Dynamite Blasts Off

— November 01, 2012

Canadian retailer Groupe Dynamite caters to the fashion needs of young women — two very specific young women. Sixteen-year-old Alexia is the “quintessential suburban girl-next-door.” She gets along well with her parents and is influential among her friends. Fashion-wise, she’s on trend, because fitting in is important to her. Rachel is 28, a confident, outgoing young woman who is effortlessly stylish. She’s college-educated and already earns a good salary.

She likes dressing well for work, but she wants to be able to wear the same outfit, maybe with a slight variation, when she goes out for cocktails afterward. Because she’s still searching for Mr. Right, looking sexy at the cocktail bar is a must.

Groupe Dynamite is focused on Alexia and Rachel’s needs, wants and behaviors. In every decision from style design to store design, company employees test their ideas by asking themselves how Alexia or Rachel would respond. However, they get no thanks from the subjects of all this attention. Alexia and Rachel aren’t ungrateful — they’re fictional.

Katia Berlin, Groupe Dynamite’s director of business process and sourcing strategy, explains that the company, which was founded 37 years ago, has operated two retail brands for many years — Dynamite, for young working women, and Garage, for teenage girls. Until about 10 years ago, the stores carried private-label clothing that the company purchased on the market. Then Groupe Dynamite brought its design function in-house and took over control of sourcing and production.

When buyers selected clothes for Dynamite and Garage stores, their tastes didn’t always align, Berlin says. Bringing design in-house was a great opportunity to make the company’s story more coherent. “We had to be super clear about who we were catering to,” Berlin says. Enter Alexia and Rachel.

To channel these two characters, Groupe Dynamite uses both old and new methods. Traditional methods include assembling focus groups to look at samples of new styles and vote them up or down. Newer methods (especially for Alexia) include social media–based contests to design t-shirt graphics, create videos or answer open-ended, thought-provoking questions.

In reality, customers aren’t quite as uniform as the Alexia and Rachel bios would suggest. Garage attracts shoppers from 13 to 18, and the “Rachels” at Dynamite aren’t all 28. There is even some crossover between the stores, which are often located next door to one another. Dynamite shoppers turn to Garage for casual denim wear, and Garage shoppers may visit Dynamite if they’re looking for a fancy dress for a holiday party.

The combination store concept
To enhance the crossover flow, this spring Groupe Dynamite opened a flagship store in Montreal that houses both brands in a two-story, 12,000+-square-foot space. The brands unique store experiences were brought to life in separate unique environments. Downstairs is a “chill-out space” where teen shoppers can hang out with friends and listen to their favorite music while they shop. Upstairs, in an urban, loft-like environment with “playful and glamorous” touches, young career women find more sophisticated clothes.

Groupe Dynamite, which recently revamped more than 100 of its 260 stores, is now focusing on opening new stores — and, as it already has stores in every major shopping location in Canada, most of its near-term expansion will be in the United States (which already has about 20 Garage stores), in Central America (where both Garage and Dynamite stores are being launched in Fall 2012) and in the Middle East (where Dynamite will soon join the Garage brand). New stores are expected to open at a rate of between 10 and 25 per year, depending on the availability of suitable real estate. “We’re very particular about getting the ideal real estate,” says vice president of sourcing Donna Lutfy.

A collaborative environment
In a company that is so focused on targeting a subset of shoppers, design is central — and, indeed, the company’s head office in Montreal houses a large team of designers, technicians, graphic designers and other specialists needed to develop products.

Collaboration between the design and sourcing teams is very close, Berlin says. “We work cross-functionally. From the moment the designer sets the direction, fabric development starts. The sourcing team is doing fabric sourcing and conducting additional research about what’s happening in the world of fabric. All that is brought to the table and fed to the designers. As they get clearer, they determine their silhouettes, build out their tech packs and prototypes, and once it’s all detailed, it gets handed over to sourcing again. They go out to market, identify the best country, and come back with great options. Our price points are competitive, and our quality standards are high, so it’s a challenge, but we have a strong sourcing team that can work with our strategic sourcing partners to deliver products. It’s a lengthy process, the challenge always being to shorten, shorten, shorten.”

With monthly collections being designed for both brands, the company is in a continuous cycle of development, sourcing, production, follow-up and delivery. To support all this activity, Groupe Dynamite relied at first on spreadsheets and email. “It was awful,” Berlin says. “Everyone had their own way of tracking and communicating.” Keeping up with constant changes and determining which version was really the final version was always a challenge.

All that changed two years ago when the company implemented TradeStone Software’s Merchandise Lifecycle Management solutions, which unify the design, sourcing, ordering and delivery processes. “Everyone looks at one version, from A to Z,” Berlin says with a sigh of relief. “It’s keeping it much simpler to focus and be aligned strategically.”

Before selecting TradeStone, Groupe Dynamite conducted an extensive search and examined several lifecycle management products in depth. “There are a lot of good systems out there,” Lutfy says. TradeStone was selected both for its functionality, such as customizable dashboards and easy-to-use query facilities, and for its vision. Groupe Dynamite was impressed by the company’s development roadmap and its commitment to enhancing its software. “It’s willing to invest and grow with its customers,” Lutfy says.

Berlin adds that TradeStone encourages users in different companies to share information with each other about using the system effectively. She says, “It’s extremely useful to know I can call someone at another company and say, ‘How are you guys doing this? How did you solve this?’ It’s rare to see in retail.” This communication also helps the user’s group prioritize enhancements for TradeStone to work on — which, in turn, helps TradeStone remain closely aligned to customer needs.

Technology supporting growth
Berlin and Lutfy defined the TradeStone dashboards by role so that employees are presented with information about the styles and processes they are working on. The presentation helps them work consistently; exception reporting helps them zero in on potential problems and keep work flowing smoothly.

Key suppliers can now also view the information relevant to them rather than emailing questions to their contacts at Groupe Dynamite. Berlin says the company plans to allow its main suppliers to collaborate further in the near future.

Groupe Dynamite is one of several customers that uses TradeStone’s entire product suite, which includes modules for retail product lifecycle management, collaborative sourcing and order management. Integrating all these modules makes sense in this company’s collaborative environment, where work flows back and forth between different divisions.

Another reason for implementing all the TradeStone modules at once was that the suite is only one piece of the total systems overhaul in progress at Groupe Dynamite, and the company wanted to build interfaces to the other new systems only once. Projects currently under way and scheduled to be completed in 2013 include implementation of Oracle’s retail system with point-of-sale terminals, Manhattan Associates’ system for warehouse and distribution center management and additional planning and financial subsystems.

In addition, a Dynamite e-commerce system is being developed to complement one already successfully deployed for Garage. The company hopes the online service will attract new customers who are out of reach of its stores; in addition, existing customers will be able to order online from store locations if, for example, the color they are looking for is out of stock.

As Groupe Dynamite says of Alexia, “It is time to dream. Discover. Experience.”

Masha Zager is a New York-based Apparel contributing writer specializing in business and technology.

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