How Stitch Fix is Decreasing Their Churn Rate With Two Clever Apps

According to Forbes, eCommerce subscription market segments have been growing more than 100% yearly over the last five years and now account for a quarter of the online shopping market, generating billions of dollars’ worth of sales.

One of the biggest and most successful names in subscription services is Stitch Fix, who is said to be growing at a rate of over 20% year on year, reported $296 million in earnings last year. This is before the recent launch of two key apps; but we will get to that.

stitch fix fashion fix

In case you didn’t know, Stitch Fix is a subscription service that brings personal shoppers to the mass market. Founded by Katrina Lake in 2011, it is a blend of the top styling experts and clever algorithms, bringing high-quality apparel, styling advice and suggestions to people who don’t know what to wear – right to their front doors.

how does stitch fix work

Stitch Fix’s users grew by 31% from March 2017 to March 2018 and it currently has 2.5 million clients signed up for their service. However, as any online subscription seller will tell you, keeping subscribed users engaged and involved in your brand is vital to keeping your churn rate down and holding on to your users. Profits and sales are important, but hanging on to your customers and keeping them engaging (buying) long-term is the ultimate goal.   

So how did Stitch Fix tackle user retention? They recently developed and released two initiatives with the aim of decreasing their churn rate and keeping their customers actively shopping well after the first year of subscription.

Stitch Fix Extras

In February, Stitch Fix launched its new service, Extras. Extras allows shoppers to add extra products to their Fix cart that will be sent over and above the five-item style fix the site and stylists have picked out for users. These include intimate ‘necessary’ products such as underwear, bras, tights, and socks that range between $10-$60. Not only is this an awesome way of up-selling must-have products, but it provides an extra service to meet their users’ shopping needs by providing them with a chance to upgrade this part of their wardrobe as well. All in turn increasing activity and brand loyalty, and decreasing churn rate.

stitch fix extras

And the added extra – if you’ll excuse the pun: Extras not only allows shoppers to choose from all those top brands that suit all budget and style types, but also includes Stitch Fix’s own exclusive brand, Everyday. How better to keep your users engaged and shopping year on year than by creating an exclusive product range they can only buy on your site?

Stitch Fix Style Pass

stitch fix style pass

Stitch Fix traditionally costs users $20 per styling fix, i.e., it’s the cost of curating the shopper’s box and sending their personalized selection to them to try on and choose from. Style Pass, however, gives them the same access for a full year of unlimited fixes, for the one-off rate of $49. Why is this so clever? Up to this point, signed-up users would only pay per fix, which was resulting in inactivity. Now, with Style Pass, users can enjoy as many as they like in a year for one set price – which means more value for the shoppers and far more user activity.

Yes, they are getting the service for cheaper but as it’s one set price, they are far more likely to use their Fixes and be dependant on the site. Users feel like they getting a bargain, and Stitch Fix not only generates more likelihood of fashion sales from more fixes, but keeps their users more active and involved, thus decreasing their churn rate. Win-win!

In a nutshell, Stitch Fix knows their users, knows their goals and knows what it takes to keep shoppers loyal and engaged. And they have the business savviness, tech, and in-depth fashion niche market know-how to back it up. But the most important lesson we can learn is that there is a need for constant brand evolution – no matter how successful you already think you are – to ensure you hang onto your shoppers, users and segments.

Article was last updated on 05, 2018

Nicole Blanckenberg

Nicole is a content writer at StoreYa with over fifteen years experience and flair for story telling. She runs on a healthy dose of caffeine and enthusiasm. When she's not researching the next content trend or creating informative small business content, she's an avid beach goer and coffee shop junkie.

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