Le Chateau, the contemporary retailer with stores in Canada and New York, cut its shrinkage by $30,000 in eight months in one of its outlet stores with an unusual approach.
Last year, the Montreal-based company stopped counting items women were taking into the dressing room. Instead, it started scanning them.
Immediately, employees noticed far fewer ripped SKU tags (apparently from stolen garments) on the dressing-room floors. The number decreased from about 30 each night to fewer than six, said Franco Rocchi, Le Chateau’s vice president of sales and operations. Eight months later, the company realized its total shrinkage had dropped by $30,000 compared with the same period a year earlier, based on inventory and sales records.
Le Chateau doesn’t scan the garments coming out of the dressing room or track them in any way, but scanning seems to have a deterrent effect.
“It creates a sense of honor,” said Rocchi. “I think [customers] don’t understand it. They know there’s something going on with the computer, but they don’t know what it is.”
The new process is faster than the old one, so customers aren’t waiting longer for dressing rooms, he added. Le Chateau is in the process of rolling out the system, from Fitting Room Central, to two more of its 15 outlet stores. The system, which consists of a scanner, a touchscreen PC and software, starts at approximately $1,500, depending on how many a retailer orders.
Fitting Room Central can configure the system to give a retailer feedback on “conversion” rates, or what percentage of clothes tried on are subsequently bought. Shoppers can record their experiences on a touchscreen. The company is adding suggestive selling to the system. The new software, which is in development, is similar to Amazon’s “Customers who bought this item also bought…” and suggests additional items based on what items other shoppers have purchased together.
Le Chateau is considering both options for its regular stores, said Rocchi.