I’m Back! A Quick Update
It’s been a really long time (14 months!) since my last post. But it’s not for a lack of content or updates.
I’m still the proud co-founder and CEO of Stitch Fix. Erin and I are now amongst a team of big enough to field a baseball team. We’ve moved to a space three times as big and a block closer to Union Square on Market Street. We’re celebrating a year of operations this month– we shipped our first fixes last April!
There have been good days, crazy days, long days, amazing days. It’s been incredibly humbling and motivating to have the trust of clients, to work alongside the talented people on our team, to gain respect of our peers, our vendors and bloggers we adore.
I’ve spent the last year living and breathing in the industry, theories, and ideas I used to just think about. I’m excited to get back on the soapbox to share my experiences, thoughts, and (biased) perspectives. I’ll be focusing on the direction of retail and how we’re getting there, data, entrepreneurship, my entrepreneurial path, and company culture. And I’m going to try to post on Wednesdays.
Customer Experience (Part 1): Yes, it is an Experience
I’ve done a lot of thinking on customer experience lately and have concluded that generally speaking, people do not think enough about goods and services from an experiential perspective. No matter how medial the product or service, businesses must be thinking about what they are providing as experiences and not just transactions. I strongly believe that there are lots of opportunities to improve, optimize, and create new markets around customer experience. This post will be the first of several posts on the topic.
Apologies in advance for the theoretical and pseudo-mathematical approach to the issue in this first post, but in a world where customer experience is bucketed as being touchy-feely, I think it will help to think about it quantitatively to recognize its importance and real business impact.
Customer experience (which is directly related to the probability that a customer will return and retain), is a function of many things. I propose the equation below:
f(ce) = ßp*(p-pe) + ßt*(t-te) + ße*(e-ee) + ßs*(∆s) + ßsth*(∆sth) + ßlth*(∆lth)
OK, I know it’s been a while since we’ve seen equations and most of us can’t even remember what a regression is. But hear me out: What I’m saying here is that customer experience is a function of both measurable objective variables (in red), but also more subjective variables (in blue). The measurable elements basically are a function of how well the company performs against the consumer’s expectations of what price (p), time spent (t), and effort / convenience (e) should be. Each of these is weighed based on the relative importance (ßp , ßt, ße) for a particular industry or product. For example, for something like morning coffee, time and convenience might be paramount in experience relative to price (ßt, ße will be high), compared to something like buying a TV, where you might care more about price than convenience.
Whether or not they write it in a regression equation, companies are definitely aware of and differentiate along time, convenience, and price. However, few have succeeded in maximizing for the more subjective variables as well. Here, I have included stress (s), short-term happiness (sth), and long-term happiness (lth). Stress incurred is relatively straight forward—one might rationally choose to buy toilet paper at Walgreens for significantly more than Wal-Mart for example, because the stress of going to the large big box retailer and waiting in line outweighs the price paid. Short term happiness can be characterized simply as the ‘fun’ element, the happiness delivered while in the store, or while purchasing, that is not taken outside of the experience. The fun safety video on Virgin America for example, is such an example. Long term happiness is actual improvement in self-image, or happiness that is taken outside of the experience. For example, finding a pair of jeans that makes you feel great whenever you wear them, or feeling like your purchase has helped the world are feelings that fit into this category.
Let’s try this equation out on a couple of hypothetical purchases. Take, for example coffee and jeans. I’ve mapped out what relative importance might be for people—people care more about price of the exact same pair of jeans across retailers, while people might not care as much about price of the exact same cup of coffee. Time and effort are however more important for coffee than jeans. Long term happiness is a bigger factor for jeans, while short-term happiness is more important for coffee.
Now, if you assign scores to a number of different ways to purchase the exact same pair of jeans (you can buy at Macy’s with a slight discount, Gilt for a large discount, or at a very hands-on boutique for example), you can come up with an overall score of how customer experiences might vary across ways to purchase for both the jeans and the coffee.
