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Chico’s FAS Triples Down on Digital With New Tech Investments

Chico’s FAS, Inc., parent company of the Chico’s, White House Black Market and Soma brands, is deploying not one, not two, but three technology providers within its e-commerce offering in an effort to accelerate its digital transformation strategy. In October, the company partnered with Salesforce, Afterpay and Contentstack to modernize and personalize the digital experience for its customers and boost customer lifetime value.

During the holiday season, these collaborations are expected to leverage customer relationships to maximize marketing campaigns, fuel customer acquisition and establish a single 360-degree view of customer data to create relevant communication.

In bringing in the San Francisco-based CRM giant Salesforce, Chico’s FAS is seeking to deliver lifecycle marketing using predictive intelligence that can optimize messaging to each customer across all channels. Chico’s FAS is using Salesforce to develop a single platform with a unified view of its customers through customer data that has been collected for more than three decades, including leveraging its loyalty program.

Chico’s FAS is now the latest apparel name jumping on the “buy now, pay later” craze with the Afterpay implementation, which the company says took just eight weeks.

Building on the retailer’s continued desire to bring personalized content to the consumer, Chico’s FAS will leverage the Contentstack content management system to bring content to consumers based upon personal preference, region and weather. With the platform, content editors can build and edit dynamic pages within the CMS without needing a developer’s help.

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The Covid-19 pandemic forced Chico’s FAS, like many retailers, to empower digital technologies in a way they never had before. Ahead of its store reopenings, Chico’s deployed handheld devices incorporating the retailer’s proprietary digital styling software called Style Connect in a move supporting e-commerce. The software enables store associates to communicate directly with customers and drive the front-line business to digital fulfillment. Style Connect sales grew over 50 percent year over year for the second quarter.

In conjunction, Chico’s FAS executed a soft launch of its personal closet feature, an online personalized functionality that enables customers to shop online to coordinate new purchases with what they’ve bought in the past. Since the conversion rate for this new feature showed a 6X conversion lift versus the site average, Chico’s FAS accelerated the formal launch, which was originally planned for 2021, into this year’s third quarter.

For the second quarter, year-over-year digital customer count grew nearly 55 percent and conversion was up 100 basis points. Total second quarter digital sales grew “substantially” with the apparel brands growing by “double-digit” increases and Soma generating growth of over 70 percent.

“Customers’ behaviors are changing, and we have developed a customer-first model where the customer is the channel,” said Molly Langenstein, CEO and president, Chico’s FAS, in a statement. “As we innovate how we seamlessly engage with and serve her, we will continue to undergo continuous optimization of the digital experience across all of our brands to forge deeper relationships, accelerate growth, drive greater profitable sales and gain market share.”

Chico’s FAS certainly isn’t alone in trying to bring its retail operations up to speed digitally, with New Balance bringing end-to-end technology provider Aptos on board to increase channel interaction and optimize merchandising and order management, among other things, across North America and Europe. The athleticwear and footwear company also recently implemented AI-powered fashion trend forecasting and demand sensing technology Stylumia to improve inventory management on a global basis.

Earlier this month, Charlotte-based department store Belk, not known for its digital presence, started offering same-day delivery through e-commerce. And David’s Bridal, another retailer that has traditionally relied on brides-to-be to come in and try out wedding gowns, is now bringing these shoppers a full 360-degree view of an array of wedding gowns online via technology powered by 3D and augmented reality technology provider Vertebrae. This adds onto the retailer’s continued digital push which includes partnerships with installment payments platform Affirm and digital wallet Popwallet.

The digital transformation for Chico’s FAS has been going on for more than a year now. Langenstein had already been trying to turn around the Chico’s and White House Black Market brands when she was president of the banners from August of last year through May before being promoted to CEO and president of Chico’s FAS. The overall company had been struggling significantly prior to her hiring last year, and committing to closing 250 stores through 2021.

Net sales across all brands during the second quarter fell 39.8 percent to $306.2 million from $508.4 million in the year-ago period, which the company said represented a 9.2 percent improvement from the first quarter. Chicos FAS  company attributes the improvement to strong digital sales and the reopenings of its nearly 1,400 stores, all of which were closed in North America.

Net loss grew to $46.8 million, or 40 cents a diluted share, versus a net loss of $2.3 million, or 2 cents, in the year-ago quarter.

And the company’s Canadian subsidiary filed for bankruptcy in July, with four Chico’s stores and six White House Black Market boutiques in Ontario all shuttering for good as part of the retailer’s cost-cutting measures. Canadian customers can still shop the various Chico’s FAS-operated websites.

Chico’s FAS was the recipient of numerous awards from Newsweek last year for “America’s Best Customer Service,” ranking Soma No. 1 in the brick-and-mortar lingerie category while Chico’s ranked second in the women’s apparel category. Additionally, Chico’s, Soma and White House Black Market all ranked within the top 10 percent of online retailers in the women’s fashion category in Newsweek’s 2020 list of “Best Online Shops.”