Q: How have private brands impacted the business, and what percentage of sales do they represent? A: Matt Baer stated that the composition of private brands is around 40-50% of the total portfolio, with private brands generally outperforming market brands in terms of keep rate and margins. He emphasized that the mix of private and national brands will continue to evolve based on client needs and insights, ensuring a client-right assortment.
Q: Can you elaborate on the progress with the active client file and strategies for improvement? A: Matt Baer highlighted the importance of acquiring healthy clients and driving engagement to increase revenue per active client and lifetime value. He noted improvements in client onboarding, re-engagement efforts, and increased transaction frequency. David Aufderhaar added that the company expects continued sequential improvement in active clients, with a focus on methodical client acquisition and engagement.
Q: Are you using AI to enhance customer engagement and retention? A: Matt Baer confirmed that AI is integrated into every aspect of Stitch Fix's business, including driving engagement and re-engagement with clients. AI capabilities have been instrumental in unlocking promotional capabilities and maintaining high contribution margins, contributing to competitive strength.
Q: How are reactivations trending versus expectations, and what is the outlook for this opportunity? A: Matt Baer reported strong results in re-engagement efforts, driven by improvements in assortment and client experience. David Aufderhaar noted that re-engagements were up 17% year over year, marking the second consecutive quarter of growth, contributing to the slight beat in active client expectations.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.