The pandemic has accelerated many consumer spending trends, and most of them involve ditching brick and mortar stores for online/e-commerce platforms. The clothing business is no exception. As consumers shun malls and stores in favor of shopping from home, clothing retailers are scrambling to find ways to keep them interested. Few have been as successful recently as Stitch Fix.
Stitch Fix is an online platform whose algorithms the company claims are very good at predicting what a customer will want to buy. Each customer has a personal "stylist" who picks potential options for the customer to consider, and then those clothes can be shipped and returned based on what the customer wants. It's a highly personalized shopping service, all conducted at home and online -- ideal for a pandemic.
Stitch Fix recently reported earnings, showing double-digit year over year revenue growth and its highest net additions of new clients in the company's history. That sent the stock soaring 42%. The question is, can the company's strength last?