C&A

C&A: rethinking retail and driving digitalization A story of how C&A conquered the digital arena, maximizing productivity, generating growth and perfecting its ecommerce.

C&A: rethinking retail and driving digitalization 2 Intro Boarding the digital train What makes a successful marketplace Click, collect, expand Closed stores, open minds The culture of transformation 03 08 05 10 06 11 Table of Contents

C&A is a Belgian-German-Dutch chain of fast-fashion retail clothing stores, running 295 stores across Brazil since 1976. The company was set up by the wealthy Brenninkmeyer brothers, Clemens and August, in 1841 building on the back of a centuries-old family textile business. With stores on 4 continents, it incorporates other 11 sub-brands and has a wide range of collections dedicated to every phase and mood of life, from baby clothes to swimwear. In its more than 40 years, C&A Brazil has become a reference for Brazilian people as a place where they find accessible fashion and related categories. In 2014, the retailer engaged in the ecommerce project from the need to give the fashion business a digital dimension and chose VTEX as platform provider. C&A has been investing in the growth of its digital presence ever since, with results being collected in all areas of the business. Fashion retail ecommerce at its finest

Successful collaboration Today, the app already represents about 50% of C&A’s digital sales and is the most downloaded fashion app in Brazil. Neverending availability Even with the closing of the brick-and-mortar stores in all of Brazil due to the pandemic, the omnichannel maturity enabled C&A to keep track of all its sales remotely. Crisis-proof business While many companies downsized during the pandemic, C&A’s online sales grew 350% between July and September 2020. Sustained growth over time Over the 6 years of operating in ecommerce, C&A has increased its revenue from digital 20 times. Reliable mobile solution The company grew from 100 to 300 sellers from September 2020 to December 2020. Results

C&A: rethinking retail and driving digitalization 5 Boarding the digital train Propelled by the change of the consumer profile, the fast-fashion giant decided in 2014 that an ecommerce operation was highly needed for the business to grow. After only one year of operating on VTEX Commerce Platform, C&A Brazil sold BRL 50 million through the platform, proving that the physical-to-digital changeover was the right way to go. When the ecommerce project started, the leaders of C&A were not expecting the results to start rising that fast. To go further into the digital arena, accelerate growth, and expand the physical marketplace into a digital one, the fashion retailer hired a team of talented ecommerce professionals, some with previous experience with the VTEX platform. The two companies have been working together ever since in order to deliver the best shopping experience to C&A’s customers. Nonetheless, just as with great power comes great responsibility, fast and exponential growth brought bigger and harder-to-solve challenges. As the online business grew, C&A Brazil was one of the first retailers that successfully incorporated as many as 150.000 SKUs from different sellers into one catalog, pioneering the marketplace wave we’re seeing take shape now. “For me, VTEX differentiates itself on the market through scalability and speed in innovation. Ecommerce has been transforming C&A and boosting its acceleration in the digital market. This allowed us to move forward. The two companies together.” Fernando Guglielmetti, Director of Ecommerce at C&A Brazil

C&A: rethinking retail and driving digitalization 6 What makes a successful marketplace Looking at the retailer’s general architecture, one can see both progress and complexity. When C&A first created its ecommerce presence, managing the inventory of 10 subsidiary brands was rather challenging. The way VTEX Commerce Platform is structured, it’s possible to turn each sub-brand into a seller and have a different inventory for every single seller under the umbrella. With the marketplace, C&A’s catalog management got simpler, easier and won new capabilities. For example, defining rules for categories, brands, and products to automatically correlate SKUs with existing products keeps an instant track of all the items available. To host these capabilities, usually big costs and a lot of hard work are enquired to upgrade and scale the inventory system. Yet, this problem is solved in advance by VTEX Commerce Platform: it’s possible to customize the catalog, divide into clusters, expand by integrating new sellers and

C&A: rethinking retail and driving digitalization 7 distribute products in any channel at no extra cost. C&A began its operation with 150.000 SKUs. Now that there are different accounts with independent configurations, each store is more manageable. This ingenious architecture enabled C&A to pioneer the concept of having different logistics and payment options within the same store. Among the retailer’s many wins and gains is opening its marketplace to external sellers. By entering the marketplace realm, C&A’s goal was to go beyond its own catalog, to sell more than fashion, and expand its offering with new sellers and new categories. Growing from 100 to 300 sellers in just 4 months has recently resulted in a tremendous increase in product assortment, all leveraging VTEX’s native marketplace capabilities. This means less time and money spent on adding the new sellers and SKUs with tools for onboarding, management, and product matching. Incorporating more brands means offering a more diversified product mix, better supporting their customer’s needs and growing market share. Also known as Galeria C&A, the online marketplace is responsible for a considerable share of C&A’s sales, especially in the electronics department, or fashiontronics as they call it. The company wanted to invest in an operation that is cost-efficient and powers faster growth, and we see the marketplace as the future of C&A’s ecommerce.

