Carter’s Conquers Omnichannel With RFID, POS Projects
Children’s apparel retailer Carter’s Inc. is emerging from the pandemic a stronger, more profitable, omnichannel enterprise, armed with new point of sale (POS) and RFID capabilities.
During a recent Q3 earnings call, executives from the $3.0-billion company reported that it is on track with a project to replace POS systems across its enterprise of more than 1,000 company-owned stores. The initiative, which began in the United States, includes the rollout of new software as well as the replacement of legacy hardware. The new system is expected to drive a number of benefits, including a significant reduction in checkout times and increased integration of in-store and e-commerce experiences for consumers.
“Our initial experience has indicated it is as much as 50% faster,” reported Richard Westenberger, executive vice president and chief financial officer, Carter’s Inc. The project will ultimately enable other innovative initiatives, including marketing personalization.
Westenberger continued, “These marketing personalization capabilities are intended to drive stronger, more enduring and more profitable relationships with our customers.”
In another step toward omnichannel domination, Carter’s Inc. announced the completion of an initial deployment of RFID-tagged inventory and extensive training with its retail team. According to company chairman and CEO Michael Casey, this project is expected to yield higher productivity of inventory and faster shipping by leveraging more than 70% of Carter’s stores to fulfill online orders.
“Increasingly, our stores are providing a higher service level to our margin-rich online customers. Year to date, nearly 30% of our online orders were fulfilled by our stores,” said Casey.
Being able to accurately view in-store inventory means that if a customer placed an online order in Seattle, for example, through one of its e-commerce sites, Carter’s will be able to identify which store in the neighboring region will be able to fulfill the order faster and cheaper than if it were to come from corporate headquarters in Georgia.
“Our retail field team is very excited about this new technology and what it will mean in terms of better serving customers, in addition to the numerous operational and profitability benefits we believe it will drive over time,” said Westenberger.
With U.S. e-commerce penetration forecasted to be nearly 40% this year (up from less than 32% in 2019), the benefits enabled by the RFID rollout will be margin accretive to an already margin-rich e-commerce business.
“It’s some portion of about a $10 million investment, and we expect to multiple that investment in terms of return over the next five years,” closed Casey.
The RFID rollout, which was inspired in part by the company’s 20-plus year relationships with RFID giants, like Target and Walmart, is expected to continue into the next year.
For the fourth quarter of fiscal 2021, the retailer projects net sales will be approximately $1,025 million and for fiscal 2021, it projects net sales of approximately $3.45 billion.
“Our forecast for the year reflects materially better performance than we envisioned possible earlier this year,” Casey said in a press release. “Given the expected continued benefit of structural changes made in our business to respond to pandemic-related challenges, together with the strength of our product offerings and marketing strategies, we are raising our earnings objectives for the year and forecasting record profitability for 2021."