Kelly Cook, vice president of customer strategy and engagement, shares how DSW is benefitting from analytics.

Case Study: DSW

Case Study: DSW

If the Shoe Fits, Sell It!

DSW connects with customers and inspires front-line employees through analytics.

As a leading shoe retailer in the U.S., DSW Inc.’s goal is to be America’s favorite place for shoes. Its 326 retail locations each carry approximately 24,000 pairs of shoes and offer customers a distinctive shopping experience that satisfies both their rational and emotional shopping needs. Connecting with customers is how DSW launched itself into the No. 2 spot in market share today, from No. 5 a few years ago. How does the company do it? By empowering employees and leveraging analytics. Kelly Cook, shoe lover and vice president of customer strategy and engagement, explains DSW’s customer and employee engagement programs.

DSW has an enviable customer loyalty program. How did it evolve?

Cook: Our rewards members are a big part of our business. Right now, 88% of our revenue is generated through our loyalty program, but it wasn’t when we started. DSW knew we could partner with custom­ers by creating magical moments when they get the shoes they want. Integrating data was really about taking the rewards program to the next level. That turned out to have a gigantic impact.

A Rewarding Strategy

Leveraging an integrated customer engagement strategy across the entire organization has enabled DSW to:

  • Climb into the No. 2 spot in market share
  • Develop and operate a highly successful customer rewards loyalty program whose 18 million members drive 88% of the company’s revenue

How does the strategy work across the organization?

Cook: For a fully integrated strategy based on customers, you need partnerships. A data warehouse by itself, just in marketing, is not going to generate all the ROI [return on investment] that is possible for a company. It has to be fully integrated across the whole business. We want to be America’s favorite place for shoes. Every employee in the com­pany can understand this simple vision. But it requires a fundamentally united organization. “America’s favorite place for shoes” won’t work without all the departments working together.

How do those partner­ships work on a day-to-day basis with customers?

Cook: It doesn’t matter how good our marketing is if the customer isn’t happy. If the store experience is not what customers want, they won’t be back. And we can have great experiences in the store, but if we’re not using data to drive traffic, that won’t work either. You need a fully integrated strategy being championed from the top of the house. Then it’s just a matter of priori­tizing all the things you need to do because believe me, customers have no problem telling you everything you could do better. Knowing what you need to do for custom­ers allows you to understand what data is needed, so you’ll know what to attack first.

“... Customers have no problem telling you everything you could do better. Knowing what you need to do for customers allows you to understand what data is needed, so you’ll know what to attack first.”

—Kelly Cook,
vice president of customer strategy and engagement, DSW Inc.

How do you know where to start?

Cook: You have to understand what customers are telling you to fix. Then you sort out which fixes are quick and which take a lot of time. Once you figure out the quick fixes, what can you use to drive ROI? Those are your quick wins, and they help most of all. Quick wins allow you to create momentum.

Can you give me an example?

Cook: We have 18 million rewards members, and we need a way to quickly scale and create marketing strategies for groups of people. Our “clustomer” strategy which is based on clusters of customers, has allowed us to benefit from some quick wins in that area.

Front-line employees are a critical part of your cus­tomer engagement strategy. How do you inspire them?

Cook: People don’t wake up in the morning and go to work because they want to be ordinary. They want to be extraordinary. Most employees know ways their company can improve. What makes DSW unique is we tap into that incredible intellectual property on the front line. Your front-line employees know so much about the busi­ness. So the first step is asking customers to tell us all the things we need to do to be their absolute favorite brand. Once you understand all that, you take that informa­tion to your employees and say, “OK, this is what customers want from us. How the heck are we going to do it?” Your employees are a wealth of information to help you prioritize. You get them to buy in and they’re excited about the outcome.

How has this played out in stores?

Cook: Our store managers write personal “thank you” notes to the top 25 customers in every store. The managers asked to do that! It’s tapping into their desire to be extraor­dinary, not just ordinary, in front of their customers. You just allow the data to enable the strategies behind the scenes.

Isn’t there some risk in empowering front-line employees?

Cook: If you allow employees to be heroes with customers, lots of things can happen. You can’t predict every interaction. You have to provide them with the necessary skills to be remarkable when they’re in front of a customer. And you have to use the data to empower them to make decisions. Once you tap into that, you differentiate yourself from competitors. A couple years ago, DSW was number five in market share. A year ago we were number four, and now we’re number two. That happened one interaction at a time, one after another, base hit after base hit. If you’re fully integrated, you get all those touch points in place to get people on your front line excited about a strategy around emotional connections.

So it’s really about people, not technology.

Cook: Technology by itself doesn’t do anything. People have to be excited about whatever answer that technology is giving them. That’s how technology provides value. We’ve seen Teradata as a really strong partner over the years in helping ensure that we get our questions answered.

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