A friend of mine brought up a business a while back and asked what I thought. I never heard of it, but its model was to provide women with stylists who would find clothing for customers’ specific body types and ‘tude and send them in the mail once a month. One overarching theme was that apparently no one wanted to get off the couch to do anything for themselves, from trying on clothing to test-driving a car. Would they pay to have someone chew their food for them because it was too much trouble? But I digest.
This raised a whole lot of issues for me, but when I asked Dr. SJ what she thought, she just called bullshit. “How are they going to individually select clothing for a million customers? It’s nonsense. They’ll come up a few variations, like fat girl boho or skinny girl preppy, and everybody in that pigeonhole gets the same box.” In other words, the pitch was one thing, but she doubted the reality was possible, no less effective.
No matter. The company went public, along with others, and was adored for its innovative approach.
The best businesses often solve real problems. Amazon (AMZN) , for example, first made it possible to buy books without visiting a bookstore and eventually made it easy to buy anything from pretty much anywhere.
Netflix (NFLX) , at first made it so you could rent DVDs without visiting a video store, then it more or less ended the concept of DVDs with its streaming service.
A tad simplistic and not entirely accurate descriptions of either business, but they were tossed in to juxtapose the focus of the article.
That’s what Wayfair (W) and Stitch Fix (SFIX) are and what Peloton (PTON) may be. The first two address what their founders see as big issues that actually just aren’t. Both companies were built to address what its founders saw as a mass problem — and investors believed them — but neither addresses a real pain point felt by millions of people.
Did investors believe them, or did investors see companies that took advantage of the “innovative” idea that people had grown too addicted to convenience, to never having to get off the couch to do anything, that any business that sought to take advantage of this toxic combination of laziness and low standards stood a decent chance of success. Maybe the better mousetrap wouldn’t work, but if it did, it could be huge and worth the risk.
Stitch Fix sounds like a great idea. The company uses a mix of human stylists and artificial intelligence (AI) to send people clothes that will be both stylish and comfortable. The reality is that the actual audience for the company is people who want to look a certain way who don’t like shopping or don’t have the time to shop.
Add in that clothing is inexact and you get a system where some items don’t fit, you don’t like others, and some may just not be right for you. That leads to having to return things which is much more of a hassle through the mail than just bringing something back to the store (or not having bought it in the first place because you saw it and maybe even tried it on).
The idea of buying clothes through the mail is hardly innovative. LL Bean’s been on that for a while. The idea of SFIX is that you pay them to decide what clothing you get. Trying to rationalize why people would pay for this is a fool’s errand. People are buying boxes from companies with random stuff inside of all sorts. Why not clothing? Or couches?
Wayfair has a similar logic flaw. The company sells furniture over the internet. That’s things like beds, chairs, and couches which people generally want to touch, sit on, and lay on before buying without any chance to do that.
Ever try to find a box the right size to return ship a couch?
Both companies are supposed to make something unpleasant easier and mostly, they don’t. Yes, there’s an audience that simply hates shopping for clothes and people who buy furniture for rentals or rooms they don’t care about that much, but both of those audiences are niches, not mass market.
And while the business of Peloton is somewhat different, its fate may not be.
Peloton has a best-in-class product, but as they often say on “Shark Tank,” it’s a product, not a business. The company doesn’t really make money selling hardware. It sells bikes and treadmills to get people to pay for its live classes and library of old classes.
When Peloton ads started popping up during the pandemic, it was deja vu all over again. That fantasy of you sweating your butt off riding 197 miles to a spandex hottie imploring you to push through it. Apparently, this was meant as a substitute for going to the gym during the pandemic, but the fact remained that people preferred going to the gym as Peloton bikes flooded craigslist.
A lot of money changed hands on these three companies, and it’s not beyond the pale that they will pivot, find a viable niche to maintain a sufficient profit to stay in business, but unlike Brooklyn Barbecue, they will not take over the world. And that’s fine, as they gave it their best shot and, after their bright and shining moment faded, fell from grace.
One of the perpetual points I try to make here is that when we fail to accurately and faithfully recognize problems, usually because the root is in unpleasant conflict with the reality of human existence, we end up with fixes that fail. Even if we solved something, it wasn’t the problem in need of solving which we refuse to believe exists because it defies what we want to believe. Like there is a stylist sitting in a far off warehouse filled with beautiful clothing doing nothing other than finding stunning clothing for your idiosyncratic taste and body type, rather than Box Number 7.