Marketing Plan

Running head: STEREOTYPING 1












Stitch Fix Marketing Plan

Courtney Clarke-Myers, Stephanie Dechant, April Ornelas, Rujita Munankarmi

Friends University

BSAD 516, Group Project, Week 8

December 16, 2015

Stitch Fix Marketing Plan

Executive Summary

As Stitch Fix, we have come up with a 5-year plan describing how we will achieve our marketing objectives. Stitch Fix has been in the online subscriptions industry for two years now and the progress has been encouraging. Our target is college graduates and young career women who despite their busy schedules are still looking classy and fashionable. The online shopping experience we give our clients is fully personalized to meet the needs of each and every client. Despite performing admirably in the first two years of our existence, our market share is still considerably low. We intend to gain a market share of 40% within five years and we have come up with a marketing plan to help us achieve our market objectives. Our main marketing objective as Stitch Fix is to provide our customers with quality products and accessories at affordable prices. This is achievable and it will enable us grow considerably and as such increase our market share. Our operation model will also undergo an audit so that all shipping and delivery transactions will be streamlined. Reduced operational costs will enable us to comfortably offer our products at prices lower than those offered by our competitors. Diversification into men’s clothing and plus size fashions will also expand our market and increase the company’s operations of scale. The reason the marketing plan is appropriate at this time is because of the gradual increase of players in the online subscriptions industry. With more players, it is important to re-evaluate our business operations so we can identify a niche in the market. As such we can employ analyzed differentiation and positioning strategies to help occupy and establish ourselves in the specific niche market.

Situation Analysis


Market Summary

The primary target customer of Stich Fix are college graduate, careered women in their 20’s to 40’s located all over America. The secondary target are the women who are not necessarily career focused but are willing to dress fashionably as well as ladies who are not fashion savvy but would like to dress trendy. The target geographical area for StichFix is all over United States. By utilizing internet as a platform and home delivery service, Stich Fix can serve domestic customers of all race and ethnicity throughout the country.

Stich Fix has different tiers of brand and design combination so customers are in control of their own expenditure. This allows flexibility to reach customers of various income range. The median income of targeted customers are over $40,000 per annum.

The focus of Stich Fix is entirely customer centric. Any online clothing store can provide branded clothes but Stich Fix is not just about clothes, it is about personalized experiences customers are going to receive. The customer provides the information about what their preferences are in regards to color, materials, design, style, sizes, and the frequency of the delivery. That information is used to design the clothes that are specific to that particular customers’ choices and are delivered to their door as often as they would desire.

The customer can then keep the clothes and accessories they like and return the ones they do not and are only charged for the ones they keep. The data is also collected from the returned clothes and customer feedback to better customize the experience for the next delivery.

Stich Fix’s market consists of consumers who value service along with the quality products. Stitch Fix is going to provide convenience to the customers with wide range of clothes selection as well as various accessories. The target customer are busy careered women who does not want to or have time to go shopping and is happy to get new things delivered, so the member gets what she wants, major brands and great styles, without the effort.

Stitch Fix does not have the physical space which allows us to save money on overhead. This also allows members get the same stuff for no more than what they’d pay in the store. As popularity about the store increases we expect to introduce and expand our target customer to males as well.

Market Demographics

Geographically, our target demographic is nationwide, however, we anticipate our strongest markets to be in large metropolitan areas on both coasts. Additionally, utilizing the expansive leverage of the internet as the driving resource of our company allows us to remove geography as a limitation.


· Women

· Career

· College education

· Busy mothers

· Fashion & trendy focused

· Age 20-40, 67.7% of women ages 20-24 participate in the labor force, 73.8% of women ages 25-34, and 74.1% of women ages 35-44. 74.2% of women who participate in the labor force are full-time employees.

· Median earnings of women with a bachelor’s degree is $965 weekly, creating a median yearly income of $50,180. Median earnings of women with an advanced degree is $1,185 weekly, equaling a median yearly income of $61,620. 31% of the female population has a bachelor’s degree or higher.

