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06/02/2014

Chico's Puts the Pedal to the Metal on Omnichannel

Central to its long term growth strategy is Chico's omnichannel initiatives. The retailer invests in technology that allows its customers to shop how, when and where she chooses to shop. To fully integrate community, content and commerce on all of the customers devices and in the boutique she favors, Chico's is focused on a cloud-based digital retail theater.
 
It has become increasingly important to blend the online and in-store experience. For several years now, the retailer has taken advantage of its e-commerce assortment in the distribution center, enabling it to fulfill orders from other stores.
 
"A customer actually can shop and ring up in a store, and when they shop and ring up their sales, then ship either from another store directly to the customer or most likely, from our direct-to-consumer distribution center in Winder, Georgia," said Chico's president and CEO David Dyer.
 
While the retailer currently has the capability to reserve online and pickup in stores, or shop online and pickup in store, the functionality is not enabled. The problem it faces is that all of its systems are batch. On a batch system – where we record sales overnight – when an item is promised to be in the store and then the customer goes to the store, and it's actually sold before that batch updated overnight, the customer is disappointed.
 
"I think that capability will come down the road, but there are some other issues that we have to address before we're confident that we can turn it on and have the level of customer service that our customers certainly expect," noted Dyer.
 
With shared services, each of the retailers brands share the same technology and the same technology platform. This includes a DC upgrade, which has been extremely efficient. The distribution center was built with a direct-to-consumer capability to nearly double the retailer's business with very little extra investment.
 
"We think that we have all the infrastructure and tools in place, and some of it is just making sure that we don't disappoint the customer," said Dyer. "I think the customer service factor of it is our biggest concern as we roll these things out. We want to make sure we don't disappoint."
 
The real focus is on growing multichannel customers, because they are worth seven times the amount of an online customer that only shops online, and two and a half to three times the amount of a customer that shops only in stores. The goal is to be able to get customers to shop in both channels, and that is the holy grail. "We look at them as seamless, as really one big channel, and don't really differentiate that much," said Dyer. "But we want them to shop everywhere that we can attract them."
 
To best create a seamless experience, Chico's is testing iPads in boutiques – thus far, the results have been very promising. The iPads help to empower associates with customer's purchase history and personalized suggestive selling options, enabling associates to create an impactful assortment specific to each customer's wants and needs. The devices have been rolled out in the retailer's top boutiques, with plans to expand to additional boutiques in time for the holidays.
 
"In the end, the things that set us apart from our competition are our innovative, unique, trend-right fashion and our most amazing personal service, which we provide to our customers," said Dyer. "We remain committed to making the strategic investments in omnichannel, store growth and international that will enable us to win over the long term."
 
Chico's is still opening 100 net new stores next year, closing only about 20. "We're pedal to the metal on it, and we're still going to be very aggressive in store openings as we get into 2015," continued Dyer.
 
"At Chico's FAS, we play to win," commented Dyer. "We have the right formula to win, we have the right people to win, and where we see opportunities for improvement, we have the flexibility and nimbleness to course correct."