Under Armour is copying a strategy from a billion-dollar startup -- and it's a brilliant move

Under Armour BoxUnderArmourThe ArmourBox has free shipping both ways — and no fees.
  • Under Armour has a new subscription service.
  • It looks a lot like Stitch Fix, which just filed for an IPO.
  • Stitch Fix has been successful, which bodes well for Under Armour.

Under Armour has just announced a new subscription service called ArmourBox.

Here’s how it works: Tell Under Armour what kind of clothes you like and how you work out, and they will ship you a box with four to six items for you to consider purchasing. No purchase is required, there’s no fee, and shipping is free both ways. If you like the whole box and buy it all, you’ll get a 20% discount.

It that sounds familiar, that’s because Stitch Fix works nearly the exact same way.

There are a few differences between the two services. Stitch Fix doesn’t work on a subscription model unless you want it to, each box carries a $US20 fee unless you buy something, and Stitch Fix carries more than just its house brands, unlike Under Armour.

With ArmourBox, on the other hand, you can choose to receive a shipment every 30, 60, or 90 days, but you can’t skip a delivery or pause your subscription.

Under armour boxUnder ArmourA typical ArmourBox.

On the surface, however, the services work in the exact same way, though it’s not quite clear if there are differences in how the boxes are filled by their respective companies.

Stitch Fix’s strategy has worked great for the company so far. It just filed for an IPO, reporting nearly $US1 billion in revenue for 2017. The company has been valued at just under $US2 billion, according to Axios.

Subscription services are a notoriously risky business, but Stitch Fix is proving that the box model can work.

Under Armour’s service carries no fees, and there are no charges unless you forget to return a box or you decide to buy something. The customer is required to take action within seven days so that they’re not charged for it all.

The no-risk strategy is an ambitious play to get product into customers’ homes so that they can evaluate it on their own time. It’s a sign of the confidence that Under Armour has in its offerings. It’s hoping that if it can get its stuff in people’s hands, they will like it enough to continue receiving it.

If that doesn’t happen, Under Armour has worse problems than a failed subscription service.

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