· 41.2% of employees in professional and business service careers are women. 53.2% of employees in the financial industry are women. And 74.6% of employees in educational and health services are women. These are all careers that we think would benefit from a fashionable, but professional wardrobe that we can help accommodate.

· About 31,000 women in our target demographic in the labor force.


SWOT Analysis

The following SWOT analysis outlines the key strengths and weaknesses within Stitch Fix and describes the opportunities and threats facing the company.


· Personal stylists for convenient shopping

· Up-to-date trends

· Purchase and returns provide instant feedack

· Discount when purchasing all items provide customer incentive

· Pieces are selected within customer’s budget, increasing probability of purchase

· Style tips are sent with each shipment to provide suggestions for those who aren’t fashion savvy


· Little to no advertising, mostly word of mouth and social media

· Little incentive for customers to provide feedback

· No membership or subscription fees, that could be potential lost revenue

· Unique shipments could create inefficient operations

· No specific price point under the $50-$100 range

· No plus size options


· Expand to include plus sizes and a men’s line

· Offer a $20-$50 price point

· Introductory discounts for new customers

S/O Based Strategies

· Grow collaboration with more brand lines

· Use trends and style profile to group customers for more efficient labor in stylist payroll

W/O Based Strategies

· Create TV marketing campaigns/advertisements

· Offer a Facebook “coupon” or discount

· Provide 10% off next purchase for feedback on each shipment

· Provide a $20-$50 price point to be more inclusive

· Add plus size and men’s line


· Future/potential competition with multiple lines

· A continued slump that would impact discretionary spending, or customers would find less expensive options

S/T Based Strategies Offer option to rent for a more affordable price point, but include damage insurance to add back to revenue.

W/T Based Strategies

Address consumer concerns that would lend them to look elsewhere, such as price point or brand lines, divisional areas (such as men’s clothing).


Are you a busy business woman with little time for shopping in retail stores for clothing? What if a stylist mailed you five pieces of clothing, specifically chosen for you, buy only what you like and mail the remaining items back straight from the convenience of your own home? Would it be worth it? Let’s try the newest fashion in a box crave, Stitch Fix.

“Stitch Fix is an online subscription and personal shopping service” (Wikipedia). This fashion in a box company was founded in February 1, 2011 by Katrina Lake. The San Francisco based company has gained popularity as a personal shopper for busy working moms and career oriented women. The company’s average customer is between the ages of 25 and 40.

The business model behind Stitch Fix is equal parts technology and retail and has largely grown by word of mouth from women who love the service. Using a combination of personal data, and algorithms, Lake’s goal is to take the work and anguish caused by shopping by attempting to send you merchandise that Stitch Fix’s stylists have determined will fit your size and style preferences.

As a new customer you will complete an online survey regarding your style preference give access to your social media outlets plus upload a full body picture. Stitch Fix has figured out one common goal among women is that not every woman has the same body type. Stitch Fix will then send individually picked clothing and accessories items for a one-time styling fee.

Stitch Fix sources its clothing and accessories from more than 200 brands, six of which are exclusive to the company. The average price point is $55, however with all the up and coming fashion in the box companies Stitch Fix has restructured our pricing structure. We are now offering three different pricing tiers for our customers to choose from, a men’s clothing line, plus offering an extended return policy of 5 days, during our customer surveys, we found the return policy was important to our clients. We have reviewed all our competition and want to always be the up and coming fashionista so we have accommodated their needs based off of some benchmarking techniques we have found; Five Four Club; Trunk Club; Her Fashion Box; Fashion Stork; refinery 29; Divine Caroline; Light in the Box and Gwynnie Bee.

