Presentation from NRF 2020: Retail’s Big Show - Glenn Allison, Vice President, AI, Automation, and Innovation, Tractor Supply Company - Brad Klingenberg, Chief Algorithm Officer, Stitch Fix

1. Delivering on personalization: Harnessing feedback and
machine learning to meet and anticipate shoppers'
needs
Glenn Allison, Vice President, AI, Data, & Innovation
Tractor Supply Company
@glennallison

2. Who We Are
Pet Animal & Livestock Land
Apparel Truck & Tool Seasonal
Tractor Supply is Unlike Most Retailers: We Serve a Lifestyle

3. Leveraging our Physical Assets. . .
. . .Growing Our Digital Capabilities

4. BOPIS Success
>70%
of online sales
20%
in-store
attach rate
4 2 1

5. Leveraging Artificial Intelligence
Inventory
Customer
Engagement
Convenience

6. Inventory
Accuracy
Alternate
Sourcing
Threshold
Automation

7. Customer Engagement
Anticipating
Customer’s Needs
Notifications Weather
Hi John! The baby chicks you
purchased in March should be
ready for Layer Feed.
Would you like to place an
order today for delivery or
pickup?

8. Convenience
Voice and Image
Search
Team Member
Notifications
(in pilot)
AI BOPIS Order
Pickup
(in pilot)
Neighbor’s Club Member John
Smith has entered the store.

9. Leveraging Artificial Intelligence
Inventory
Customer
Engagement
Convenience

10. Lesson’s Learned
Keep It Simple
Quick Wins
Innovate In Your Space

12. Delivering Personalization
Brad Klingenberg, Stitch Fix NRF | Jan 2020
Re-defining retail with data science

13. What is Stitch Fix?
Online personal styling service helping people find the clothes they love through
personalized shipments of apparel, shoes and accessories.
6,500+ employes
5,000+ stylists
125+ data scientists
1,000+ brands
3.4 million clients
$5bn worth of merchandise sold entirely on recommendation to date.

14. Themes in retail
The bar for compelling
personalization is rising
Competing on anything other
than price and logistics
requires offering something
more
More stuff, cheaper is not
always better

15. There is too much stuff
There are too many options
when shopping online,
causing a burden of search
and discovery
Research shows that people
who are presented with a few
options rather than many
make better, easier decisions

16. A long history of personalization
In some ways, personalization is old-fashioned

17. The solution: personal styling for everybody

18. Personalization
at Stitch Fix

19. Stitch Fix

20. Stitch Fix

21. Stitch Fix

22. Stitch Fix

23. Styling at Stitch Fix
Personal styling
Inventory

24. Styling at Stitch Fix: personalized recommendations
Inventory
Algorithmic
recommendations
Machine learning

25. Styling at Stitch Fix: expert human curation
Human curation
Algorithmic
recommendations

26. Lessons from Personalization at Stitch Fix
Lesson 1: Feedback loops enable personalization at scale
Lesson 2: Client incentives matter
Lesson 3: Feedback can be fun

27. Lesson 1: Feedback loops power
personalization at scale

28. Two categories of data
Things clients tell us about themselves in general

29. Two categories of data
Things clients tell us about their experience

30. Learning through feedback

31. Learning through feedback
Better
recommendations
Better inventory

32. Lesson 2: Client incentives matter

33. You need the data!
Personalization depends on knowing your clients

34. Broken feedback loops
Why don’t traditional retailers have this data?
● They don’t know they need it
● Their clients have no good reason to give it to them
Recall, the bar is high. You want to know every client!

35. Broken feedback loops
?
Weak or missing altogether
Unclear what the customer thinks about what they bought, much less others items

36. You need the data!
The best way to get data from your clients is for them to want to give it you!
Compelling self-interest drives feedback loops
● First order benefit (very compelling): your experience gets better!
● Second order benefit (less compelling): your feedback helps Stitch Fix /
other clients

37. Lesson 3: Feedback can be fun

38. Sharing and learning

39. Data collection as engagement
Providing information can be fun! And it works! 3bn+ ratings and counting...

40. Data as fuel for personalization

41. 2020 and beyond

42. New ways data science is driving greater client engagement and business impact into 2020 and beyond
Shop Your
Looks
Shop New
Colors
Inventory
Optimization
Algorithm

43. Parting thoughts

44. Key to personalization = feedback

45. Thanks!
Questions?