Destination XL Group Inc. carries more than 40,000 SKUs, says Sahal Laher, chief digital officer and chief information officer at DXL, a multichannel men’s apparel retailer. It also carries more than 2,000 private label and name brands.
As shoppers purchase from that wide selection of products, the retailer, No. 293 in the Internet Retailer 2017 Top 500, collects a ton of data on consumers’ actions every day.
For example, DXL carries two kinds of products—what Laher calls basics and fashion. Basics are staples the retailer carries all year long, while fashion pieces change with the seasons and typically cost more. With each season change, DXL might know the type and amount of popular fashion items it will soon have in stock—from apparel manufacturer Polo, for example—but it cannot ship them immediately.
It promoted those products—which it thought would attract sales because they were hot and new—by giving them high visibility on the home page and in search results. But it found many men abandoned their carts when they saw that the retailer’s products wouldn’t ship for a couple weeks. In fact, the cart abandonment rate for products that wouldn’t immediately ship was about 90%, Laher says.
“Our guy, we found, is a need-based shopper,” Laher says. “He is usually shopping for an event or for something that he needs the product for soon.”
DXL changed its strategy to give prominent marquee space only to items that could ship immediately and achieved a lower cart-abandonment rate, Laher says, without being more specific. A shopper can still find those products that won’t ship immediately, but he may have to enter the brand name in the site search bar or dig deeper into product categories.
DXL gathered this insight and others using a new system from DynamicAction that analyzes DXL’s customers’ shopping patterns and identifies combinations of products, promotions and customer profiles that frequently drive purchases. DXL went live with the system in October, and it’s helping DXL gather more insights out of its massive amounts of data, Laher says.
With its new analytics system, DXL expects to grow revenue from product recommendations and email by more than 100% in six months and generate 10% more profit from new customers within 12 months.
DynamicAction also shows the retailer—for each brand and SKU–what converts well so it can promote those products. While this may seem straightforward, it wasn’t always easy to see the best-converting items across so many products and act on that data. Additionally, hard metrics that are easy to gather using DynamicAction are gradually helping change DXL’s merchandising team’s mindset to a more performance-based, data-driven site design rather than designing only for visual appeal, Laher says.
“It is not feasible for a retailer to have enough people on payroll to turn the mountains of data from every part of the organization into insight, to turn that insight into action and to make that action replicable and profitable,” Laher says.
DXL also used the vendor to collect data from disparate systems and saw that sportswear purchases were more likely to be made by existing customers, who also spent more, purchased more items per order and purchased more often.
It found that that these customers purchased additional, higher-priced sportswear items in the same site visit 14% more than they purchased in any other category. Armed with this data, DXL modified product recommendations and site search, ensuring customers purchasing sportswear products were exposed to higher-priced items. Additionally, DXL created targeted email lists of sportswear purchasers for campaigns highlighting products and brands from its higher-end sportswear collections.
It’s also using data from DynamicAction along with other vendors, including recommendations engine Monetate, to recommend higher-end products—such as its Rochester brand of apparel, which sells dress shirts for around $90—for shoppers who tend to purchase higher-ticket items.
Another tool it is using is what DXL calls My Size, which enables a shopper to enter his size for various products such as shoes, pants and sport coats and then only see items that are available in his size.
DXL has 225 retail and outlet stores in the United States.