C&A: rethinking retail and driving digitalization 8 Click, collect, expand C&A has come a long way since its first contact with VTEX. The entire ecommerce team worked very hard, especially in those challenging times, to unite the whole company around the new digital era – irrespective of the department. At this point in time, every single brick-and-mortar store is equipped with a pick-up point and a ship- from-store option, and the checkout is ready with a geolocation feature that checks product availability in the nearest depot to the customer placing the order. Those two categories combined to form the core of their omnichannel operation and account for 55% of C&A’s sales. After investing a lot of effort into the digital transformation, now it’s safe to say that one of C&A’s strengths is omnichannel. As far as the warehouse management system is concerned, there are two models in place: fulfillment operations at the distribution center and at the physical store. The latter happens when the customer chooses the pick-up in store option on the website and therefore does not pay any shipping fee. The reason behind this is that keeping inventory is easy when you know exactly where your products are and the information is available both on your desktop and mobile phone.

C&A: rethinking retail and driving digitalization 9 Most checkout methods on the market are complete in themselves, but often lack connection with the store, the warehouse, or where those are located. There’s a methodology, called heuristics, that takes into account a set of parameters that are important for a given interface. Using it to develop the SmartCheckout, some of those parameters are the moment of purchase, the products in the customer’s cart, the geographical position of the customer, and the inventory. By combining all these parameters, the SmartCheckout is capable of identifying the closest store that has the inventory to fulfill each order. The superpower of the omnichannel is that it enables the shopper to have a seamless experience regardless of the channel. For the retailer, it simplifies inventory management, along with other key benefits, like driving sales due to the increase in the product offering accuracy. In short, you primarily offer products you can deliver since the system is making you aware of the inventory by showing live information about the remaining stock nearest to the customer’s location. Having full digital visibility of what is in each C&A’s brick-and-mortar store was a game- changer utility for the company. Additionally, on the technology side, omnichannel is very easy to set up, almost ‘plug and play’ – the challenge is not about setting it up anymore. It’s about setting up the processes and operations to make the omnichannel happen.

C&A: rethinking retail and driving digitalization 10 Closed stores, open minds The Coronavirus intensely transformed the global trends, dividing the market into winners and losers of the transformation battle. For winners such as C&A, making progress in ecommerce is imminent, and that might affect consumer behavior in the future. Ecommerce is becoming a substitute source to provide goods that usually consumers bought in superstore traditionally. Mobile apps are known to change and actually improve the way retailers interact with their customers. They increase customer retention and loyalty, helping to provide sales support, which is now ever more crucial with the ongoing pandemic closing down the physical stores. You can give users a better customer experience, despite the absence of the ‘sensory’ component. Apps loading time is faster than mobile sites. C&A’s mobile application has been one of the download leaders in the fashion category. A very important thing to mention is the success of the app since the coronavirus hit in early 2020: it grew from 500k users in March to 4M in December. With the shopping experience built entirely on top of VTEX APIs, it pushed for a significant increase in sales, and also in the visibility of the brand. Today, the app already represents more than 50% of C&A’s digital sales and is the most downloaded fashion app in Brazil. The crisis certainly challenged C&A to work better. The team organized itself into working groups that sought to solve customer problems. And they organized into multifunctional groups aimed at solving the customer’s issues. C&A had a high impact on the way the customer buys on the website or in the mobile application. However, the fulfillment happens in one of the stores at that time functioning as Dark Store and delivered to the customer’s home. Even with the stores closed, this feature allowed C&A to monitor and deliver from its stock to all customers. Only this time, everything was handled digitally—through omnichannel.

C&A: rethinking retail and driving digitalization 11 The decision of C&A to invest heavily in ecommerce and digital transformation is directly connected with the change of customer behavior. In Brazil, people have been more and more engaged with technology and digitally connected, a phenomenon that called for the creation of different channels to serve the customer better. For example, the store is connected with WhatsApp and social networks. Following the same pattern and being continuously influenced by the needs of its clients, C&A has used this metric as the main driver for change. And the changes were not small. The team in charge of the digital transformation had to look for new and fresh talents, change the workflow, and envision a different approach to their new digital identity. Nonetheless, all those reforms overlapped with a worldwide health hazard, and all the more caution was needed. This six-year journey has given C&A a knowledge legacy, teaching the ecommerce teams how to work in a more agile way, how to better focus on customers and give them the value they deserve, faster. They learned how to categorize an issue, break it into smaller pieces, and deal with those pieces in-depth, thus a new system emerged in the digital realm. The ecommerce project that C&A took since 2014 to this day, with bumps of many shapes and sizes, has brought not only high market status, but the company is also seen as more reliable, delivering more value to the end-customer. And above all, during the pandemic, working from home functioned like a hotspot for VTEX and C&A—it brought everyone together. The culture of transformation We advanced a lot and managed to get where we wanted. C&A became more valuable and experienced each week. We seek to make an improvement and to deliver improvement to the customer. Fernando Guglielmetti, Director of Ecommerce at C&A Brazil

C&A: rethinking retail and driving digitalization 12 see more at: VTEX.com Drive business growth with collaborative commerce from VTEX. VTEX is the first and only global, fully integrated, end-to-end commerce solution with native marketplace and OMS capabilities. We help companies in retail, manufacturing, wholesale, groceries, consumer packaged goods and other verticals to sell more, operate more efficiently, scale seamlessly and deliver remarkable customer experience. Our modern microservices-based architecture and our powerful business and developer tools allow VTEX to future-proof our customers’ businesses and free them from software updates.

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