In the future, IT will play a big role in how companies define their ideal customer

How Groupe Dynamite got more mobile and social

Meet Alexia. She’s a 16-year-old girl-next-door type who lives in the suburbs. She’s close to her parents, does well in school and gets a weekly allowance. She likes casual clothes with a sexy fit, and tends to dress like her friends for acceptance and reassurance. She aspires to be an adult, but is sometimes childlike. Outgoing and well-connected to her friends, she has started discovering new things and wants more of them – namely travel, cars and boys. And to do that, she often feels she needs to look the part.

Alexia is the fictional but representative example of the target customer Michel Joncas and his colleagues keep in mind as they develop the technology that powers the Garage chain of stores that Groupe Dynamite operates in shopping malls across the country. On the other end of the spectrum is Rachel, a single 28-year-old who rents a small loft, is confident, witty and likes to have fun. A Rachel is more likely to shop at Dynamite, the other brand of stores the company owns and operates primarily in Quebec.

It’s not unusual for major retailers to create personas of the most likely people to come to their stores, but traditionally that kind of information would have primarily been useful to the marketing and sales departments. Joncas, however, used Alexia and Rachel as the building blocks for an IT strategy that begins with internal hardware and applications to increase efficiencies along with external customer-facing social media tools that nurture relationships with both new and loyal customers. As the vice-president of IT at Groupe Dynamite in Montreal, his efforts may be indicative of major changes affecting the retail industry – changes that will largely depend on a skillful blend of both consumer and enterprise technologies.

Joncas was the keynote speaker at an event hosted by IDC and the Retail Council of Canada in Toronto in April that focused on the “omnichannel” customer. In other words, customers that may use a retailer’s Web site, its Facebook page, the actual store, a 1-800 number or a combination of channels to engage with the company. While many U.S. chains have already been rolling out customer-facing apps and revamping internal IT infrastructure to create greater throughput and efficiencies, the picture here is far less bright. According to a survey of approximately 150 retailers IDC conducted earlier this year, only 14 per cent of Canadian retailers fall into the camp that has successfully transformed store experiences through mobile technology. The majority, 35 per cent, admitted they are essentially “non-mobile” so far, with only potential plans for pilot projects.

“A lot of it is about thinking about the theatre of the store – What does it feel like to the customer?” said Leslie Hand, research director of IDC Retail Insights. “What will make them want to shop at your store more than anybody else’s?”

Late last year an article in Bloomberg BusinessWeek talked about the rise of the “mission shopper,” who comes to a store with all their online research complete, with no intention of staying any longer than is necessary to grab an item and pay for it. Retailers are now reconfiguring stores to encourage browsing, the magazine said, with wider aisles to accommodate strollers, along with lower shelves and displays so shoppers need look no higher than 10 feet.

The mobile makeover

For Joncas, it all starts with better service, which is why Groupe Dynamite is doing a pilot program that will see iPads distributed to employees along with IP phones. “We had two-way radios in the past, so the business case was all based on the ability to broadcast messages to our employees from a central office,” he said, adding that the devices will also offer access to Web-based applications. “Instead of going to a computer, they can do it in a store in any area. That increases productivity.”

Groupe Dynamite will build upon that productivity by funneling more information to store associates, like a live feed on traffic data, what’s happening in the store, conversions, sales, and so on. The stores use cellular waves as a backup in case of emergencies. “You have to have a plan B when the phone line is completely ripped in the shopping centre or things like that,” he said.

Groupe Dynamite provides available and secure Wi-Fi access for its entire office community. Its infrastructure includes Motorola RS409 scanners, EWB100 push-to-talk over WLAN enterprise wireless badges and the Digi Connect WAN series of cellular/WiMAX gateways/routers provides serial or Ethernet to high-speed cellular capability. There’s usually a very small back office in each store or warehouse, but, “Working on a computer in the back not really efficient,” Joncas said.

In your Face(book)

While empowering employees is important, getting closer to customers is critical. Joncas said Groupe Dynamite realized early on that its target market was likely to be highly engaged in social media, which why it started establishing a Facebook presence almost two years ago.

“We discovered we simply have to listen to our customers,” he said. “When we launched a text message promotion, we could measure on our (customer) surveys if there was an impact. It’s the same thing with Facebook.

While the Garage brand has some 310,000 Web mail addresses of customers, it has more than 455,000 Facebook connections, making it an increasingly strategic channel. One of its early successes was conducting a contest to search for a real-life Garage model, where photos would be uploaded and voted on through its Facebook page. This was supported by in-store collateral with QR codes to drive further awareness. Joncas said the company has also used Facebook polls to better understand its target market.

A more recent contest featured videos that indicated a fighting couple could either make up or breakup. Customers could vote on how the story should end by sending a text message vote to Facebook, or even to YouTube.

“You have to have people dedicated, full-time, looking at this,” he said. “That’s one of the most important lessons we’ve learned.”

The pressure to change

While the customer-facing and internal IT Joncas is using to transform Groupe Dynamite serve many business needs, he told the IDC event he realizes there’s a need for better integration. That’s one of the reasons why, last year, Oracle announced that Groupe Dynamite had signed on as a customer of its Retail Suite for POS. This includes Oracle Retail Merchandising System, Oracle Retail Store Solutions, Oracle Retail Demand Forecasting and Oracle Retail Price Management. “We want to link all of these things together.”

IDC uses a maturity model to gauge the level of interactive retailing in Canada, Hand said. The model ranges from non-mobile to foundational (where retailers are doing pilots around mobility), engaged (where they’re making specific mobile investments), empowered (where they have enabled upsell/cross-sell apps, as well as apps for customers), to transformed retailers that fully empower employees and customers. Only 14 per cent of retailers in Canada, however, are in the engage to transform phases, according to Hand. Most are doing nothing at 35 per cent. That’s a problem, because given the nature of this market, the competition around interactive retail is bound to get intense without warning.

“While I was here, I visited the Toronto Eaton Centre,” she said. “I didn’t do an exact accounting, but I estimated that maybe 40 to 50 per cent were global retailers, brands I sees everywhere she goes around the world. Some of these companies, they just have to decide to turn it on anywhere, and then it’s here.”

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