We have reviewed all our competition and want to always be the upcoming fashionista so we have accommodated their needs based on some of benchmarking techniques we have found; Five Four Club; Trunk Club; Her Fashion Box; Fashion Stork; refinery 29; Divine Caroline; Light in the Box and Gwynnie Bee. Each of the subscription-based companies has its unique operations model. The Five Four Club is a monthly men’s clothing subscription service based in Canada. It offers free shipping for all orders and first time customers get their products at 50% discounts. The Trunk Club offers a variety of brands for both men and women and offers a 10-day return policy in case the customer decides against purchasing all goods in the trunk. Her Fashion Box on the other hand is a subscription box service from Australia that ships internationally to Canada and The United Kingdom. It has a wider range of products which includes fashion and accessory items, fitness products, and health and wellness samples. The Fashion Stork is a fashion club for men where guys can spend a fixed amount on new clothes every month. Light in The Box is unique in that it ships from China to countries throughout the world. Its discounted items are all women’s clothing. Gwynnie Bee’s subscription service targets plus-sized women. It caters for women who wear sizes 10-32 and also offers an option to rent clothes. Divine Caroline is an online subscription service that offers women’s clothing and fashion accessories including wedding rings. Refinery29 also targets women covering a variety of products such as shopping and beauty to wellness and celebrities, and giving tips and tricks for beautiful life.

Product Offering

The customer schedules a date to receive their items, which is referred to as a “Fix.” Once the shipment is received, the customer has five days to either keep the items or return them. If they keep an item, the initial styling fee applies towards the cost of the item. In addition to the styling fee being credited, if you decide to keep all five items, you will receive 25% off the total cost of the items. You can choose the time between shipments such as two weeks, once a month or every two months. You can also create a board on Pinterest where you can add photos of fashion looks that you like. Once you have created your board you can copy the link and add it to your style preferences where your stylist can view your photos. (

We work with over 250 of the best up-and-coming labels and brands, the kinds featured in magazines and on stylish celebs. For example, your shipment might feature clothing by Collective Concepts, Kut From The Kloth, Daniel Rainn, RD Style, Citizens for Humanity, or Gorjana. Part of the fun of Stitch Fix is that we will introduce you to new brands that bring diversity and freshness to your wardrobe!

Clothing is algorithmically selected based, in part, on a 10-minute style questionnaire that customers fill out. Because of the types of clothing that we carry (style-specific tops, dresses, etc.) a lot of our inventory is dry-clean or hand-wash only. If you prefer to receive machine washable items, please indicate this preference in your Style Profile. We will always do our best to honor your request, but we can’t guarantee that we will always have easy care items available that match your individual style and size preferences.


Keys to Success:

The keys to success are understanding the customers profile and to build a lifetime customer value. We want customers to come back and to tell their friends.

Since all of the shopping is handpicked by personal stylist, Stich Fix will need to make sure they are conducting regular follow up with their customers. Stich Fix will rely heavily on customer feedback to make sure they understand exactly what the customer needs.

If Stitch Fix can make each customer realize the value and convenience of having a personal shopper, they will be able to become a lucrative company.


Critical Issues:

· Stitch Fix must be good at communicating visually with customers

· Packaging

· Always have new and trendy fashions available

· Make sure each customer feels as though they are receiving a personal shopping experience

· Stitch Fix must know their customers and know what they want

Marketing Strategy


StichFix’s mission is to be the most convenient clothing shop. We provide you with the best personalized apparel and jewelry that matches your style, budget and lifestyle. We guarantee to exceed your expectation with our products and services.


Marketing Objectives:

Achieve 10% growth each this financial year

Acquire 5,000 new online customers by the end of third quarters.

Increase active customers purchasing at least once a quarter to 50,000 in a market.



Matching an affordable price with corresponding quality is a tricky balance. Basically because of perception, most people believe that if a product is expensive it is a quality product while a cheaper product relates to low quality. We aim to prove this wrong by streamlining our operations model so that we can offer affordable prices for quality brands. As such, we have restructured our pricing structure. We are now offering three different pricing tiers for our customers to choose from. Our pricing now caters for people across all economic classes. With most subscription services, the products are usually quite expensive. Such companies charge more so they can cover costs. With our streamlined operations in terms of shipments to customers all over the world, we can afford to charge lower prices for premium brands. The positioning of Stitch Fix in our customers’ minds is classy and fashionable women’s clothing at an affordable price.


