Reference no: EM133410621

Case Study: Fitsnug-The Facebook of Clothing

Is there a purpose to selfies? Many people (mostly older) have asked this question when watching someone turn their smartphone camera on themselves to take a photo. A Danish start-up believes it has found a purpose for our ubiquitous digital self-portraits; it's called Fitsnug.

Fitsnug is an online site that helps you with your wardrobe, without directly selling you any clothing. It is a social network for people looking to find clothing that fits, without actually having to try on the clothing. The site asks you to "Imagine a wardrobe where everything fits."

So how does everything work on Fitsnug? Users are prompted to fill out a brief survey that asks for weight, height, and then a description of body type (oval, pear, muscular, etc.). The questions do not ask users to take out a tape measure and provide specific body measurements, reducing both hassle and any potential embarrassment that might come with providing those details online. Fitsnug takes this information and matches users with "body doubles," other users who have similar descriptions. Users are then encouraged to take selfies (imagine that!).

Fitsnug then provides access to body doubles who are similar to each user, via the selfie. Once a body type is established, Fitsnug then suggests different garments from different clothes manufacturers and retailers. There are more than two million garments from over 400 brands on the Fitsnug database. Users can then post if a particular size T-shirt from the Gap fits their body type, or if a sweater from Diesel is too big in a medium.

Fitsnug generates revenue from the click-throughs that they recommend to users based on the data collected. If a user on Fitsnug buys an item from a third party online source, Fitsnug will receive an affiliate fee. The real benefit that Fitsnug provides is for both consumers and retailers/manufacturers. According to a 2013 Credit Suisse study, 40 percent of online clothing purchases are returned. While these returns are made for a variety of reasons, the most significant one is that the item doesn't fit well. A return of an online purchase is a hassle for the consumer, who has to box and ship back the product, and for the retailers and manufacturers, who have to deal with reduced sales numbers once a return is processed and the cost of shipping the product two ways is factored in. These are the types of numbers that Fitsnug is plotting to reduce.

The company's operations are split between Copenhagen and New York City, with most users coming from the United States, England, and Scandinavia. The Fitsnug site went live in June 2014 and has experienced strong user growth since that time.

The customer most likely to use Fitsnug is one who is not only comfortable making online purchases but also comfortable in sharing body type information. This type of openness tends toward a younger demographic, who has the time to invest in getting the most out of this site. As well, the self-regard and focus of the millennial set make a data- and selfie-based network more powerful than a databased one.

Like many other new enterprises, Fitsnug started from a problem encountered by one its founders. Christian Wylonis is of average height for his native Denmark, but when shopping for clothes in Copenhagen, he found that most clothes did not fit him due to his large torso. Christian could not find an appropriately-sized T-shirt and became frustrated that there was no information out there that could help him.

And it is precisely this information that Fitsnug is providing. The site has found that for men with a higher body mass index (BMI), Nike is the right place to buy, while men under 5'9" prefer to buy Aeropostale due to the fit provided by the retailer's clothes. For women, Zara is popular for coneshaped women, while H&M is only popular among women of higher height and/or weight. This data is valuable not only to users on Fitsnug but also to clothing manufacturers and retailers. Fitsnug is also looking at ways to improve connections with clothing producers, and providing this data will go a long way in establishing a viable and long-term business that will go beyond the selfie. There are other firms, both established and start-up, that are also in the same space as Fitsnug in improving online clothes shopping. Clothes Horse is a company that strives to provide suggestions for clothing based on the information you provide, Fits.me creates an avatar of you based on your measurements and then provides suggestions, while eBay is now involved in creating 3-D graphics of clothing to better show consumers what a particular garment would look like. Fitsnug claims its difference from the hassle-free and measurement-free way in which it collects data on its users. It also uses the trend of social networking and the sharing of information online through crowdsourcing. Just like Facebook, Fitsnug wishes to connect with users and then find ways to commercialize that connection.

While the young consumer is well established in the growth rates, other consumers are becoming more comfortable with online shopping. It will be tough to achieve growth but the market is ripe for this product.

Source: Marc Boivin - Haskayne School of Business, Calgary

Questions:

Q 1. Complete a PESTLE for the company. Which 3 factors from the PESTLE you completed are most impactful on the strategic direction for the company in this case?

Q 2. Explain the phases a customer goes through to make a purchase. Which phase do you think is most important for the organization? Give specific examples of what the marketing team can do to influence customers at this phase.

Q 3. Come up with two distinct segments the company may consider targetting based on information from the case (no outside research is expected). What would be the most important factor to segment and why?

Q 4 . Based on your segments you created, decide which you would recommend to target. What factors did you consider in deciding this target? What is the "Job to be Done" with this segment and how will you use this in your marketing strategy.

Q 5. Based on the information from the case, how would you say the company is currently positioned in the market? Support this with evidence. Do you think the company should reposition themselves in any way? If so, how? If not, why not?

Q 6. What can be a business problem for the case.

Q 7. What would be the most important close-ended criteria you would apply if you had to evaluate alternatives?