existing firms

  • It shows the challenge given by the competitors which can limit the growth of each other.
  • It can be decreased by satisfaction of customers on the differentiation basis.
  • The company can improve its relationship with customers raising the switching cost.

Bargaining power of suppliers

  • This force is strong when the switching cost from one supplier to other is high for buyers.
  • Developing long term relationship with suppliers will help the company to reduce this threat.
  • This threat can be reduced by finding the alternate ways of producing the product but it requires high expertise.

Bargaining power of buyers

  • Bargaining power of buyers can be enhanced by concentrated customer base strategy.
  • Bargaining power of buyers can be increased by customer’s high market knowledge and purchase of standardize product.
  • This threat can be reduced by diversifying customer base.
  • Diversification strategies require new products and new market segment………………..
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