Rainbow Shops Digital Transformation Strategy

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Rainbow Shops Digital Transformation Strategy

Key Takeaways

  • The Rainbow Shops is a Brooklyn-based size-inclusive fashion retailer established in 1935, with over 1,000 locations across the United States, US Virgin Islands, and Puerto Rico.
  • In September 2021, Rainbow Shops embarked on a data-centric strategy for its omnichannel commerce, undertaken to support a 900% growth.
    • According to David Cost, VP for Digital and Ecommerce at Rainbow Shops, Rainbow Shops “adopted SoundCommerce to solve a specific data unification problem during our e-commerce replatforming. In the process, SoundCommerce became a strategic and company-wide data solution for Rainbow. We now have a cloud data warehouse in place for the long term, aligning our work with our most important success metrics and KPIs.”
  • According to ZoomInfo, the top competitors of Rainbow Shops include Cotton On Group, Papaya Clothing, Cato Fashions, and Sussan Corporation.

Introduction

We have provided Rainbow Shops' Digital Transformation Strategy in this report. Our presentation has been summarized under three main headings; Overview of Rainbow Shops, Digital Transformation Strategy, and Major Competitors of Rainbow Shops. Following our extensive search, we could not find information on the company's funding history. We have presented our findings and additional information in the Research Strategy section below.

I- Overview of Rainbow Shops

1. About the Company, Annual Revenue, and Products offered.
  • The Rainbow Shops is a Brooklyn-based size-inclusive fashion retailer established in 1935. Presently, it has over 1,000 locations across the United States, US Virgin Islands, Puerto Rico, and its online RainbowShops.com platform, with $1 Billion in revenue.
  • According to Bloomberg, Rainbow owns and operates a chain of apparel stores, retailing "dresses, tops, sweaters, blazers, jackets and coat, jeans, skirts, pants, leggings, shorts, lingerie, shoes, hosiery, jewelry, and accessories."
  • According to Zippia, Rainbow Shops make about $140 million annually.
2. Rainbow Shops' Corporate Values and Missions
  • Rainbow Shops promises "affordable Clothing, Shoes, and Accessories for Women, Juniors, Plus Sizes and Kids; 'Fashion at prices you'll love.™'
  • The mission statement of Rainbow Shops; "As the Leading Retailer in the markets we serve, we respect and value people, product, and performance to ensure that the customer is our main focus."

II- Digital Transformation Strategy

3. Recent Strategic Initiatives Related to Digital Transformation.
  • In September 2021, Rainbow Shops embarked on a data-centric strategy for its omnichannel commerce, undertaken to support a 900% growth to witness a 44% compounded annual growth rate over six years.
  • According to David Cost, VP for Digital and Ecommerce at Rainbow Shops, Rainbow Shops “adopted SoundCommerce to solve a specific data unification problem during our e-commerce replatforming. In the process, SoundCommerce became a strategic and company-wide data solution for Rainbow. We now have a cloud data warehouse in place for the long term, aligning our work with our most important success metrics and KPIs.”
  • According to the publication by Yahoo Finance, this digital strategy was adopted to "unify and activate data across e-commerce storefront platforms, balance profitability and customer lifetime value with every action, and take control of turnkey modern cloud data warehouse."
  • In November 2020, PR Newswire reported that the company adopted the Kustomer CRM platform to support its efficient and seamless customer experience efforts. Three weeks into the implementation of the strategy, Rainbow Shops witnessed a 60% Abandon Rate reduction, enhanced agent satisfaction, and a modernized customer experience.
  • Following this digital intervention, Michael Hoffman, Director of E-Commerce & Customer Service at Rainbow Shops opined that "since adopting Kustomer at the end of October, I feel we are well on our way to providing our customers with the real-time, flexible, and informed customer service they expect during one of the most critical times for retail success. While deploying a new technology so close to the holiday shopping season was risky, it could not have gone faster or smoother and it's already paying off in a big way, keeping both our customers and our customer service agents highly satisfied."
  • In 2017, Rainbow Shops deployed a mobile app to leverage deeper connections with its customers, providing an at-home retail experience for customers.
  • According to David Cost, VP for Digital and Ecommerce at Rainbow Shops, "launching a mobile app allows Rainbow Shops an opportunity to connect with customers on a deeper level. When a customer installs our app they are raising their commitment to our brand, making it easier for our customers to ‘Shop, Wear and Share’ their #RainbowStyle."
  • Existing marketing tech stack: According to G2 Stack cited by Crunchbase, Rainbow Shops uses 22 technology products and services including HTML5, Google Analytics, and jQuery. Additionally, the company deploys over 34 technologies for its website, including "Viewport Meta, IPhone/Mobile Compatible, and Apple Mobile Web Clips Icon."
4. Corporate Challenges Faced by Rainbow Shops.
  • According to Invesp, an online conversion specialist for e-commerce platforms, the key challenges associated with the Rainbow brand include "complex online and offline campaigns with long sales cycles, difficulties in improving conversion rates for campaigns across different verticals," and non-existent marketing and development teams constituted to run conversion projects.
  • Additionally, in 2020, Kustomer cited that the challenges of Rainbow Shops border on "difficulties obtaining access to customer insights, trapped in siloed data stores, and disjointed systems." These challenges emanate from the Rainbow Shops' decision to adopt Kustomer's CRM platform as discussed above.
  • As a result, Rainbow hired Invesp after launching its e-commerce platform in 2012 to find expert solutions. The solutions among others included a "comprehensive conversion audit to identify and prioritize conversion issues, the conduct of a comprehensive data analysis and analytics configuration to track users’ activity on the site, design, develop and run AB experiments on the site, and also track and report results on weekly basis to the team."
  • Following these interventions, Invesp delivered a 28% increment in conversion rates within the first six months.

III- Major competitors of Rainbow Shops

5. Any additional relevant facts about Rainbow Shops
  • Rainbow Shops hired Brand Burp to commit to a 90% lead generation to its website, increase brand value, and achieve a 120% user engagement and retention, among others.
  • The result revealed that the company achieved 6.1 Million followers each on Facebook and YouTube, 212k followers on Twitter, and 31.4k followers on Instagram.

Research Strategy

For this report on Rainbow Shop's digital transformation strategy, we leveraged the most reputable sources of information available in the public domain, including the official websites of the cited companies such as Rainbow Shops, Invesp, and Ashley Stewart. Additionally, we scoured third-party websites such as Yahoo Finance, Retail Dive, PR Newswire, and Similar Web. Concerning the company's funding history, our extensive search could not reveal any information after we scoured for information on the company's website, and industry publications on Crunchbase, CB Insights, ZoomInfo, Indeed, Signal Hire, and Owler. Again, the company’s tech stack, including some marketing platforms used by the company were available behind paywalls, such as Crunchbase. Consequently, we have provided information that were available in the public domain.
Also, we used ZoomInfo's list of top competitors of Rainbow Shops as the base for identifying competitors. Afterward, we selected the top four competitors with revenue figures that were higher than Rainbow Shops' $1 billion revenue or a little below it. As a result, we kept Downeast ($192 Million), Factory Connection ($274 million), A'GACI ($489 Million), and Metropark USA ($513 Million) out of our final list of competitors. Thus, competitor selection was based on similar industry and revenue estimates for the cited companies.

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