Consumers today don’t behave like they used to, at least not when it comes to brand loyalty. A 2017 study by McKinsey found only 13 percent of consumers said they were a brand loyalist. Why is that number so low? One retail executive summed it up like this: “In the digital world, your consumers can’t help but shop around.”
If consumers are rethinking brand loyalty, brands must, too. Today, to attract returning shoppers, brands need to double down on the things that modern consumers value. Stitch Fix and Huckberry are two highly successful—and interesting—eCommerce ventures in the retail clothing space tackling the customer loyalty slump head on.
Stitch Fix, a personal stylist subscription-box service, reported a revenue of $1.2 billion and boasted three million customers in the 2018 fiscal year. Huckberry, a lifestyle website that curates products for outdoorsy men, went from $10,000 to $1,000,000 in one year as a bootstrapped company.
How did Stitch Fix and Huckberry break into the crowded retail clothing world and find such monumental success? They’ve both embraced new approaches to engendering customer loyalty including leveraging consumer data, strategic use of content, and building authority and trust.
Stitch Fix uses customer data to provide a personalized experience
The eCommerce shopping experience can feel less personal than going into a store; rather than having a salesperson helping you, you are at the mercy of search terms and filters. Stitch Fix solved that problem by putting together personalized fashion choices calibrated exactly to your tastes and delivering them to your door.
Their formula to get those choices right is a “best of both worlds” mix of human decisions and automation.
The company has invested heavily in data science to help it streamline and scale the process of predicting what customers will want. New customers take a quiz that asks them to rate different clothing items on how likely they would be to wear the outfits, and details their personal preferences, such as wearing skirts more than dresses. Then, before the boxes go out, a stylist checks every style box before it ships, to make sure the picks really are perfect for the customer.
The Stitch Fix iOS app asks customers to rate outfits every day, and 75 percent of them have done so. This gives the company a continual stream of data from customers about what they do and don’t like, refining and improving the algorithm. Customers also provide feedback about their style boxes by choosing to keep or return each item.
“All [this was] guess work in the past, and now you can use computer science to actually solve them and find relationships, and implement things to leverage that knowledge that you just unearthed,” says Eric Colson, Chief Algorithms Officer at Stitch Fix. “You’ll find a heavy weighting towards algorithms at Stitch Fix … and the reason for that is that insights are very important to keep the company informed.”
Stitch Fix’s commitment to personalization is a key to growing customer loyalty in this era. More than 50 percent of Gen Z and Millennials rate personalization as a feature of the brands to which they are most loyal. (PDF) And Forrester rates data-based personalization and ease of service as two of the key points in their 2019 Q2 report on loyalty. (PDF)
Where Stitch Fix differentiates themselves from other clothing sites is that they have successfully taken a white-glove brick and mortar service—personal shopping—and made it affordable to all. They were able to find success scaling a once human-centric amenity by gathering and smartly using data—and using that data to return real value to customers.
Huckberry uses content to build trust and authority with its customers
In order to build loyalty to a company, modern customers need to feel the business understands them. According to a Wunderman study, “56 percent [of consumers] said they feel more loyal to brands who ‘get me’ and show a deep understanding of their priorities and preferences.”
Huckberry accomplishes that by positioning itself as more than just a retail store—through strategic use of content and imagery, it’s a lifestyle hub and an authoritative voice in the outdoor product space.
Gallup reports that consumers aren’t looking to marketing slogans or TV spots to decide whether or not they are aligned with a brand, instead, they’re looking at experiences they have with the brand. Huckberry puts a focus on not only showing their products, but using photos and content to help a customer envision the experience they’ll have with that product.
Here they don’t just show a picture of a jacket, they show someone wearing that jacket, standing by their cool retro car, about to go on a coastal hike.
Huckberry has also made a notable investment in original content their customers will enjoy, including stories about craftspeople, interviews, and guides to events, food and drink. Huckberry’s commitment to content can make their site a destination for their target customer—even if, for now, that person is just looking to read and not shop.
The demonstration of real-world uses for products and the quality of content on the site both drive toward the same goal: Establishing Huckberry as an authority on the outdoor, adventure, independent lifestyle. Huckberry knows customers today are less likely to be brand loyal because they can shop around, and to them, that’s an asset. They curate the best of what’s out there, and, because they’ve used content to establish themselves as a credible, authoritative voice, customers can also trust they’ve aggregated all of the top possible products. Now, instead of shopping around at different websites, customers feel confident to go to Huckberry to do their “shopping around.”
Another asset of good content? It can lead to a visceral emotional connection that may ultimately lead to customers spending more, according to a Motista report. Apparel brands that create this all-important emotional connection with buyers can expect to see shoppers spend 2.5x as much over the course of their customer lifetime.
What Huckberry does right comes down to how they’ve innovated the presentation of value to their customers beyond simply selling clothing. More than a discount code or free shipping, they are ultimately positioning their brand as a voice customers trust and turn to when they want to find something cool to do, something exciting to read, or something new to learn.
Know your customers inside and out
Stitch Fix and Huckberry enjoy loyal customers because they know their buyers incredibly well. While they each use their knowledge in different ways, every eCommerce company can learn some key tactics from these brands.
►Ask customers about themselves.
Take a page out of Stitch Fix’s book, and ask your customers for the information you need instead of guessing. Then use their feedback to improve your offerings and understand what’s important to them, which is a driver of customer loyalty.
►Establish your voice and credibility.
A big component of building customer loyalty in this day and age is proving you’re knowledgeable and credible. Use your content to show you fully understand your space and what your customers want, and they’ll keep coming back to you.
Today’s customers are flooded with choice. By curating goods and services to their taste, their needs or their sensibility, you signal that you understand them as consumers. They will look to you to show them the best of what’s out there, and trust your judgement. When their next purchase need comes up, that’s a reason to go back to your site.
►Give your services a human touch—even while you automate.
Stitch Fix would be in trouble if they relied on machines for all of their style recommendations. While algorithms may improve human efficiency, they don’t replace humans all together. At the end of the day, the human eye is still the best final check to ensure quality for most businesses.