The all-accessories retailer has exploded on the scene, opening almost 100 stores since 2004 with 65 more planned this year.
‘‘We call it the cell phone effect,” says GMM Kasia Romo about a phenomenon that happens almost daily at Charming Charlie stores around the country. “This is where a customer enters our store for the first time, browses some items, flips over a tag to see the price, gasps, then calls a friend on her cell and screams ‘YougottagetoverhereRIGHTNOWandcheckthisout!’” Bonus points if she snaps a photo of something with her cell phone and emails or posts it to a social media site.
While this might sound superlative, anyone who has checked Charming Charlie’s Facebook page lately (86,000+ fans) knows this is no exaggeration. Comments like “I’ve died and gone to accessories heaven!” or “I want to move in!!!!!!” are the norm, and as most posts beg for a store in their zip code, Charming Charlie just added a “new store openings” link on its website. What gives? Who is this Charlie and how is he charming his way into so many women’s closets?
Charming Charlie was founded in 2004 by Charlie Chanaratsopon, a Houston-based businessman then in his mid 20s who grew up around his family jewelry business. For his application to Columbia Business School, he impressed the admissions board by using his first Charming Charlie stores in Houston to illustrate his entrepreneurial skills. Upon graduation, he rapidly channeled his MBA knowledge into a chain of 96 stores, with 161 planned by year’s end. The goal is continued aggressive growth.
His formula? A mix of upscale décor and downscale prices combined with a unique merchandising strategy. Large-format stores (8,000 to 14,000 square feet) carry trendy-yet-accessible accessories that retail from just $4.97 to $49.97. Elegant chandeliers hang from the ceilings and merchandise setups are clean, neat and organized. The biggest point of differentiation is that assortments are grouped by color, not classification.
The formula works. Tens of thousands of gushing Facebook comments aside, Charming Charlie has already earned more professional accolades than many veteran retailers, including:
- The ISCS (International Council of Shopping Centers) Retailer of the Year 2010 Award.
- A ranking of 656 on the 2010 Inc. Magazine’s Top 5,000 list, which ranks the nation’s fastest-growing private companies;
- The 2010 Marketer of the Year Award in the Retail category from the American Marketing Association Houston. The chain is currently in the running for Marketer of the Year in all categories.
- An Ernst & Young Entrepreneur of the Year 2010 Award, which went to CEO Charlie Chanaratsopon.
Despite a few apparel pieces in the mix, Charming Charlie is truly all about accessories. Fashion jewelry (including sets, necklaces, earrings, bracelets, rings and watches) comprises 50% of the business, while the remaining half is a mix of handbags (the second largest classification), shoes (flip flops, sandals), and fashion accessories (scarves, hats, leggings, tights and cold weather). Other classifications include eyewear and hair accessories. Cosmetics, fragrance and lip gloss are under consideration.
Charming Charlie’s research shows that the average customer spends considerable time in the store and on average spends over $20 per transaction. With “everyday low pricing” as low as $4.97 (all prices end in .97), multiple purchases are obviously in the business model.
Customer service is another point of differentiation, and “greeters” meet each customer at the entrance, asking her if she’s ever been to a Charming Charlie before and explaining the color-themed layouts. Since store size and assortment can be daunting, sales associates make themselves available for accessorizing assistance. “Many women come in wearing an outfit or carrying a dress for a special occasion, and they ask us to help accessorize them,” says Romo.
It pays for each store to really know its customer, as Charming Charlie’s upper management gives individual stores lots of leeway in merchandising. “We give them direction to the front two tables and the key two trends, but once those sell out, it’s up to the stores to decide what to put there,” says Romo. “We have so many skus and there are lots of opportunity to be creative. We’ll provide guidelines—like displaying earrings smallest to largest—but we don’t do planograms.”
So who are the women so important to Charming Charlie? When the initial concept was launched, the retailer thought it would be targeting the 35-to-55 year-old woman; someone who isn’t a fashionista per se but still appreciated fashion and would buy a $15 necklace. But Charming Charlie found Boomers, GenXers and GenYers shopping side by side, often in mother/daughter pairs, where each could find something for herself. “We’re not the trendiest but we ride that fashion curve,” says Romo. “When looks hit the magazines, we have that interpretation. We’re not the fashion leader but we’re not that far behind.”
For the ever-important ‘tween customer, Charming Charlie also has a line of younger-geared merchandise called Charlie Girl, complete with their own hang tags. It also set up Charlie Girl shop-in-shop concepts as well as adjacent free-standing stores—currently in 10% of locations—and is assessing the approach. “We did a focus group to see what age range we wanted to pursue, and we found girls from younger ‘tween customers loved the Charlie Girl product,” says Romo.
As Charming Charlie strives for a “fun” shopping experience, it also has a lineup of varied in-store events to capture that energy. These are an important part of the model.
The majority of the merchandise is private label, branded either Charming Charlie or Charlie Girl. The retailer works closely with a broad array of vendors, either on developing merchandise or tweaking items from the line. Not surprisingly, the chain also does its own direct sourcing, particularly on basic items like hoops or shell. “Our customer—particularly our Southern customer—loves shell,” says Romo. “We can do it 20 different ways at all pricepoints and she’ll buy it without hesitation, so it makes sense to do those items as direct import.”
Charming Charlie also carries $15 to $50 shoes (flip flops to boots), which are stacked in cubbyholes, requiring little to no sales assistance.
With such a big store, customers have their own shopping method. “According to our surveys, there is that customer who walks the whole store and puts things in her basket, then lays out what she found, looks it over, then decides what she wants,” says Romo. “In many cases, she takes the full run.” Inexpensive prices allow it.
Charming Charlie’s business model budgets limited dollars for advertising, relying on word-of-mouth instead. A look at their Facebook page bears this out: the buzz about the store was actually driving customers across state lines.
“People were hearing about Charming Charlie from friends or family who lived near our stores, and they would check us out while home for the holidays,” says Romo. “We launched a gift card on our site and found women were still buying them for gifts or to keep for themselves when they were in the area.” The Facebook feedback also helps Charming Charlie ascertain which new cities are viable markets. And in polite Texan form, store management answers most Facebook queries on the site, especially those asking about future locations.
The web is obviously key. Charming Charlie is eyeing e-commerce, but for now its fun, interactive website and social media entities are what drive customers to the site and keep them coming back.
The website utilizes blogs to actively engage the consumer, giving her quizzes (“Patterns & Textures Quiz), contests (“Sports Mom of the Year”), DIY craft tutorials (“How to Decorate a Frame with Fashion Jewelry”), styling tips (“Accessorizing for a Job Interview: What to Wear and What to Avoid”), care tips (“How to Protect and Care for Faux Pearls”) and fun polls (“What’s Your Favorite Frill Factor?”).
From posts of Charming Charlie’s Fashion’s Night Out Photo Contest to Outfit of the Day videos showing customers talking about their Charming Charlie accessories, the feeling is One Big Happy Family, where everyone helps each other look as fabulous as possible. Viewers are invited to comment on the outfits featured, or share the videos with friends. “We do a lot to foster a sense of community both online and on our Facebook,” says Romo. “We’re exploring many new ideas. There are lots of new opportunities, lots of new apps. It’s all very exciting.”