AI and Machine Learning in business: use it everywhere!

How One Clothing Company Blends AI and Human Expertise, HBR nov-16

How One Clothing Company Blends AI and Human Expertise, HBR nov-16

Last week Bev from PWI’s group in Linkedin pointed me to a great HBR article: “How One Clothing Company Blends AI and Human Expertise”, by H. James Wilson, Paul Daugherty and Prashant Shukla.

It describes how the company Stitch Fix works, using machine learning insights to assist their designers, and as you will see, they use machine learning at many levels throughout the company.

The company offers a subscription clothing and styling service that delivers apparel to its customers’ doors. But users of the service don’t actually shop for clothes; in fact, Stitch Fix doesn’t even have an online store. Instead, customers fill out style surveys, provide measurements, offer up Pinterest boards, and send in personal notes. Machine learning algorithms digest all of this eclectic and unstructured information. An interface communicates the algorithms’ results along with more-nuanced data, such as the personal notes, to the company’s fashion stylists, who then select five items from a variety of brands to send to the customer. Customers keep what they like and return anything that doesn’t suit them.

The Key factor of success for the company is to be good at recommending clothes that not only will fit the customer and that they’ll like enough to keep them, but better than just ‘like them’, that they like them enough to be happy with their subscription.

Stitch Fix, which lives and dies by the quality of its suggestions, has no choice but to do better [than Amazon and Netflix].

Unlike Amazon and Netflix that recommend directly products to the customers, here they use machine learning methods to provide digested information to their human stylists and designers.

[…] companies can use machines to supercharge the productivity and effectiveness of workers in unprecedented ways […]

Algorithms are for example analysing the measurements to find other clients with same body shape, so they can use the knowledge of what items fitted those other clients: the clothes that those other clients kept. Algorithms are also used to extract information of clients’ taste on styles, from brands preferences and their comments on collections.  Human stylists, using the results of that data analysis and reading the client’s notes, are better equipped to choose clothes that will suit the customers.

Next, it’s time to pick the actual [item of clothe] to be shipped. This is up to the stylist, who takes into account a client’s notes or the occasion for which the client is shopping. In addition, the stylist can include a personal note with the shipment, fostering a relationship, which Stitch Fix hopes will encourage even more useful feedback.

This human-in-the-loop recommendation system uses multiple information streams to help it improve.

See how stylists maintain a human dialog with their clients through the included note. This personalised contact is usually well appreciated by customers and it has a positive effect for the company because it opens the door to receive their feedback to better tailor their next delivery.

The company is testing natural language processing for reading and categorizing notes from clients — whether it received positive or negative feedback, for instance, or whether a client wants a new outfit for a baby shower or for an important business meeting. Stylists help to identify and summarize textual information from clients and catch mistakes in categorization.

The machine learning systems arelearning through experience’ (=adapting with the feedback) as usual, but in a humanly ‘supervised’ way. This supervision allows them to try new algorithms without the risk of losing clients if results are not as good as expected.

Stitch Fix employs more than 2,800 stylists, dispersed across the country, all of them working from home and setting their own hours. In this distributed workforce, stylists are measured by a variety of metrics, including the amount of money a client spends, client satisfaction, and the number of items a client keeps per delivery. But one of the most important factors is the rate at which a stylist puts together a collection of clothes for a client.

Speed is an important factor to satisfy their customers’ demands, and machine learning gives them the needed insight so much quicker than if stylists had to go through all the raw data!

This is where the work interface comes into effect. To enable fast decision making, the screen on which a stylist views recommendations shows the relevant information the company keeps about a client, including apparel and feedback history, measurements, and tolerance for fashion risks — it’s all readily accessible

The interface itself, which shows the information to the stylist, is also adapting through feedback, being tested for better performance.  And you could go again one step further and check for bias on the stylists:

Stitch Fix’s system can vary the information a stylist sees to test for bias. For instance, how might a picture of a client affect a stylist’s choices? Or knowledge about a client’s age? Does it help or hinder to know where a client lives?

By measuring the impact of modified information in the stylist interface, the company is developing a systematic way to measure improvements in human judgment

And there are many other machine learning algorithms throughout the company:

[…]the company has hundreds of algorithms, like a styling algorithm that matches products to clients; an algorithm that matches stylists with clients; an algorithm that calculates how happy a customer is with the service; and one that figures out how much and what kind of inventory the company should buy.

The company is also using the information of the kept and returned items to find fashion trends:

From this seemingly simple data, the team has been able to uncover which trends change with the seasons and which fashions are going out of style.

The data they are collecting is also helping advance research on computer vision systems:

[…] system that can interpret style and extract a kind of style measurement from images of clothes. The system itself would undergo unsupervised learning, taking in a huge number of images and then extracting patterns or features and deciding what kinds of styles are similar to each other. This “auto-styler” could be used to automatically sort inventory and improve selections for customers.

In addition to developing an algorithmic trend-spotter and an auto-styler, Stitch Fix is developing brand new styles — fashions born entirely from data. The company calls them frankenstyles. These new styles are created from a “genetic algorithm,” modeled after the process of natural selection in biological evolution. The company’s genetic algorithm starts with existing styles that are randomly modified over the course of many simulated “generations.” Over time, a sleeve style from one garment and a color or pattern from another, for instance, “evolve” into a whole new shirt.

How does a company using so many machine learning systems look like at employee level? How is it perceived by the employees? This is what they say:

Even with the constant monitoring and algorithms that guide decision making, according to internal surveys, Stitch Fix stylists are mostly satisfied with the work. And this type of work, built around augmented creativity and flexible schedules, will play an important role in the workforce of the future.

Machine learning and AI (artificial intelligence) systems are changing the way companies do business.  They are providing an insight that either could not be grasped before, or that it could, but not at that speed, nor being accessible as a tool to assist each and every employee.

The least that can be said is that this will improve productivity in all sectors and, as today almost everyone has access to the Internet to verify a word, look for a translation, a recipe, check the  weather and countless other uses, the new generation of employees will be assisted by tons of algorithms that will analyse data and deduce, induce or summarize information to assist them in their work and in their decision-making.

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