Chico’s overhauled its back-end systems using Manhattan Associates for its buy online pick up in store and ship-from-store capabilities. Stores now fulfill 10% of all online orders, and even more during the holidays, Chico’s said at the Manhattan Momentum conference.

Curve balls became the norm for Chico’s FAS Inc. during its buy online pick up in store deployment project.

But after roughly a year that included a hurricane and renegotiating its shipping carrier contract, the apparel retailer successfully deployed buy online pickup in store and ship-from-store capabilities chain-wide at its 600 Chico’s stores, 400 White House Black Market stores and 300 Soma lingerie stores in Q2 of 2019.

The goal of the project was to become a stronger omnichannel retailer, Marcela Quintana, manager of omnichannel strategy and operations at Chico’s, said at the Manhattan Associates Momentum Conference in Phoenix in May. The retailer had an “old and homegrown” back-end system, she said.

“[The old system] would not be able to sustain growth that we would want to have in omnichannel,” Quintana said.

Chico’s updates its back-end systems

To do that, it first needed to build a foundation. In November 2017, Chico’s embarked on this by enhancing its omnichannel operations. For example, it started allowing shoppers to return online orders to a store and allowed store associates to place an online order for a customer in store, such as when a shopper needed an item in size or color that the store did not have. At this time, Chico’s processed about two to three of these orders a week, which it thought was pretty good, Quintana said. Now, the retailer knows that its stores should have been shipping much more than three orders a week, she said. For example, when it initially rolled out the feature, a single store fulfilled 80 orders in just the first day.

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However, to implement ship-from-store on a larger scale, the retailer needed to expose its store inventory to its website shoppers, as ecommerce shoppers only could see inventory that was available in its distribution center. This required the retailer to marry its back-end systems. Chico’s already used Manhattan Associates warehouse management and supply chain intelligence services, and it added the vendor’s store inventory management, inventory visibility and store fulfillment services and integrated them into one another. Now, Chico’s has seven ecommerce, retail and back-end software systems—such as its store point-of-sale system and customer service portal—flowing into Manhattan Associate’s order management and store operations systems.

Now that Chico’s has all of these systems flowing through Manhattan, it has one book of record for inventory, instead of four different places. After this, Chico’s says its inventory accuracy increased by 15%.

Training store associates and change management

Chico’s also needed to train its store employees to ship orders from stores, as well as update its systems to allow employees to efficiently do this. These changes were not easy, Quintana said.

The key, Quintana said, was involving store managers from the beginning, getting their input and incorporating their feedback.

For example, Quintana spent weeks at stores to learn the daily routines of store associates and to test how the software would look for them. In this pilot state, the retailer pushed real orders to a store to start fulfilling the orders as it was building out the system. Quintana herself used the software in its beginning stages to try and fulfill an order for a “multicolored T-shirt.” In a larger store, it took her 23 minutes to find that one T-shirt for the order. As it turned out, the “multicolored T-shirt” was a white shirt with a colorful parrot on it. If she had known that it was the parrot T-shirt, she could have found it in a few minutes, Quintana said.

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“We told Manhattan that we needed images, and we needed the images to be in color, and images that you can zoom in on so you can see the details on how it looks,” she said.

Zooming in is especially important for its White House, Black Market site, which sells a lot of similar-colored shirts, or for bras and panties, that only have small differences in details, she said.

From her in-store experience, Quintana also realized how important it was for associates to quickly and easily ship orders. Before it deployed this system, employees had to type in a 24-digit order number into a shipping label at a computer at the front of the store, which would print out in the backroom. And so, Quintana went back to its technology team to have the order software automatically print the shipping label with the order number pre-populated to minimize data entry errors and save time. Plus, Chico’s invested in more than 2,900 iPads for its store associates, so they can work on shipping online orders wherever they are in the store and not be bound to a desktop computer.

Before the technology went live, Chico’s flew its district manager to its headquarters to help develop training materials for the retailer to distribute to associates and conduct mock training sessions.

Still, change is hard and it is often tough to get associates on board with these new tasks, she says. “It’s selling through the front door and the back door, and they understood that,” Quintana said.

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“They love fulfilling marked-down product. They don’t love fulfilling full-price product,” she added. This is because when marked-down product moves out of the store, there is more room for the store to stock newer, full-priced merchandise, which if an associate sells, she gets a commission on. When associates ship online orders from stores they don’t receive a commission, so they naturally don’t like to ship expensive products from stores.

Chico’s has not changed the store associates’ compensation structure, which typically relies on sales commissions, although it is considering having an “omnichannel bonus,” Quintana said, without revealing more.

With the software rollout, Chico’s also allowed employees to update store inventory levels in the system. This also contributed to the 15% improved inventory accuracy, Quintana said.

Stores fulfilled about 2.2 million orders in its 2018 fiscal year, far surpassing its goal of 1 million orders, she said. About 90% of online orders ship from its distribution center and about 10% from stores. However, during the holiday season, 30% of web orders were fulfilled from stores.

“We would not have hit our Cyber (week) goals without ship from store,” said Quintana, referring to the period around Thanksgiving.

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Chico’s FAS Inc. is No. 123 in the Internet Retailer 2019 Top 500.

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