Ch 3. Amazon Leapfrogs Stitch Fix with Product Fitness 80 - AMORE STORIES - ENGLISH
#Michelle Ma
2017.09.21
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Ch 3. Amazon Leapfrogs Stitch Fix with Product Fitness 80

Introducing the columns written by members of Amorepacific Group

ColumnistMichelle Ma
APC Marketing Strategy Team


 I'm writing this chapter in the hope that we could all get a new perspective about what innovation really means when it comes to products and services. A few days ago I was profoundly impressed at an article I read on the moment of enlightenment that the vice president of a software company had about 'innovative minds,' so I would like to share this story with you.

 When we think of pursuing the best, we usually mention the Japanese and their meticulous attention to detail. But, in fact the Japanese principles for making a product is not about 'perfection' nor about being 'the best,' but about 'fulfilling 80%.'

 People have two types of attitudes towards their desire. One is to endlessly satisfy it, the other is to control it. Ultimately, controlling one's desire can bring you a greater pleasure than constantly having to rush for more. Japanese designer Naoto Fukasawa once said, 'It's enough to fulfill 80% of people's desire.'

# What is Product Fitness 80?

 Product Fitness 80 is a term frequently used in Japan. Just as it's recommended to eat until you are 80% full, people feel the most comfortable when a product is designed to satisfy 80% of their desire. Naoto Fukasawa designs to satisfy 80% of desire because people's desire does grow and they keep demanding something better than what they originally wanted.

 Not many people know the name Naoto Fukasawa, but they might have seen the watch he designed for Issey Miyake. The dodecagonal watch face replaces numbers and the face remains empty except the hour hand and the minute hand. The basic function of a watch is to learn the time and twelve angles are enough to tell us what time it is, making complicated numbers unnecessary. It's up to the users to figure out the exact time. In other words, the design is 80% complete and the remaining 20% is for the users to fill in.

 The ultimate means reaching the highest level of something, but the best doesn't always stand for providing customers with the utmost satisfaction.

 This could be easily understood by the example of a computer mouse. A mouse pursues accuracy and uses scientific methods to collect data. The mouse below offers extreme comfort through an ergonomic design concerning slide frequency, grip, angle and so on. That is to say, this mouse has reached the ultimate.

 This mouse is incredibly comfortable to use because the designer created it based on a large amount of data to provide supreme convenience. But, if the user has an injured hand, things change. If the user cannot use the right hand, this ergonomic mouse causes great discomfort. So, to explain, at the beginning of the design process the designer has set a certain circumstance where the user uses mouse with the right hand in front of a computer which resulted in the creation of a limit. As the designer has already set the conditions for the mouse or the user, they become the limits in using the product.
 Now I'll introduce you to a mouse from Apple which embodies the principle of 80%. In fact, all Apple mouse products from the first generation model to the most recent have been made with this feature. The founder of Apple, Steve Jobs demanded that his engineers develop products that could interchange with a computer, and said it should be able to be used on a flat desk or even on jeans. This mouse is neither the most ergonomic nor particularly comfortable, but it has opened a broad range of possibilities for its users. Whether you are left-handed or right-handed, or use two fingers or three fingers, it was up to the users to choose how they would use the product.

 The 80% principle is implemented in services as well. Next up is 80% Innovation by Amazon, a company listed in the world's 50 most innovative companies of 2017 selected by American technology media Fast Company.

Stitch Fix vs. Amazon

 On June 21, the stock price of all offline shopping businesses dropped after Amazon launched a clothing retail service called Prime Wardrobe for its Prime members. Many people thought that this service would have a huge impact on the existing sales method and e-commerce. Before we discuss Prime Wardrobe, I would like to mention Stitch Fix, which started this business for the first time in the market.
 In the existing offline market and in e-commerce, customers make purchases after touching and trying them on at offline shops or after imagining themselves in the clothes. But, many offline shops don't have fitting rooms due to a lack of space and online shops provide indirect experience through technology such as VR which isn't sufficient compared to fitting them on in person.
 A popular shopping mall started out in San Francisco, USA, Stitch Fix leaped over these limits to realize customer satisfaction. Their customers have to answer detailed questions on their body shape and fashion style when they sign up. When the affiliated stylist selects five clothes based on the data and sends them, the customer can choose the best ones and return the rest. This service is available at only $20, which is the fee for the stylist. Customers get a $20 discount when they buy one dress and a 30-50% discount for purchasing all five.
 This service makes a profit if customers select two or more items from the box. But, Stitch Fix is winning customer confidence thanks to its own private recommendation service. All recommendations are made through collaboration between AI and humans. Developed by a group of 80 data scientists, their algorithm selects and forecasts results based on personal data created by customers and their purchase history. Stitch Fix makes use of unsuccessful recommendations, as well as analyzing customer styles and tastes to make better decisions about customer preferences.

