280,000 net new customers acquired in 2017[ 1]
Blended Customer Acquisition Cost of $280
2017 Cohort Payback:~ three years[ 2]
938,000 new customers+ re-activations not actively involved 2016
Blended Customer Acqusition Cost: $75
Average 2017 Cohort Spend: $500[ 3]
2017 Cohort Payback:
The cost of the product The cost of the panel of experts( in this case stylists) The cost of logistics
The first is simply looking at other analogous business. Shipping, reverts fabrics, and re-stocking labor costs for most busines companionships is between $15 -2 0 on a blended basis. Stitch Fix is a grown-up, scaled fellowship and likely deserves to exist on the lower end of that collection.
Numerous firms will offer a discount for maintaining one’s entire shipment. It’s actually rather instinctive as a full impede actually offsets the return and re-stocking rates ($ 8-12) in addition to boosting median require appreciates. A conventional Fix has a $ 275 retail importance( average of $55/ part ), so their 25% deduction is contra revenue by ~$ 55 ($ 55 x 4 items x 25%)- likely ~$ 15 importance of contribution boundary. Since they make added margin on the 5th and final component, this is a solid transaction for the Company if it relieves( or better) their proceed+ re-stocking expenses. It is also implies the proceed and re-stocking payments are somewhere in this wander.
LTV: CAC Ratio- This should be fairly obvious, and although Stitch Fix tries to give us insight into their Lifetime Value analysis, it’s predominantly unproductive without knowing true-blue CAC , nor contribution margin. Retain Rate- This is the metric to move in the two categories, and has historically been difficult to move the needle on. It is calculated as [# of Items Kept by Customer/# of Items Sent in Fix ,] Stitch Fix does show us exhibit they’ve been able to hoist this metric 22% in two years- but we don’t know from what base.
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