While price, convenience, and time are obvious levers, people make purchase decisions that appear not to be rational on these three categories alone. Why, for example, do people buy jeans from expensive boutiques when they could buy the same items in department stores? Why would people favor an actual Starbucks location to a gas station selling the same Starbucks coffee? Or to brewing it themselves?
In fact, if you look to the second bolded column in this purely hypothetical example, you can see that failing to include subjective elements of customer experience might lead you to vastly different conclusions about customer preferences.
I’m sure my equation is not exhaustive and that there are many nuances along industry and product lines. But I think it is still effective in illustrating that it is important to think about your business’ customer experience.
What are the variables in your customer experience? What’s important to your customers? How are you making your customers react and feel? What are you maximizing now and what do you need to pay more attention to?
Humble Reminder that Innovation Can Be Simple [Toilet Paper]
Its been a while since I’ve been inspired for a humble reminder post but this tube-free toilet paper is genius.
Apparently I am slow on the uptake- it had been announced October 2010, but saw this commercial over the weekend. Really impressed that this was done first by the Scott brand, which I perceived as being a bit on the old, dinosaur end of personal care, especially relative to newer brands like whole foods or method from whom you might expect innovation like this.
My only complaint is that it is only in Costco and Wal-Mart? Not sure that the commercial, which targets the eco-friendliness of the product is consistent with the market in those distribution channels. Bring the tube-less to urban convenience stores!
Nevertheless, a very humble reminder that innovation can be simple and common…
e-Commerce: It Shouldn’t Have to Be One-Size-Fits-All
In the brick and mortar world, different stores are merchandised to reach different audiences and satisfy different customer groups. While a Safeway in California has in stock BBQ coals now, it doesn’t have snow shovels as the Stop and Shops here do. Apparel retailers similarly adjust by demographic and geography– a Bloomingdales in the suburbs carries different brands than a Bloomingdales in New York City, and a Gap in Minnesota will carry and display more weather-appropriate clothes than a Florida Gap will.
e-Commerce stores actually have MORE information than these brick and mortar stores. Especially if you are signing-in as returning customer, they know your age, where you live, what you have bought before, and potentially other demographic information as well. Even without a sign-in, e-Commerce stores know at the very least your IP address, which traces to a physical location.
Yet, if you log onto Bloomingdales.com or Gap.com anywhere in the country, you will see a landing page with the same merchandise displayed– a one size fits all approach to the entire universe of online shoppers. Why aren’t e-Commerce stores differentially merchandising?
Wouldn’t it make sense that younger people see different brands than older people? That people in perpetually warm climates not be served hat and glove merchandise on the homepage?
Clearly, if the brick and mortar stores are finding it beneficial to customize merchandise, there should be similar benefits to doing it in e-Commerce too. Have I misjudged what is possible? Is it too technically difficult? Is it just not prioritized? I’m puzzled– anyone know the answer?
Everyday Is an Audition
By nature, we humans are very goal-oriented. Goals of primal times– to secure food, to reproduce– have grown up into goals– getting that great job title, the next promotion, that ring on the finger.
We celebrate milestones. Milestones are great measurable, concrete things to work toward on paper. But the thing about milestones is that they are point-in-time– a highly limited status check in a fleeting moment.
Less measurable and less frequently celebrated is who we are off paper– the ethical decisions we have made, the impression we have made on other people, the level to which people respect and revere us. However immeasurable these things, I suspect that they are infinitely more meaningful when it comes to happiness and to reaching overall goals of whom we imagine ourselves becoming holistically.
Perhaps its because I recently saw Black Swan (amazing movie, by the way), but I wonder if the analogy is an audition. Ballet is a beautiful analogy for life in general– requiring grace, composure, skill, endurance, and the ability to enrapture an audience. An audition in ballet requires not only the physical skill of the role, but also confidence, emotion, attitude, and mental transformation.
Everyday, we should be auditioning for the role of whom we want to someday become. Maybe you can’t do those 32 fouettés in a row yet, but you can practice one, two, or ten. Maybe you can’t lead hundreds of people in a C-level role today, but you can practice by acting responsibly, ethically, and commanding respect today.
