How Direct-to-Consumer Startups Collect Better Data & Offer More Personalization
Direct-to-consumer startups are one of the fastest areas of eCommerce growth. One of the advantages many of these companies have over traditional brands is their ability to collect rich customer data and as a result offer a more personalized customer experience. This is especially the case with online clothing styling services such as Stitch Fix and Bombfell as well as other direct-to-consumer brands such as bra and underwear company ThirdLove.
One of the clever and innocuous ways each of these brands collect meaningful customer data is through online quizzes customers take to use each of these company’s services. These quizzes ask about the customer’s style preferences, size and much more. While customers are providing rich data in the hopes of a more personalized experience, in the background these direct-to-consumer brands are gathering deep treasure troves of customer data. How are these companies able to get such rich data? They have flipped the script on the old customer survey and have made participating in an online quiz fun and easy. Most importantly they have created a meaningful value proposition for customers – provide your data and we will give you a service that is personalized to you. Since only 22% of customers are satisfied with the amount of personalization they receive figuring out how to obtain richer data from customers and providing a tailored offering has a lot of value.
In an era where data is the leading currency these companies are ahead of the game. See how two styling services and a bra company are changing the way customer data is collected as well as the depth of that data.
1. With so many options for where to purchase clothing male consumers with a desire to be on trend may find it hard to find the perfect item. That’s where Bombfell comes in. It is an online subscription clothing and styling service for men. To get started with Bombfell customers take a quiz so that Bombfell can learn about the customer’s tastes in order for the company to pick the right clothes. Bombfell’s quiz not only asks men if they wear formal, business casual or casual clothing to work, but customers also have to submit data on customer’s waist size as well as their preferred shopping budget. The quiz also asks which stores the customer shops at and includes a list of brand logos on its website to make it easy to select key competitors. Bombfell customers also have to submit their name and email address to progress through the styling process.
Once the customer has completed the quiz, Bombfell’s data science team aggregates the data across customers and uses it to power algorithmic recommendations. Then human stylists add a personalized touch to create a box of clothing that the individual customer will love. The service is perfect for individuals who care about their style, want a personalized customer experience and want the right items shipped directly to their home.
Sandro Roco, Bombfell’s Director of Strategic Initiatives has has said: “we think the experience of shopping for clothes still leaves much to be desired. The gap to be solved is, ‘will it fit me specifically?’ Our company has been able to develop a proprietary IP. Customers tell you things that they won’t even tell their spouses or therapists. Our guys tell us a lot in the onboarding process. They give us information that Amazon may not get — their height, weight and more. What investors and we want is positive unit economics. We generate solid gross margins.”
2. Stitch Fix, an online clothing styling service has a similar service and it uses over 85 meaningful data points provided by customers through an online quiz. To get started with Stitch Fix customers must complete a Style quiz. Before even starting the quiz customers must enter their name, email address and zip code. Customers have to submit a broad range of data including their height, weight, size and whether or not they have a curvy body type. After collecting customer data Stitch Fix’s team of 100 data scientists with Phds in areas such as math, neuroscience, statistics, and astrophysics create merchandising algorithms based on artificial intelligence. Then, enter personal stylists who add an essential human touch similar to Bombfell. They can override the recommendations made by the algorithms.
Stitch Fix is the only one out of these companies that is publicly traded and it has a valuation of $2 billion.
3. Customers shopping at ThirdLove, an online bra and underwear retailer, start the company’s “try before you buy” shopping process by taking a Fit Finder quiz. Customers have to answer questions such as what their current bra size is and if they have any fit issues (i.e. the cups gape a lot). Customers also have to enter the name of the brand the customer wears as their everyday bra. Through that question ThirdLove gathers valuable data about its competitors. In exchange for sharing intimate information, customers receive a bra recommendation in as little as 60 seconds. To receive that data customers submit their email address and a recommendation is emailed to them.
12 million women have used ThirdLove’s Fit Finder quiz to-date. The data has enabled the company to design and offer 78 bra sizes including bras that come in half sizes, the first company to do so. According to ThirdLove’s CEO Heidi Zak, the company is trying to create a “bra for everybody”. “We use the data we collect from Fit Finder” — that is the measuring tool in its app — “to create a better physical product and individual sizes, and then we use the data to create a better digital product experience,” Zak said. “We do all this in a way that more traditional retailers don’t.”
Given the difficultly that women have in finding the perfect fitting bra using data to create bras for every shape and size is a powerful example of personalization and a difficult to value proposition to imitate.
ThirdLove is the world’s fastest growing online bra and underwear company and is valued at $750 million.
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Emily McCullough, a Digital Marketing Intern, with Indigo9 Digital Inc. contributed to this article. You can learn more about Emily here.
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