Chico’s FAS is turning to an up-and-coming source to aid it in its same-day delivery ambitions. Shoppers at the company’s Chico’s, White House Black Market and Soma brands will soon be able to get items delivered in as little as two hours via Walmart’s GoLocal delivery-as-a-service.
GoLocal launched on Thursday in select markets, including Chicago and Fort Myers, Fla., and will expand to other markets in 2022.
“Getting our customer what she wants, when she wants it, is another step in our ‘digital first’ customer centricity transformation,” said Molly Langenstein, CEO of Chico’s FAS. “Whether delivering a last-minute black dress, pair of pajamas or a new pair of jeans, partnering with Walmart GoLocal offers a convenient delivery option and yet another way we’re able to deliver on our promise of bringing women confidence and joy.”
As part of GoLocal, Walmart dispatches contract workers from its Spark delivery network, which launched in 2018, to merchants’ stores to pick up items and then bring them to shoppers.
Chico’s FAS had already offered same-day delivery, working with Roadie as of last year’s holiday season. Across the Chico’s, White House Black Market, Soma and off-price Chico’s Off the Rack websites, the brands indicate that same-day delivery is available on certain items if placed by 2 p.m. local time. The service is available seven days a week in select areas, and costs $10 extra per order.
But teaming with Walmart on the decision will definitely raise eyebrows, particularly amid the growth of other platforms such as Postmates, Uber Eats and Target’s Shipt. If anything, the GoLocal choice shows the faith put in Walmart’s delivery ecosystem, which extends to more than 20 million households.
The GoLocal API can integrate with a retailer’s existing e-commerce platform so that when a shopper places an order online, the platform immediately contacts Walmart to dispatch a driver. With the API, both Chicos FAS and Walmart can capture local delivery data that could aid in decision making regarding delivery routes and fulfillment center placement.
Walmart GoLocal has already established a number of contractual agreements with national and enterprise retail clients, such as The Home Depot and Sam’s Club. But Chico’s FAS marks the first foray into the apparel space for GoLocal.
The specialty apparel, accessories and intimates retailer has sought to bolster its digital capabilities throughout the Covid-19 pandemic, namely through the launch of products like Style Connect, the company’s proprietary digital styling tool that enables store associates to communicate directly with customers and drive the front-line business to digital fulfillment.
In late 2020, Chico’s FAS sought to modernize its digital experience with the implementation of technologies like CRM giant Salesforce, buy now, pay later provider Afterpay and content management system Contentstack.
Across its banners, the digital transformation effort appear to be bearing fruit. Total net sales for the third quarter rose 29.1 percent to $453.6 million, from $351.4 million a year ago, with Chicos FAS posting net income of $18.2 million on 15 cents per share. For the fourth quarter, the company expects net sales in the range of $495 million to $510 million, earnings per diluted share of between 0 cents to 5 cents, and a gross margin rate of 33 percent to 34.5 percent.
Langenstein is so bullish on the company’s Soma label that she called it a potential “billion-dollar brand” in the third-quarter earnings call.
“We’re excited to work with Chico’s FAS, Walmart GoLocal’s first fashion client, to bring added convenience to the lives of families in communities of all sizes across the country,” said Tom Ward, senior vice president of last mile, Walmart U.S. “Whether they’re shopping for something new for their closets or for their weekly grocery haul, we know customers everywhere are starved for time and hungry for convenience. The beauty of Walmart GoLocal is our ability to customize the service to businesses of all sizes and offerings and give shoppers time back, no matter what they’re looking for.”
The specialty apparel space got hit hard in the years leading up to Covid-19, with the pandemic finally forcing retailers like Chico’s FAS and others to adapt to omnichannel-driven experiences that cater to the “shop anywhere” mentality of today’s consumer. Same-day delivery is now a must-have for many stores.
For example, both American Eagle Outfitters and Abercrombie expanded the pilots of their same-day delivery options this holiday season. The former is scaling from 50 to 151 stores, and the latter took its trial from 40 stores to all 540 locations.
With same-day delivery, brands will have to be careful regarding their own volume capacity, and what promises they make. Even after the holiday season concludes, the supply chain woes that have impacted product delivery times are still expected to continue well into 2022.
Walmart, which is trying to grow market share as a B2B tech provider, seems to be taking notes from e-commerce king Amazon and how it has partnered with smaller sellers to offer fulfillment services via FBA or cloud services via AWS. Walmart has been diversifying its revenue streams with initiatives like its own advertising business Walmart Connect and Walmart Fulfillment Services.
The retail giant even made its marketplace and online/in-store fulfillment capabilities available within the Adobe Commerce and Magento Open Source platforms. Adobe’s U.S. retail clients can integrate Walmart’s technologies in their own storefronts starting in early 2022.