STITCH FIX MONEYBALLING OF WOMEN FASHIONS GROUP 1

THE ORIGINS OF “STITCH FIX“ Katrina Lake began by parterning with Erin Morrison Flynn to launch a service called Rack Habit. Using simple Excel Spreadsheets, the two gathered the style preferences of their acquaintances in the Boston area, and then hit local area boutiques to find items to deliver to their customers. The service generated enough interest to convince the pari to move to San Fransisco and launch a real company in 2011 under the name of Stitch Fix. During her school days at Harvard Business School, Lake felt that male programers and engineers have brought technology only to male interest items like poker, leagues baseball, etc.. Since then she dreamed to do such for the female interest like fashions. 2 GROUP 1

MONEYBALLING OF WOMEN FASHIONS 3 The term "moneyballing of women's fashions" likely refers to applying the principles of data-driven decision- making, similar to the concept popularized in baseball by the book and film "Moneyball," to the fashion industry, particularly in the context of women's fashion. In "Moneyball," the focus is on using statistical analysis and data to identify undervalued or overlooked baseball players who can contribute significantly to a team's success. The idea is to make strategic decisions based on objective metrics rather than relying solely on traditional scouting and subjective judgments. GROUP 1

4 HOW “STITCH FIX” WORK? Unconventional Approach to Personalized Fashion - Stitch Fix's unconventional approach, Extensive online profiles, Exhibit 2, Data analytics, and touch of human stylists, Five curated items in a "fix.", Personal notes from stylists, 3-day decision window and return process. Initial Styling Fee - $20 styling fee upon sign-up, Fee deducted from the first purchase, Encouraged engagement and commitment, Attractive value proposition. "Subscription Model" - Monthly subscription shipments, On-demand option for flexibility, Aligning with customer preferences, Continuous engagement and recurring revenue "The Relevance Factor" - "No selling, only relevancy", Predicting customer preferences, High stakes for profitability, Impressive curation success, Client retention and loyalty "Broad Demographic Appeal" - Diverse customer base across the U.S., Serving customers from every corner, Meeting the needs of the middle market, Averaging $55 per item (vs. U.S. market average of $19) "In-House Labels" - Six in-house labels to enhance the assortment, Flexibility for stylistsSuccessful performance of private labels, Enhancing Stitch Fix's uniqueness "Customer Feedback" - Detailed style profiles, Impressive fit and service, Positive customer reviews, Enhanced shopping experience GROUP 1

3 - STEPS GROUP 1

“STITCH FIX Online Profile Sign Up Process” GROUP 1

7 THE DATA SCIENCE "Data-Driven Client Profiling at Stitch Fix", Client data collection, 50+ data points from style to personal context, Algorithm-powered recommendations, Client-stylist interaction and feedback Data Science at Work, Machine learning applied throughout the business, Client information exchange, Creation of a massive dataset, Tens of thousands of clothing items, data points per item, Role of 80 data scientists with diverse backgrounds, Generating algorithms for recommendation engine Continuous Improvement Through Data, Willing client information sharing, Data-driven recommendation vs. Netflix, Enhanced customer experience, Feedback loop through client interactions, Client returns and stylist notes, Contextual information for personalization, Machine learning applications in all aspects, The importance of social media profiles, especially visual context through Pinterest, The symbiotic relationship with clients GROUP 1

8 HUMAN TOUCH AT“STITCH FIX” Stitch Fix's unique approach to combining data science and human stylists. A commitment to providing flexible work arrangements and benefits for its stylists. How human stylists contribute to the company's success and customer relationships. The Role of Stylists - Stitch Fix employed 2800 stylists working remotely with flexible hours, Stylists played a creative role in personalizing clothing recommendations, The algorithm enhanced stylist-client interactions and improved over time. Stylist Metrics - Stylists were measured on various dimensions, including client spending, satisfaction, and retention, Speed and accuracy were vital for making quick and effective decisions, Internal surveys indicated high job satisfaction among Stitch Fix stylists. Human Touch - The human stylist was considered Stitch Fix's "secret sauce.", CEO Katrina Lake personally styled five boxes a week, highlighting the importance of the stylist-client relationship, Stitch Fix aimed to combine human and machine capabilities for the best results. Personalized Customer Relationships - Each client had a dedicated stylist, fostering unique and personal relationships, Examples of heartfelt interactions with clients, such as condolences for a tragic loss and a celebration of overcoming cancer, Stitch Fix employees genuinely cared about their clients' well-being. Conclusion - Stitch Fix's success lies in the synergy of data science and human stylists, The company's unique approach to customer care and personalized experiences, The human touch sets Stitch Fix apart in the world of fashion e-commerce. GROUP 1

THE COMPETITIVE SPACE Stitch Fix's rapid growth in the fashion industry and operating in a highly competitive market. U.S. apparel market overview, approximately $371 billion in total sales, Dominance of women's clothing, over 50% of revenue. Proliferation of fashion labels, hundreds of thousands, Variances in American household spending on apparel, e.g., Manhattan and Tucson. Various retail channels for fashion, including department stores, fast fashion retailers, and online stores, Differences in buying strategies, target consumers, and shopping behaviors. Growing importance of online sales, internet sales at 18% of clothing revenues in Impact of social media, particularly among younger adults, on the trend toward online clothing purchases, Stitch Fix's competition in the multi-purpose online retail space, including giants like Amazon, Crowded market for subscription boxes, competitors like Le Tote, Dia & Co., Gwynnie Bee, and Fabletics. Proliferation of subscription boxes for various products, Challenges of evaluating Stitch Fix's business model sustainability in this competitive landscape. Conclusion - Complexity of Stitch Fix's competitive environment, Need to navigate a rapidly changing market and adapt to evolving consumer preferences. 9 GROUP 1

THE CHALLENGE AHEAD 10 Stitch Fix's financial success by 2016 Valuation growth from $300 million to $730 million Operating multiple distribution centers and positive cash flow Expanding Business Horizons - Diversification efforts, including new product categories, Recent launch of Stitch Fix Men Industry Observations - Differing opinions among industry observers, History of fashion startups facing challenges, Question of demand sustainability Customer Acquisition and Churn - Shift from organic to paid customer acquisition, Concerns about subscription service customer churn, Scaling personalization for mass market Stitch Fix as a Retail Model - Recognition by analysts and Mary Meeker, Seen as a model for the future of retail, Setting a "new normal" in the industry Lake's Focus - CEO Katrina Lake's commitment to personalization, Challenge of product selection in a vast market, Solving this fundamental problem Conclusion - Stitch Fix's challenges and opportunities, Commitment to personalization and potential pioneer in retail industry GROUP 1

“WHAT MAKES “STITCH FIX” SUCCESSFUL?” GROUP 1

“SHOCKING NEWS” UPDATE “STITCH FIX” “SHOCKING NEWS” UPDATE “STITCH FIX” GROUP 1

“HOW ETHICAL IS STITCH FIX?” GROUP 1

“WHAT IS THE STITCH FIX INVESTIGATION? GROUP 1

What is “STITCH FIX” & Which direction it is leading ? DISCUSSION POINTS 1.To financially survive 2.To ensure contractors legally comply 3.To be tech savvy 4.To offer superior customer experience all the time 5.To be sustainable 6.To balance expansion 7.To adapt changing market needs 8.To be innovative and leading fashion trend GROUP 1

Thank You GROUP 1 One For All, All For One