As Amazon takes over a bigger chunk of online retail, e-commerce start-ups are searching for niche areas where they can provide a better, more targeted experience.
Stitch Fix, a personal styling service, will be the first of this new breed of start-ups to test the public market. The six-year-old start-up, which sends a customized box of apparel based on a person's measurements and preferences, filed its IPO prospectus on Thursday.
Rather than trying to take on Amazon's vast marketplace and next-day delivery, Stitch Fix is all about clothing, shoes and accessories.
Customers receive a shipment of five items, selected by algorithms and stylists, and only pay for what they keep. Other start-ups are focused on home decor, vitamins for women and different types of personalized and curated services that Amazon lacks.
"Amazon is all about efficiency," said Rick Yang, an investor at venture capital firm NEA, which is not a Stitch Fix shareholder. "But as Amazon gets bigger, it becomes a bit more impersonal."
Yang referenced Goop, an NEA-backed start-up founded by actress Gwyneth Paltrow, as another company creating a new shopping model by combining content and personal curation. Casper, Houzz, and Brandless are also carving out a winning formula by being creative, he said.