Exclusive: Q&A with Harvey Kanter, CEO of Destination XL Group
Destination XL Group (DXL) has big plans for 2023.
Chain Store Age recently conducted a wide-ranging interview with Harvey Kanter, CEO of DXL. Kanter explained how the nation’s largest men’s big and tall specialty retailer is enhancing its customer experience and store design, as well as how it tackles supply chain issues.
What are some of the unique needs of DXL’s customers?
DXL’s target customer is size 43 and up. They are often underserved and don’t have the freedom to choose the style they want. What we strive to do is provide them the opportunity to choose to wear what they want to wear.
How does DXL leverage technology to help better serve customers?
From a technology standpoint, it's about giving customers the ability to choose what they want to wear. I'm referring to things like our customer data platform, or CDP, which is a holistic review of all the different ways we interact with shoppers and will help us technologically create more personalized, unique messaging in ways that resonates with them.
We segment our customers. For example, ‘Wall Street Wally’ is a gentleman works in a business environment and wears a sport coat and dress shirt to work. CDP aggregates a whole different level of consumer data across many platforms and allows us to ingest that information and then ultimately communicate with him as if we're one-on-one; but in reality, it's a segment of consumers that look like him, style their lives like him, etc. And we ultimately communicate with him in unique ways.
If you go back to where we were three or four years ago, we had one email. It was primarily promotional and we communicated with everybody in the same way. Today we have multiple segments of emails.
And you then take that personalized experience through the website. As soon as a segmented customer comes to our business, we're actually serving up different customer experiences.
Over 90% of our customers are in our loyalty program. And as a result of that, we can look at their buying history if they visit our e-commerce site or one of our stores. That includes online as well as in-store behavior or history.
[Read more: CSA Exclusive: DXL provides AI-based online personalization]
What has DXL been doing to deal with supply chain disruption?
DXL currently sources in nine different countries in 22 factories across the world, and we nearshore at a greater level now than we have historically. This includes Central America and Mexico, where we brought goods out of Asia, back to the Western Hemisphere from a sourcing standpoint. We also strategically and tactically moved out of parts of Asia, such as China, and into other places in Asia that include Vietnam, Cambodia, Korea, India, as well as a couple other countries to create a portfolio to reduce the risk by not penetrating any one country at too great a level.
We also found the wherewithal to prove during the pandemic prove that we can turn goods faster. In 2020, we turned our goods faster than in 2019, primarily driven by a reduction of overall inventory levels. And we are maintaining a more cross-docking-focused orientation, where goods are coming in and going out to stores in a much more expeditious way than they have historically.
Can you discuss DXL’s brick-and-mortar growth strategy?
We hopefully have five stores opening in 2023 and 15 to 20 stores opening in 2024. Many of the store openings will be driven by the data we have based on direct consumer purchasing and where we're actually shipping goods, as well as the ability to identify white space in markets where we don't have stores or enough stores based on where we're shipping direct orders.
We are also working our way through remodeling our DXL stores (editor’s note: DXL also operates Casual Male stores). Literally backing up to the front of the store is a wall, and inside the store behind that wall is our cash wrap where you check out.
When you entertain at home, a lot of people congregate in the kitchen around the island, right? We've actually created two islands in the store, and they're halfway into the store near the fitting rooms. We call them customer engagement centers. They’re experience centers where we can digitally show customers products on an iPad.
When a customer goes into the fitting room and they want additional colors or sizes, they can ask associates to bring them additional sizes or come to the fitting room and show them additional sizes that are available online.
And the entire front of the store is now opened up and has much more light and airiness and ultimately, we're creating a different level of experiences more around traveling the store as an experience, as opposed to simply coming in to buy clothes.