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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

Biden confronts mounting humanitarian crisis at the border

Illustration: Eniola Odetunde/Axios. Photo: Pool/Getty Images     

Just over a month into his presidency, President Biden is staring down a mounting crisis at the border that could be just as bad as the ones faced by Barack Obama and Donald Trump, if not worse.

  • Why it matters: Immigration is an issue that can consume a presidency. It's intensely and poisonously partisan. It's complicated. And the lives and welfare of vulnerable children hang in the balance.

The backstory: Biden came into office sounding a warmer, more welcoming policy that would treat migrants humanely. Desperate people have taken notice.

  • And Biden reversed Trump’s COVID-era policy of turning away unaccompanied children — the very group that is now surging and being held for days in border stations unfit for children.

What's happening: Shelters are overflowing. Border crossings are rising. Border Patrol facilities are overwhelmed. And the new administration is taking fire from both the left and right as it grapples with the issue's harsh realities.

Erica Pandey, author of @Work
36 mins ago - Economy & Business

The rise of vaccine passports

Illustration: Annelise Capossela/Axios

Vaccine passports were touted early in the pandemic as an important piece of the plan to get people back to normal life. Now they’re becoming a reality.

Driving the news: CLEAR, the secure digital identity app that you see in airports around the world, and CommonPass, a health app that lets users securely access vaccination records and COVID test results, have joined forces.

"Vaccine tourism" stretches states' supplies

Illustration: Sarah Grillo/Axios

Americans who are highly motivated to get vaccinated are traveling across state lines after hearing about larger vaccine supplies or loopholes in sign-up systems.

Why it matters: "Vaccine tourism" raises ethical and legal questions, and could worsen the racial socioeconomic and racial inequalities of the pandemic.