It is a pertinent time for retailers to assess, amend and innovate within their business models, ensuring that the customer is at the forefront of every commercial decision. To explore just that, Berwick Partners was delighted to be joined by Simon Leesley, UK Managing Director of Stitch Fix, on Wednesday 4th March for our Retail Leadership dinner at 1 Lombard Street.
Founded in America in 2011, Stitch Fix is a personal styling retailer that has gone from a fledgling start-up to a public listing in 2017, achieving a valuation of $2billion dollars. It has set new consumer standards for convenience and personalisation across the industry.
The evening brought together CEOs and Managing Directors from a broad range of retailers. Discussions were challenging and insightful, allowing individuals to share their own perspectives and learn from others. A number of topics came to light during the evening, including:
The real meaning of personalisation
The very purpose of Stitch Fix is rooted in personalisation. Simon explained that at its core, personalisation is about delivering a ‘unique experience’ to each customer that is tailored to their preferences, needs and lifestyles. People in the UK have the same challenges as the US; they are more time-starved and often prioritise other hobbies or commitments above shopping. When done well, personalisation is a way for retailers to help their customers achieve that ‘unique experience’ by ‘cutting through the noise’. This is perhaps even more important in the UK, given that online penetration is close to being double that of the US.
Marrying the human touch and AI
There was a concern that if data, artificial intelligence and algorithms start to be the driving forces in how retailers engage with customers, the theatre of true retailing could be lost. In discussing this, Simon took the conversation back to customer preferences and explained that it is very much about marrying artificial intelligence with the human touch; adding to the existing value of retail, not taking away from it.
One of the key strengths of Stitch Fix is that, whilst algorithms drive the business, there is a heavy human touch before any product reaches a customer; a human stylist curates the final product selection, striving to make a real connection with a customer. This is something that resonated with all the leaders in the room, irrespective of the product category that their business operates within.
Collaborative working – the power of partnerships
During the evening, Simon stressed that retailers should not fear businesses like Stitch Fix. Equally, retailers should not see them as the competition, but, rather, as an opportunity to shift to a more collaborative way of engaging with consumers. There were many examples of how Stitch Fix takes a partnership approach when working with brands and retailers; providing as much data as possible so that products can be changed, trends can be capitalised on and the customer voice can truly be heard and listened to in ‘real time’. Ultimately, cracking today’s retail conundrum as an industry force rather than a singular entity.
Data Science needs a seat at the table
One of the key points discussed was the need for clear differentiation between business insight and data science. The two are very different functions within a business; however, many retailers still confuse the two, missing a wealth of commercial opportunity that data science can unearth.
During the evening, Simon urged retailers to seek talented data scientists from outside of the sector. He warned that to attract such talent, retailers must ensure that the role on offer is compelling, provides significant autonomy and has limited restrictions in place in order to allow for real commercial benefits. This also ensures that a data scientist’s curiosity will be piqued, thus yielding the most valuable results.
The industry is facing a number of unprecedented challenges and we are seeing experienced leaders and established businesses having to find new ways to respond and evolve. Getting the right mix of data and the human experience can reap huge benefits, but only if businesses are willing to test and trial new business models, products and channels to truly understand what it is that their consumers really want.
For more information on anything we have disucssed in this blog, please contact Kathryn Gill. Kathryn is a Consultant within the Retail and Leisure Practice. With a UK-wide remit, she specialises in senior appointments across commercial, marketing, buying & merchandising, operations and general management roles.