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

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.

Go deeper

1 hour ago - Sports

Pac-12 will play football this fall, reversing course

A view of Levi's Stadium during the 2019 Pac-12 Championship football game. Photo: Alika Jenner/Getty Images

The Pac-12, which includes universities in Arizona, California, Colorado, Oregon, Utah and Washington state, will play football starting Nov. 6, reversing its earlier decision to postpone the season because of the coronavirus pandemic.

Why it matters: The conference's about-face follows a similar move by the Big Ten last week and comes as President Trump has publicly pressured sports to resume despite the ongoing pandemic. The Pac-12 will play a seven-game conference football season, according to ESPN.

Dave Lawler, author of World
2 hours ago - World

Global coronavirus vaccine initiative launches without U.S. or China

Data: Gavi, The Vaccine Alliance; Map: Naema Ahmed/Axios

A global initiative to ensure equitable distribution of coronavirus vaccines now includes most of the world — but not the U.S., China or Russia.

Why it matters: Assuming one or more vaccines ultimately gain approval, there will be a period of months or even years in which supply lags far behind global demand. The COVAX initiative is an attempt to ensure doses go where they're most needed, rather than simply to countries that can produce or buy them at scale.

Updated 3 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 6:15 p.m. EST: 32,062,182 — Total deaths: 979,701 — Total recoveries: 22,057,268Map.
  2. U.S.: Total confirmed cases as of 6:15 p.m EST: 6,967,103 — Total deaths: 202,558 — Total recoveries: 2,670,256 — Total tests: 97,459,742Map.
  3. Health: Cases are surging again in 22 states — New York will conduct its own review of coronavirus vaccine.
  4. Business: America is closing out its strongest quarter of economic growth.
  5. Technology: 2020 tech solutions may be sapping our resolve to beat the pandemic.
  6. Sports: Here's what college basketball will look like this season.
  7. Science: During COVID-19 shutdown, a common sparrow changed its song.

Get Axios AM in your inbox

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Subscription failed
Thank you for subscribing!