National

The brick-and-mortar apparel market has experienced a mass customer exodus over the last two decades, and Credit Suisse predicts another 8,600 stores will shutter this year. Department stores have suffered the most, hit by nine retail bankruptcies in 2017 alone and accelerating declines in foot traffic. Despite this meltdown, shoppers are spending about the same amount. So where are those sales going?

One answer is Stitch Fix, the customized online shopping startup that went public earlier this month, raising $120 million to fund growth. The initial pricing valued the female-founded and -led company at roughly $1.4 billion, yet some have lumped it in with other e-commerce brands, like Blue Apron, whose post-IPO performance has been seen as underwhelming.

Considering Stitch Fix's revolutionary retail model and meteoric rise to $1 billion in annual revenue, these critical headlines miss several key considerations. Sure, as a company scales up in sales, its absolute growth rate declines. And yes, they have work to do in solidifying their marketing strategy. But retail trends are creating strong tailwinds for Stitch Fix.

Although Amazon's convenience has pushed up its market share, many people aspire to shop elsewhere for their wardrobes. Stitch Fix offers an inviting alternative to the modern department store, with a variety of brands that speak to a wide range of customers and recent expansions into maternity clothing and menswear.

Most important, Stitch Fix's customized service takes advantage of purchase drivers like community engagement, personalized attention and emotional connection, all of which increase consumer spending. Stitch Fix relies on a combination of algorithms and personal shoppers to narrow a customer's offering down to a few items from many thousands. This tailored experience far exceeds the capabilities of department stores — or even Amazon.

The bottom line: As customers, we are overwhelmed by choice and an endless stream of messages, promotions and advertisements. The outlook is bright for companies that free us from these frustrations.

Stitch Fix's opportunity has been underappreciated

Trends in the retail market have positioned the shopping start-up for success.

Stitch Fix founder and CEO Katrina Lake at the 2015 Bloomberg Technology Conference in San Francisco. Photo: David Paul Morris/Bloomberg via Getty Images

Business

Expert Voices

The brick-and-mortar apparel market has experienced a mass customer exodus over the last two decades, and Credit Suisse predicts another 8,600 stores will shutter this year. Department stores have suffered the most, hit by nine retail bankruptcies in 2017 alone and accelerating declines in foot traffic. Despite this meltdown, shoppers are spending about the same amount. So where are those sales going?One answer is Stitch Fix, the customized online shopping startup that went public earlier this month, raising $120 million to fund growth. The initial pricing valued the female-founded and -led company at roughly $1.4 billion, yet some have lumped it in with other e-commerce brands, like Blue Apron, whose post-IPO performance has been seen as underwhelming.Considering Stitch Fix&#x27;s revolutionary retail model and meteoric rise to $1 billion in annual revenue, these critical headlines miss several key considerations. Sure, as a company scales up in sales, its absolute growth rate declines. And yes, they have work to do in solidifying their marketing strategy. But retail trends are creating strong tailwinds for Stitch Fix.

Our expert voices conversation about the death of retail.

Much of discretionary spending is influenced by fun factors such as community-driven engagement, inspiring moments, memorable experiences, personalized attention, emotional connection, and more. The truth is there's little of this with Amazon, and this is where brands and retailers can have the most impact to win customers, especially millennials. Technology is enabling richer and more dynamic customer engagement across channels: stores, websites, mobile apps, social media; all of this stands to further connections with consumers and raises the importance of brand as a means to stand out in a vast ecosystem.

Also, with brands moving off the pages of magazines and beyond the boundaries of store walls, they're free to engage with consumers in real time through the context of content (think Instagram, Facebook, Snapchat, and blogs).

Bottom line: These trends most often direct transactions straight to brands and specialty retailers, and will only continue in popularity.

Mark A. Cohen, professor, Columbia Business School: Amazon is unstoppable

Stuart Appelbaum, president, retail workers union: Retail won't die, but it will change

Oscar Yuan, president, Ipsos Strategy3: Amazon spurns Gucci shows

Joseph B. Fuller, professor, Harvard Business School: People want to see each other face-to-face

Online shopping is no fun

Future

O<a class="gtmContentClick" data-vars-link-text="ur expert voices conversation about the death of retail." data-vars-click-url="http://rbl.ms/2rb3zoD" data-vars-content-id="6afa6859-6990-4a17-bba3-a557d104a174" data-vars-headline="Online shopping is no fun" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="http://rbl.ms/2rb3zoD" target="_blank">ur expert voices conversation about the death of retail.</a>Much of discretionary spending is influenced by fun factors such as community-driven engagement, inspiring moments, memorable experiences, personalized attention, emotional connection, and more. The truth is there&#x27;s little of this with Amazon, and this is where brands and retailers can have the most impact to win customers, especially millennials. Technology is enabling richer and more dynamic customer engagement across channels: stores, websites, mobile apps, social media; all of this stands to further connections with consumers and raises the importance of brand as a means to stand out in a vast ecosystem.Also, with brands moving off the pages of magazines and beyond the boundaries of store walls, they&#x27;re free to engage with consumers in real time through the context of content (think Instagram, Facebook, Snapchat, and blogs).Bottom line: These trends most often direct transactions straight to brands and specialty retailers, and will only continue in popularity.Other voices in the conversation:<ul><li>Mark A. Cohen, professor, Columbia Business School: <a class="gtmContentClick" data-vars-link-text="Amazon is unstoppable" data-vars-click-url="http://rbl.ms/2skbRPu" data-vars-content-id="6afa6859-6990-4a17-bba3-a557d104a174" data-vars-headline="Online shopping is no fun" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="http://rbl.ms/2skbRPu" target="_blank">Amazon is unstoppable</a></li><li>Stuart Appelbaum, president, retail workers union: <a class="gtmContentClick" data-vars-link-text="Retail won&#x27;t die, but it will change" data-vars-click-url="http://rbl.ms/2rb5J7K" data-vars-content-id="6afa6859-6990-4a17-bba3-a557d104a174" data-vars-headline="Online shopping is no fun" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="http://rbl.ms/2rb5J7K" target="_blank">Retail won&#x27;t die, but it will change</a></li><li>Oscar Yuan, president, Ipsos Strategy3: <a class="gtmContentClick" data-vars-link-text="Amazon spurns Gucci shows" data-vars-click-url="http://rbl.ms/2rGtg42" data-vars-content-id="6afa6859-6990-4a17-bba3-a557d104a174" data-vars-headline="Online shopping is no fun" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="http://rbl.ms/2rGtg42" target="_blank">Amazon spurns Gucci shows</a></li><li>Joseph B. Fuller, professor, Harvard Business School: <a class="gtmContentClick" data-vars-link-text="People want to see each other face-to-face" data-vars-click-url="http://rbl.ms/2s1uDuO" data-vars-content-id="6afa6859-6990-4a17-bba3-a557d104a174" data-vars-headline="Online shopping is no fun" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="http://rbl.ms/2s1uDuO" target="_blank">People want to see each other face-to-face</a></li></ul>

Kirsten Green (venture capitalist)

Stories

Stitch Fix's opportunity has been underappreciated

Online shopping is no fun