What Makes Chico's the Omnichannel Customers Dream

Chico's approach to marketing evolves each year, striving to break through all the clutter to reach current and potential customers in a more relevant and targeted way. To further this, come 2015 the retailer will invest in omnichannel in a meaningful way, including automation, cloud, new POS systems, RFID, customer engagement and mobile apps.
Seeing positive changes from these investments, the retailer anticipates even further gains in 2015 and beyond, as the initiatives are expanding even further and rolled out to even more boutiques. Gains include increases in transaction count, increases in conversion rate both online and in-store, and new store growth. Below we outline the initiatives and investments that help Chico's become every omnichannel customers dream.
Automation: Initial quantities for the quarter account for the floor set allocation and the anticipated online volume. After that, the remaining inventory goes to whichever channel sells it first – fulfilling initial store shipments, replenishment orders and direct-to-consumer orders from the same facility. On the same belt sortation system, the retailer can accommodate both store replenishment and direct-to-consumer orders, which is why it invested in the state-of-the-art automation in its distant distribution center – it provides the ability to take inventory and put it to whichever channel needs it, this is a distinct advantage that differentiates Chico's from its competitors.
Cloud Infrastructure: The creation of a cloud-based integrative platform has been on-going. While it's not glamorous, it is a fundamental foundational step, which will unite disparate systems and deliver a single version of the truth. The retailer has now brought together both the multiple systems, as well as their information, in a cloud-based integrated platform to include customer information, stores sales detail, online sales detail, shared inventory detail, on-order purchase detail, store replenishment detail and loyalty information. Overall, this information, combined with some marketing information and a single view of inventory will allow the retailer to stay agile as the market evolves.
Point-of-Sale: Moving on to store technology, the largest in-store technology investment in 2015 is the new, enhanced POS hardware and software. The new POS equipment will allow store associates to have access to much more customer data than the previous system, putting big data information into the hands of associates. The new systems will allow for mobile checkout, which is becoming more important to customers.
"Moving from POS to iPads, tablets have become a huge part of our daily lives, and Chico's FAS has turned this technology into powerful tools, which allow us to connect and engage with our customers and drive sales," said David Dyer, Chico's FAS president and CEO. "Our associates will be able to communicate directly with our clients through e-mail and texting, and they'll also easily be able to book styling appointments. While our style experts are wardrobing, we can use the tablet to open up the endless aisle of online exclusives, providing our customer with even more amazing personal service and more style choices. The beauty of how we have designed these tools is we've created a two-way communication forum, allowing our associates to input information they know about their customers into our digital client book app."
Technology Tables: These interactive touchscreens bring the entire assortment into the boutiques, including merchandise previously only available online. The tech tables also allow the retailer to access additional brand content, which aids the associate in customer interaction. The technology running these tech tables was developed internally and the software remains proprietary to Chico's. A variety of tech table designs are being tested and the retailer will update and improve what is already a very highly successful and innovative tool as need be.
RFID: To help improve inventory accuracy, RFID technology is being tested in Soma stores. This will allow the retailer to leverage buy online and reserve or pick up in-store capabilities without the customer disappointment currently encountered due to lack of accuracy in inventory.
Mobile Apps: High-quality mobile applications for iOS and Android are also in development. These apps will offer increased levels of engagement on her PDA. The mobile-optimized experience will allow her to shop and interact. Customer engagement through a single voice is paramount, whether communicating with her in-store, through direct mail or website, e-mail, TV commercials, digital signing, print, Facebook, Twitter, and even a fashion blog.
Customer Engagement: The final and most important omnichannel bucket is customer engagement, or how the retailer communicates and interacts with its customer on her terms. "We want to provide our customer with her very own customer command center, customer control center," continued Dyer. "This is going to allow her to be in control with everything she does with us. We believe in bringing this infrastructure and store technology investments together will drive future sales and margin."
While some of these customer engagement technologies are currently operational, others are still in development. The retailer is leveraging a customer-centric strategy on engagement, rather than a channel strategy. Where the customer is bombarded, Chico's will use personalization, communicating insights to her based on her preferred content and what she's most interested in. How she receives this information will be her way also – does she want it via e-mail, does she want a phone call, does she want special incentives to get her to shop – everything is personalized to her.
Looking at engagement through the lens of the customer has been Chico's guiding principle, focusing on what she's providing by her actions and the way she shops has provided the retailer with a solid roadmap. The retailer is well-positioned in this changing retail environment as a result of its loyal customer base, omnichannel investments, and the continued opportunities to expand by developing and growing new product categories. "This is a powerful combination for Chico's FAS that really puts us in a very enviable position for the long term," concluded Todd Vogensen, CFO and SVP of finance for Chico's FAS.
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