A Retail Case Study
Reprinted from Retail Touchpoints 2014 Holiday Guide
When it comes to making women look and feel beautiful, Chico’s has it all covered. For 30+ years, Chico’s FAS, Inc ., has served the lifestyle needs of fashion-savvy women. Today their portfolio consists of four popular brands: Chico’s, White House | Black Market (“WH|BM”), Soma Intimates (“Soma”), and Boston Proper.
Before opening in 2004, Soma envisioned shopping in a place that caters to what women really want. They imagined a unique destination where intimate apparel is not only beautiful and sensual, but also soft and comfortable, to fit every woman’s body. Driving their vision was the mission to become a place known for warm, personal service. And so began Soma Intimates. More than 200+ boutiques later, Soma continues their quest to know their customers more intimately by creating fashion-forward products women desire—and once discovered—cannot live without.
Use Of Innovation In The Store And Customer Engagement
Chico’s formula for deeper customer engagement is transforming through innovation—from breakthrough fashions to cutting- edge technology store associates use to better service customers. They have enriched the customer connection by evolving into an omnichannel retailer, recognizing the importance of inventory accuracy to meet customers’ changing needs.
According to Ken Silay, Director, Technology, Research and Innovation for Chico’s, “our transformation as an omnichannel retailer is based on having the right network technology platform in place, laying the foundation for RFID item-level inventory accuracy. Our associates can access accurate inventory information, fostering confidence to create a better customer experience.”
Omnichannel Strategy And The Customer Experience
An innovative omnichannel retailer, Chico’s is focused on enabling customers to shop anywhere, anytime, anyhow. Having visibility to accurate and timely inventory availability is a mandate across all channels and locations to achieve omnichannel success. Inventory visibility is the fundamental necessity of modern retailing to support omnichannel initiatives and assure the right on-floor availability to help build shopper satisfaction and drive sales. Chico’s Soma stores’ use of RFID technology currently provides visibility to items across all pilot stores and distribution centers, and within the store, extending from receiving to customer, and through the exit door.
“This core value remains consistent: provide the most amazing customer service,” continued Silay. “Innovation is an integral part of our mission to create a great customer experience. With RFID-based inventory intelligence, we can enhance the opportunity to have the right product available at the right place, at the right time to satisfy our in-store and omnichannel shoppers. Increasing our inventory accuracy helps minimize lost sales and out-of-stocks, keeping our customers happy and associates more productive. On our journey we’ve discovered innovation is always in fashion.”
Traditionally for retailers, annual inventories are costly and potentially disruptive to their daily business. With Soma’s relatively few physical inventory counts each year, accuracy could steadily decline over the months until the next inventory. Accordingly, their stores did not have confidence in their inventory numbers. Since intimate apparel is heavily style, size and color oriented, keeping a full assortment always available on the sales floor was labor intensive. The current replenishment process was difficult, lacking accurate inventory visibility on the floor and in the backroom. When associates received shipments they only knew what was in each box by opening it, making it challenging to best serve their customers.
Soma launched an RFID pilot project with Tyco Retail Solutions in 13 of their stores to address inventory accuracy and visibility challenges. Their real-time RFID inventory store solution focused on a variety of inventory management processes including weekly cycle counting versus previous annual fiscal inventory, store receiving, daily sales floor replenishment, product location assistance for replenishment and customer service, and exit door monitoring. Soma will deploy a new point of sale (POS) system next year and then add RFID POS transactions.
Soma’s RFID inventory initiative delivered compelling results in the pilot store group. Full store inventory counts conducted weekly enable Soma to maintain 90% to 95% accuracy every day. With RFID read points at door exits, they realized a bonus benefit of greater insight to loss items. While shrink previously had not been a significant problem, they gained insight to specific items lost and exactly if and when they left the store. Through automated daily replenishment of the sales floor, associates can now easily fill in needed merchandise to ensure customers will have what they desire when they want it to prevent customer disappointment.
Even before unpacking items, associates now have visibility into daily shipment receipts for better insight and access to enhance personal service. Having greater inventory accuracy and visibility has increased Soma’s store associates’ confidence. They are passionate about the new RFID capabilities because it empowers them to do their jobs more effectively and efficiently to assist customers for maximum service.
Soma’s focus on accurate inventory lays the foundation for omnichannel retailing for their customers. RFID technology supports Soma’s upcoming plans to drive visibility into the entire supply chain from the manufacturer to the customer. Ultimately, what sets Soma apart from the competition is their focus on innovation to deliver a compelling customer experience.