 The company processes big data to increase customers' purchase rate and recommend the kind of clothes that more people would love. Their business philosophy is to realize customer satisfaction by pursuing the best from beginning to end. But, their customers have to answer several questions, including basic information such as weight, size, fashion style and price. I once tried it and it felt like participating in a survey while I'm paying the money. 'Do you like to flaunt in? Or do you prefer clothes to fit you? Would you rather downplay? How do you prefer clothes to fit your bottom half?' Then, there are questions regarding the exposure of each body part, including shoulders and arms. And, for the answers users get to choose from 'A: I love showing it off! B: Sometimes I'll flaunt it. C: Flaunt it only for special occasions. D: Less is more, keep it covered.' Since there are so many details within a single question, I was already exhausted before moving onto the second one.

 After completing the grand marathon of questions, some pictures appear that suit your style.
  • Stitch Fix question (price range)

 At the final step you select the price range from accessories to shoes. After the process has finished, you deposit $20 with your credit card and you can meet with your first Fix soon. One regrettable thing is that they don't provide any pictures or examples of the delivery, so you never know if the items will suit you until you receive them. According to user reviews found on Google, most users chose one to two items and not many cases selected all five of them.
 The recommendations might not satisfy a customer's taste in case the customer doesn't provide accurate information in the beginning step, or if there's an omitted question, but I'm sure the next recommendation will be more precise than the first one. Stitch Fix aims to provide the best analysis, the best recommendations and the best looks to its customers. It's the best choice for those who don't have time for shopping.

 Meanwhile, Amazon's new Prime Wardrobe is even more amazing. Amazon's excellent platform and outstanding distribution system has already brought superiority to Prime Wardrobe. I would like to analyze the difference between Prime Wardrobe and Stitch Fix in accordance with the aforementioned role of the '80%.'

 Prime Wardrobe is an exclusive service for Amazon Prime members, and they can try the clothes on before they buy them. While recommendations by the unrevealed stylist emanates a mystique on Stitch Fix, you can see and select items then have them delivered before you make a purchase in Amazon. The number of items are not limited like it is in Stitch Fix, and all you have to do is to try them on then leave the unselected back in the box and put it in front of your door. Amazon provides a free delivery service. You even get a larger discount as you buy more items. For example, you get 10% discount for 3 items and 20% for five.

 Check out the Prime Wardrobe service process on the short video.
 In the video, Amazon advertises that you can try before you buy all within the comfort of your home. Customers can choose 3-15 items, including clothes, shoes and accessories, have them delivered for free and try them on within 7 days. If they don't want any of the items, they can return them without reason using the same box or any recyclable box, and Amazon pays for the shipping charge. Customers can pay after 7 days without having to make payment in advance.
 As a matter of fact, Amazon started in the fashion business since 2015 and reached sales of 20 billion dollars in 2016. In 2017, it became the leading clothing retailer in the US surpassing Macy's and Walmart, and is projected to achieve a 17% market share by 2020.

 Compared to Stitch Fix, Amazon played a better strategy using the 80% principle. One of the reasons more customers preferred Amazon besides its name value and brand power is because it left the freedom of choice to customers. Prime Wardrobe is a Stitch Fix service of trying the clothes on online brought to the comfort of your home. Even though Stitch Fix claims that its service has reached the bedroom, this is an overestimation of customer satisfaction. Though big data and a mysterious stylist offer an accurate and perfect recommendations, people ask for more. And all they put forward is the logic of 'Do you like this item? No? Then I'll show you another.' It is yet true that data and AI stylist are forecasting the styles. But, the strategy carried out by Prime Wardrobe is designed to first establish 80% with a perfect platform and distribution system, then leave the 20% to be completed by customers themselves. Even though it is difficult to predict the results of the service since it is currently under test operation, I do think that customers will be able to experience a very nice service.

 With its big data, Amazon will be able to draw out even more precise recommendations in the future based on AWS cloud and Echo Look, thus Prime Wardrobe will also provide more powerful recommendations. In addition, if they add push notifications to their recommendation functions, along with the delivery service they provide before payment, the choice range of their customers will expand enormously.

# Conclusion

 Solutions proposed by several e-commerce platforms to fix the pain points of online shopping of not providing a fitting process seem similar to each other at first glance, but in fact they are very different. Stitch Fix invested great time and effort in understanding its customers through algorithm and data, but omitted 20% of the power driven by customers. But, Amazon was able to reach the core desire of its customers with a simple range of questions and offered them the freedom of choice. It seems important to improve efficiency by establishing 80% with a complete system and leave the 20% to customers so that they can fulfill their needs by themselves.

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