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Stitch Fix's (SFIX) Digital Ploys Augur Well for Client Wins

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Stitch Fix, Inc. SFIX looks well poised to cash in on the positive trends in the fashion space, thanks to its trendy digital actions. Being an online personal styling service retailer, the company strongly focuses on expanding its digital capabilities and personalized shopping to offer its clients the best-in-class service. Its efforts to boost client experience through Fix and direct buy (currently known as Freestyle) offerings are worth a mention. Let’s delve deeper.

Freestyle Steals the Show

Stitch Fix’s recently rolled-out Freestyle drive that offers quite a distinct shopping experience is believed to work wonders. This platform allows customers to discover and buy curated items according to their style, preferences, fit and size. Customers can buy items directly from Stitch Fix, irrespective of ordering a Fix first. The service offers an effective way to shop articles from a wider range of accessible categories.

The Freestyle service caters to customer style needs across casual, workwear, occasion, active, athleisure, loungewear, sleepwear and more. It boasts a variety of unique and new features including Trending for You, Complete Your Looks, Featured Brands and Shop by Department. This looks to offer brands like Free People, Universal Standard, Vince, Madewell, Mother, Rag & Bone, The North Face, Club Monaco and Girlfriend Collective. Management looks forward to introducing styles from brands like Adidas, Good American, Vans, Levis, DKNY and Champion.

More Strengths

Stitch Fix is steadily making concerted efforts to boost assortments as well as improve client experience. The company is expanding its assortments to include more affordable products across categories. Management is on track with a significant transformation of its business in several areas including the expansion of Shop to the existing client base, the launch and scale of Fix Preview, and investments in systems and people.

The company is constantly leveraging product innovation and evolving assortments, and using personalized experience to gain more clients. The expansion of personalized direct purchases for the clients is also impressive. Management is optimistic about Fix Preview, which offers an opportunity to view the proposed items for the company’s clients’ next Fix before its shipped.

Management rolled out Fix Preview for its entire women's and men's clients across the United States and the U.K. The company’s Plus offering as well as its kids and UK businesses is also yielding fruitful results.

All the aforementioned efforts have been fortifying the retailer’s active client base for a while now. Active clients rose 18% year over year to 4.2 million in fourth-quarter fiscal 2021. The company ended the second half of the fiscal year with about 300,000 total net additions. Net revenue per active client jumped nearly 4% year over year to $505. The company experienced positive trends in client engagement and retention with keep rates touching an all-time high.

Stitch Fix crossed revenues worth $2 billion, annually, in fiscal 2021 for the first time. Net revenues also grew 22.8% from the last fiscal year’s figure to $2.1 billion. For fiscal 2022, management projects net revenue growth of 15% or higher than the prior fiscal year’s reported figure.

Wrapping up, we expect Stitch Fix to be a gainer over the long haul given the strength in its digital initiatives, Freestyle in particular. Other renowned players doing well in the digital arena include Nordstrom JWN, Gap GPS and Abercrombie ANF.


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Abercrombie & Fitch Company (ANF) : Free Stock Analysis Report
 
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