Chico’s is a chain that takes a unique approach to brand differentiation. Not only does this women’s boutique produce its own clothes, it actually creates its own sizes. Instead of traditional US sizes, such as 4/6, 8/10, 12/14, or 16/18, Chico’s features these corresponding sizes: 0, 1, 2, 3. The reason, says Chico’s, is “our focus on comfort. …the difference is in the versatility. Chico’s clothing is made to wear how you like it to fit. If you like a little room, go for a bigger size.”
This simple yet dramatic change in a sizing convention is one of several strategies that have helped Chico’s grow dramatically. Another of Chico’s brand strategies has been appealing to the baby boomer market. This approach escalated to a new level after the 2008 Olympics. The success of Michael Phelps at the Olympics is now legendary, but just as memorable were the television shots of his mother, Debbie Phelps, cheering him on. It turns out that Ms. Phelps is a big Chico’s fan—and that opened up an opportunity for her to become an official Chico’s spokesperson.
“The arrangement reflects a broader attempt by mainstream fashion companies to capitalize on real people in the limelight who wear their clothes,” said The Wall Street Journal (“Olympic Mom Fits Bill for Chico’s,” September 3, 2008). In fact, says The Journal, “The deal comes as the women’s apparel retailer… is attempting to refocus on its core baby-boomer customer after analysts say it tried to broaden its appeal to younger women.”
Phelps was, legitimately, both a baby boomer and a Chico’s customer, but obviously she never would have been chosen as a paid endorser had she not been Michael Phelps’ mother and achieved such high visibility during the Olympics. Chico’s scored another public relations coup when Michelle Obama made public the fact that she was wearing a dress purchased at White House/Black Market, a Chico’s-owned boutique chain.
These are the kinds of promotional opportunities private label brands crave. In the past, the approach has been for specialty clothing brands to be connected with famous designers or celebrities. Now, though, chains like Chico’s are seeing the value of a different type of endorsement. Referring to Debbie Phelps and Michelle Obama, Chico’s spokesperson Jessica Wells told The Wall Street Journal: “We thought, ‘Wow, these are real customers. Let’s talk about it.’ To shoppers, to real women, they feel authentic.”
Special sizes, a comfortable fit, and care-free, exclusively designed fabrics all appeal to baby boomer women. These attributes are coupled with an attitude towards service so essential to Chico’s brand strategy that the company has trademarked it as “Most Amazing Personal Service.” Store associates are specially trained to provide their customers with assistance and advice, not just in picking the right clothes, but in coordinating complete outfits.
Chico’s also makes excellent use of customer loyalty programs (called “Passport” in Chico’s boutiques and “The Black Book” in White House/Black Market boutiques) to encourage repeat purchases. The programs include discounts, special promotions, and invitations to private sales events. The Passport program reportedly has more than 3 million members who account for over 80 percent of sales at Chico’s boutiques.
Chico’s success as a store brand has been considerable. The chain began as a single boutique selling Mexican folk art and cotton sweaters on Sanibel Island in Florida in 1983 and expanded to some 655 Chico’s brand boutiques today, along with over 340 White House/Black Market boutiques and over 70 Soma Intimates boutiques owned by parent company Chico’s FAS. Chico’s operates its three branded boutiques throughout the US, as well as in the US Virgin Islands and Puerto Rico.
Chico’s also believes in and is committed to charitable giving, focusing on organizations whose major purpose is serving women and children. Chico’s has made donations in support of such causes as promoting the empowerment of women, stopping violence against women and children, and supporting early education and reading programs. The company designed a “Heartfelt Pin” and through its sale raised US$ 200,000 for the American Heart Association.
Chico’s, along with such competitors as Ann Taylor, Gap, and Talbot’s, has not been recession-proof. It has put a freeze on opening additional stores and, in fact, has been forced to close a handful of stores and lay off staff. Still, if its core audience continues to remain loyal, Chico’s is one retail brand that has the potential to fight its way through the current downturn. It is true that Chico’s has made efforts to broaden its audience by appealing to a more youthful demographic, but it is the baby boomer women who are likely to keep this brand strong in the future.