{"id":195,"date":"2017-12-21T00:05:00","date_gmt":"2017-12-21T00:05:00","guid":{"rendered":"http:\/\/wordpress.dev\/?p=5553639"},"modified":"2017-12-21T00:05:00","modified_gmt":"2017-12-21T00:05:00","slug":"stitch-fixs-tv-advertising-push-attracted-new-customers-one-problem-they-want-cheaper-stuff","status":"publish","type":"post","link":"https:\/\/datalabortech.com\/index.php\/2017\/12\/21\/stitch-fixs-tv-advertising-push-attracted-new-customers-one-problem-they-want-cheaper-stuff\/","title":{"rendered":"Stitch Fix\u2019s TV advertising push attracted new customers. One problem: They want cheaper stuff."},"content":{"rendered":"

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So Stitch Fix is giving it to them.<\/p>\n

Online personal styling service Stitch Fix stepped up its advertising spending by 84 percent in the first quarter of its 2018 fiscal year, with TV campaigns playing a big role in trying to attract new customers.<\/p>\n

But the new customers attracted by the mass-market commercials had one common piece of feedback: Stitch Fix needs to offer a bigger selection of less-expensive clothing. CEO Katrina Lake told Recode<\/strong> in an interview following today\u2019s release of Q1 results \u2014 its first earnings report as a public company \u2014 that these consumers want more options in the $20 to $50 price range.<\/p>\n

So Stitch Fix plans to give these new customers more of what they want.<\/p>\n

\u201cIn the last year, lower price point product has grown to represent a double-digit percentage of our total unit sales,\u201d the company said in a letter to shareholders announcing the <\/strong>financial results. \u201cGiven the success of this offering, we plan to increase lower price point sales as a percentage of overall sales over the course of this fiscal year.\u201d<\/p>\n

In its first few years of existence, Stitch Fix\u2019s selection of clothing items skewed mid-tier \u2014 higher than the range mentioned above, but lower than those of premium brands. But in the past year, the company has started to sell name-brands at premium price points, in addition to beefing up the selection in the $20 to $50 range.<\/p>\n

On the company\u2019s earnings call with analysts, Lake was asked what the lower-price push would mean for profit margins. She did not offer specifics on the profitability makeup of the different price points, but said Stitch Fix \u201ccan serve very profitably\u201d these value shoppers.<\/p>\n

Average order values, on the other hand, would be lower for these customers, but would be largely offset by new sales of high-price premium brands, she said.<\/p>\n

For the quarter, Stitch Fix reported revenue earnings and profits that were generally in line with analyst estimates. First-quarter revenue grew 25 percent to $296 million year over year, while the company netted $13.5 million in net income.<\/p>\n

But Stitch Fix\u2019s stock was trading down as much as 12 percent in the after-hours market, perhaps over concerns that the company did not provide a forecast for net income.<\/p>\n

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