We can’t all be ballerinas, but we can all be better. One day at a time.
Whats in a Name? How to Name a Company
Naming something, anything feels personal and critically important. Of course it didn’t matter that amazon was called amazon and not Hudson or nile but it’s somehow impossible to pick something trivial.
As many of you know, I’ve been working on a business the last few months. We hoped a name would come to us—an epiphany, or a meaningful place or event—but the moment of truth never arrived, and we needed to finally lock down a name.
I couldn’t find many references out there of how to go about doing this (and would appreciate at least for future readers of this post any suggestions). So we kind of winged it, but found it worked well! I don’t mean to suggest that the way we did it was the best way, but thought I would share what we did:
Staging:
- Reserved a room with lots of whiteboard / chalkboard space for 4 hours
- Snacks, beverages
- Invited funny, creative, retail-related, and generally out-of-the-box friends to come by for different time windows for said snacks and beverages
Execution:
The general concept was to put a bunch of words together on the board. We knew we wanted something that was probably going to be 2 words long—something easy to remember but also long / random enough that we can get the domain name.
First, we brainstormed a list of ‘conjuring’ words—guiding words that we associated with our business that we wanted to be associated with our brand.
We then drew columns of several different categories of words outlined below:
- Personal: Here we included personal references— Streets we’d lived on, our last names and the like. Example: onekingslane.com
- Industry: In this case, we were thinking of retail—hanger, closet. etc. Example: hautelook.com
- Adjective: In a 2-word scenario, one was likely to be a descriptor. From colors to feelings, anything that was a descriptive word that we liked was in this category. Example: Bluefly.com
- Literal: Though we didn’t want to have strictly literal names, such as “style in a box,” we did think of words like style, habit, etc. Example: renttherunway.com
- Veto words: Mostly to guide our friends wandering in and out– words we absolutely didn’t want included.
With our creative, fun, and thoughtful friends, we brainstormed words for each of the categories, and then stared at the board and threw together combinations of words from different columns as potential names. And noodled over snacks. Lots of noodling.
In the end, it was a fun, but also very productive session. We had several finalist names that we considered putting out to a vote, but fell in love with one in particular before we could even set up a poll to vote.
The name we selected… drumroll please… is:
Do you love it? Rack is meant to evoke the rolling in of a rack in a personal shopping experience, and habit is a somewhat literal reference to the service being ongoing and continuous, and almost like a vice, in a good way. Memorable, available, and simple, what more could you want in a man? Or a name, I mean.
More to come soon!
Happy New Year! My self-improvement hopes for 2011…
I was lucky enough to ring in 2011 in beautiful Cape Town, South Africa. South Africa is another post in and of itself– absolutely gorgeous country, fantastic food, people, wine… an amazing place I can’t wait to return to.
Thinking about the new year in an unfamiliar place with unfamiliar customs, culture and the like led me to think about resolutions that transcend time, culture, and context– easy things universally applicable to any aspect of life from meeting with lawyers to haggling with street vendors.
Full disclosure that this is super cheesy (especially unnatural feeling as I’m donning all black and motorcycle pants posing as a New Yorker this week), but here are some things I’m thinking about in 2011 to improve my life all the time, from touristing to entrepreneuring…
- look nice: looking frumpy has probably never gotten anyone anywhere. not a lot of downside to that extra 5 minutes to look presentable and every now and then it pays off.
- be interested: not everyone is going to be interested in me and my work, but i can always be interested in them.
- be happy: there’s some very cheesy buddhist saying about one person smiling at a random person, who smiles at another random person, leaving the whole street smiling for no reason– this is pushing the limits of my cheese tolerance, but the point is that i plan to smile more.
- reward real: it’s not always easy to tell the truth, hear the truth, or have honest conversations. here’s to real in 2011.
Yes, this list reads like a cheese platter, but I’m letting myself indulge for now. Maybe it will get me places in 2011. Like funded.