Offering quality products at affordable prices is what we aim to achieve as Stitch Fix. To do so, we need to reduce our business operational costs. A factor that has to be considered is the way we handle shipments. When there are fewer transactions, the cost per transaction is higher. The only solution is if we would be able to increase the size of our shipments. Larger shipments at a time would significantly reduce our shipping overheads and help us offer our products at more affordable prices.

Allowing customers to rent out clothes for specific duration is also a perfect strategy. This would significantly increase our cash inflows while at the same time offering a great alternative for customers. A product at or store could actually fetch a price way more than its recommended retail price solely through multiple rent-outs.

Setting up real-time shopping quotes is also a strategy that would work wonders for Stitch Fix. A real-time shipping quote would enable customers to pay exactly what you would pay to ship the package. Using a real-time calculator can win us a lot of trust with our customers. It shows that the company is not inflating your quoted shipping fees or raising your item prices to cover the charges.

Marketing Program:

Stich Fix will rely heavily on social media to generate awareness to the product. By using platforms such as Facebook, Instagram and Twitter, Stich Fix will be able to create a social media buzz to create customer awareness and build new customers.

Stitch Fix will launch the #stitchfix regram program where customers can upload photos of themselves in Stitch Fix outfit, and have a chance at being “featured” on the Stitch Fix site. The pictures posted must be loaded by using #stitchfix regram and the photo must be a Stitch Fix outfit product.

This program will help generate the social media buzz and create awareness to the product. It will be measured by Facebook analytics.

Marketing Research:

Stitch Fix is headquartered in San Francisco, CA. Stitch Fix is dedicated to the personalization and is made up of a team of retail executives and advisors who are able to combine technology and fashion to provide the best shopping experience imaginable.


Financial Forecast

Stitch Fix as represented in the sales forecast are conservative, and we believe we will continue to see a steady increase in sales as we ramp up our advertising initiatives, as the budget allows.

  Sales Forecast  
Consumer Type 2015 2016 2017
Career Women $3.7 Million $3.9 Million $4.55 Million
Stay-at-home Moms $1.1 Million $1.3 Million $1.35 Million
Total Revenue $4.8 Million $5.2 Million $5.9 Million
  Marketing Expense Budget  
  2015 2016 2017
Website $100,000 $150,000 $200,000
TV $500,000 $600,000 $750,000
Facebook $250,000 $350,000 $400,000
Total Marketing Expense $850,000 $1,100,000 $1,350,000
Percent of Sales 17.7% 21.2% 22.9%
Contribution Margin $3.95 Million $4.1 Million $4.55 Million
Contribution Margin/ Sales 82.3 % 78.8 % 77.1%




Marketing Organization

Monthly sales targets have been set for Stitch Fix. Actual sales will then be compared with these targets and marketing programs modified to reflect the plans set out in the marketing plan. The speed of the roll-out program will increase or decrease, depending on Stitch Fix’s performance in the online subscription market.

Contingency Planning

There is nothing such as a fool proof marketing plan and a lot of things can possibly go wrong. The marketing strategies can backfire and not result in any additional sales revenue. To control the situation in this case, the best option would be to revert to pre-disaster marketing strategies. This would be wise since the previous marketing strategies are tried and proven. The firm’s marketing department would be responsible for execution of the contingency plan. Over the past year, we have had problems with our store’s tenant. Incase of any major that would result in us leaving the premises, we have a plan in hand. The contingency plan in this case is to use our manager’s basement as our temporary store. Our manager’s residence is just a block away from the storage facilities and it would serve as a temporary base as we look up a larger. With our dream to expand our target population, a move to a larger storage facility is inevitable and various alternatives are already being considered.

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