Epsilon to aid Chico's customer targeting

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Clothing retailer Chico's has expanded its relationship with multichannel marketing services firm Epsilon to add more services to gauge shopper behavior.

Epsilon has worked with the retailer since 1999, providing prospect lists and demographic data for the Chico's catalog. Under the expanded agreement, it will also provide data overlay services for the retailer, which operates the Chico's, White House/Black Market and Soma chains.

Epsilon will overlay its proprietary data over the retailer's database to give it a better idea of all customer activity for merchandise categories in stores, catalogs and online. Chico's plans to use it to microtarget customers based on buying behavior and to improve segmentation and marketing efforts, according to a statement from Epsilon, which is a unit of Alliance Data Systems Corporation.

Chico's posted strong results in the second quarter of 2010, nearly doubling its profits over the year-ago period. However, CEO David Dyer told analysts that sales fell short of expectations because Chico's stores switched to fall clothes too early and didn't have the right selection for local markets, while White House/Black Market stores ran short on inventory.

“We believe we left money on the table,” Kent Kleeberger, CFO, told analysts.

By sorting data over 20 demographic variables, Epsilon plans to improve Chico's target opportunities in specific markets and stores, based on local buying trends.

“Understanding our customers is critical to our marketing success. It's not just about what they're buying from Chico's but also their overall spending behavior,” said Charlie White, VP of CRM at Chico's, in a statement. “We're able to have a richer picture of each individual customer and in turn better target our customer base across all marketing channels.”

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