DSW is all about the thrill of finding the perfect shoe at the perfect price. It’s why customers keep coming back, and that customer relationship has been nurtured by a loyalty program that started 30 years ago and has grown to more than 26 million members.
But while the DSW loyalty program has been successful by any measure (29 percent of its loyalty members have been in the program for 10 years or more and loyalty members represent 90 percent of the retailer’s sales), it was time to evolve. “We had a proven but tired loyalty program in the midst of a changing retail landscape and evolving customer needs, preferences and expectations,” Julie Roy, DSW’s vice president of CRM, digital, and customer insights and analytics, told the audience at the NRF NXT conference in Las Vegas, July 22-24.
Roy, along with Brian Seewald, senior vice president of customer experience and operations at DSW, shared how and why the company redesigned its loyalty program to become highly personalized and tiered.
Building emotional loyalty
With the retailer’s brand mission in mind — “we inspire self-expression” — the DSW team began to solve for how to offer customers “an experience as unique as they are,” Roy said. “We really thought of it as [a] need to build deep, habit-forming, emotional connections between our customers and the brand.”
DSW rolled out the new loyalty program in May 2018, featuring faster rewards, free shipping and returns, a three-tiered reward structure and greater digital integration. Since then, the company has seen a 6 percent increase in year-over-year sales — the highest in seven years — and an additional 1.6 million app downloads.
Roy and Seewald credited the success to four elements:
Stay focused on the customer
“Whether that means keeping the experience simple and easy or whether that means harnessing the power of your customer data, the customer led us on this journey and is largely responsible for our success,” Seewald said.
Set a vision and align the organization
Roy said the vision for the new loyalty program was inspired by human-centered design, i.e. thinking about DSW’s customers and what barriers might keep them from “making shoes a habit.”
Having a vision, a strategy and a roadmap in place was critical for organizational alignment and support. “We needed all 15,000 associates to buy into this vision and where we were headed,” Roy said.
“Our marketing team did an incredible job setting the vision for what this journey would look like, but we couldn’t have done it without every level of the organization getting 100 percent behind it,” Seewald said. “We’re fortunate we have a CEO and leadership team that gets how important loyalty is for us driving our business and being there for our customer.”
Keep it simple
“We wanted to keep the digital experience simple but also keep the loyalty experience simple,” Seewald said, “tiers that were understandable, benefits that people could get their arms around — really making sure it was easy for the customer to get involved with the program.”
“This is a loyalty vision that’s a new way of doing business,” Roy said. “We’re going to constantly reinvest and continuously evolve and lean into loyalty.” In the future, DSW’s loyalty program will focus on personalization, creating a sense of community among the members by facilitating connections and converting members into brand advocates, and continuing to improve digital utility to bridge the online and in-store shopping experience.
“It is our commitment to the organization that this loyalty program will keep pace with expanding customer expectations,” Seewald concluded.