With a focus on store innovation and enhancing its omni-channel retail strategy, Chico’s has successfully rolled out RFID at 13 Soma Intimates pilot stores.
After deploying RFID infrastructure from Tyco Retail Solutions, Soma associates can now access real-time inventory information and better manage merchandise to drive increased sales and shopper satisfaction. Ken Silay, director of technology, research and innovation for Chico’s, says that the new level of inventory accuracy has helped store associates to provide an enhanced customer experience.
Chico’s, specialty retailer of private branded women’s fashion items, also owns the White House | Black Market and Boston Proper brands. Company executives are studying pilot results to determine whether to roll out RFID to the all 206 Soma locations, or if it makes more sense to deploy to its other brands.
“Our core value remains consistent; to provide the most amazing customer service,” says 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 omni-channel 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.”
The RFID initiative delivered strong results, as weekly store inventory counts enable Soma to maintain 90-95 percent accuracy every day so associates can easily fill in needed merchandise.
Prior to RFID, many Soma stores were not confident about their inventory levels, since intimate apparel merchandise is heavily style, size and color-oriented, making it difficult to keep full assortments in stock on the sales floor. The new levels of accuracy helps ensure that customers will have what they desire when they want it and prevent shopper disappointment.
Soma also gained insight into store loss prevention. Although shrink had not been a significant problem for Soma, with RFID read points at door exits, they gained insight to specific items lost, noting exactly when (and if) they left the store.
Chico’s used a very systematic approach to exploring RFID and learning its benefits. The process started by tagging product samples at its corporate headquarters so the company could have better visibility into where samples were as merchants determined which items to carry in future seasons.
Chico’s enlisted the help of Tyco Retail Solutions when the RFID tagging project was expanded to an employee-only store on the Chico’s campus. Tyco installed fixed infrastructure for receiving and to document movement from back to front. The solution also included a reader POS and a couple of hand held readers.
“The goal was to test this out to see what item level visibility meant for Chico’s,” says Jamie Kress, director of sales and strategic accounts for Tyco Retail Solutions.
“They really used that store as a playground to figure out how they might use it and to take their executives through and give them ideas as to how it might impact areas of their business. Merchants went through to see what RFID does from a merchandising angle, and we took LP through so they could better understand it, and of course store operations.”
After six months, Chico’s wanted to see the technology at a live store, so the first pilot store was rolled out in Naples, Fla. Products headed to that store were tagged with Avery Dennison tags at Chico’s DC in Atlanta. The store used handhelds to receive the items, and a fixed infrastructure solution between the back and the sale floor provided the real-time visibility needed to replenish the sales floor. The store also had a reader POS and a front exit read point.
“We had lots of infrastructure in the store so they could get the full scope of what RFID could do for them,” says Kress.
Once Chico’s witnessed the inventory accuracy gains, the decision was made to develop an understanding of how RFID would scale across a wider store network. Chico’s identified 12 stores and chose team captains in each region to lead deployment efforts and to makes sure best practices were followed.
The focus of the pilot over the last 12 months has been to understand how to prioritize benefits, the ROI model, and how move forward across the enterprise. “The focus over the past year is putting together an optimal model for moving to the expanded set of stores,” says Kress.
One key benefit has been integrating RFID reads and overriding Chico’s legacy file with RFID data so the retailer can see the impact that RFID provides. The company is seeing more accurate replenishment from the DC to the store, and other stores in the pilot program can model that process to gauge how proper replenishment impacts individual store financial models.
Chico’s has also gained a better understanding about the product categories that can provide the highest benefit from being tagged.
“There was a feeling early on that RFID benefitted the basic and replenishment categories to a much higher degree than the fashion sector,” says Kress. “But the fact that Macy’s and others are seeing the benefit in fashion has gotten lot of attention, not only from Chico’s but from all of my other customers.”