Source: DSW VIP video
DSW’s rewards program includes ‘emotional experiences’
DSW Inc., the off-price shoe chain, launched its first tiered rewards program, packed with “compelling benefits and emotional experiences” to make it seem like it’s less about saving money.
“This program will go beyond the point for transaction model,” said Roger Rawlins, CEO, on DSW’s fourth-quarter conference call.
The DSW VIP program consists of three tiers: Club (free to join), Gold ($200 annual spend) and Elite ($500 annual spend).
A core element of the program remains the typical “the more you buy, the more points” incentive of most programs. Club and Gold get one point for every $1.00 spent. Elite get two points for every $1.00 spent. Members get a $5 reward for every 100 points they accumulate, basically equaling to a five percent discount on purchases.
However, there are a number of aspects that take the program beyond the points-for-purchase formula:
- In-store shoe donations: Members from all three tiers can earn 50 points for donating a shoe. The shoes benefit Soles4Souls, which distributes shoes to those in need throughout the world.
- Birthday gift: Club and Gold members get a $5.00 gift card on their birthday and Elite, a $10 card.
- Birthday gifting: Gold and Elite members can give two $5 birthday rewards to friends.
- Points events: Gold and Elite members get two 2X points days each year, meaning double-points on every purchase for the entire day. Elite members also get one 3x point day each year.
- Shipping: Club and Gold members earn free ground shipping and elite free two-day shipping. Free shipping to all customers is offered for purchases over $35.
- Returns: Free returns are offered to Gold members with 60 days and Elite within 365 days.
- Early Access: Gold and Elite members are the “first to know about special promotions, events, announcements, and free (yes, FREE) stuff.”
- Manicures/shoe repairs: A new store design rolled out last year includes services such as shoe repair and nail salon. The services are expected to be linked to rewards as they’re rolled out to additional locations with a two-way benefit. For instance, members getting their nails done may get a shoes discount.
Discussion Questions
DISCUSSION QUESTIONS: Has DSW succeeded in designing a rewards program that is less transactional? What unique aspects of the program seems most beneficial? Are there any other non-transactional behaviors DSW can tap?
Poll
BrainTrust
Charles Dimov
Vice President of Marketing, OrderDynamics
Cynthia Holcomb
Founder | CEO, Female Brain Ai & Prefeye - Preference Science Technologies Inc.
This program has a community or club approach, with the most important customers receiving a range of benefits that will make them feel valued. Its purpose is still to drive loyalty and spend, but I like the balanced way in which it sets to achieve this.
It is comprehensive, and they have though through many different aspects of the buying journey. But DSW needs to focus more attention on the service experience. Manicures and shoe repairs are definitely on the right path. Throw in even more such offers. Elite level is quite expensive, so as an elite member I would expect some exceptional and unique experiential offerings. Perhaps an exclusive preview of the new shoes in the coming months. Why not a special pedicure spa day for Elite and Gold members who earned enough points? Add in an exclusive wine & cheese even at certain hub locations — with a discussion of the show making process, and a talk by a well known shoe designer.
I have to admit, this seems like an odd fit for an “off-price shoe chain.” Wishing DSW the best with this new program. Full points for creativity!
The laundry list of benefits for the new DSW loyalty program will help engender loyalty beyond purchase, with compelling benefits, however not seeing anything here that will create a real “emotional experience.” That’s a shame given people’s love with shoes and shoe shopping. Bringing in designers to talk about fashion or events that benefit the local community should be considered to “up the emotional experience.”
I couldn’t agree more. 5/6 things mentioned are discounts/cost savings, but disguised as something different. (Birthday gift discounts, early access to discounts, etc.) Their program already has 25M members, so I hope DSW plans on highlighting each of these benefits independently to avoid getting lost in the shuffle.
Other emotional experiences they can explore:
The key is to eliminate pain points in the outdated wear-house shopping experience and make their customers feel special. If they can reward “the hunt” across channels, the value of their loyalty program will vastly increase.
It’s a bit of a stretch to say your loyalty program includes emotional experiences. You can create experiences that connect with people on an emotional level, but to claim that your customers will have emotional experiences if they spend more money with you is a bit shallow. It sounds like they’re leveraging one of the buzzwords “du jour.” The new DSW program certainly seems to offer some compelling benefits — any claims beyond that stretch your credibility.
Emotional experiences serve a primary goal in consumer satisfaction. The “reward” of information that better informs shoppers of the value inherent in their potential or completed transaction must not be overlooked in brand relationship development.
DSW should also tap into the pride of purchase by allowing them to place product reviews easily onto public sites, and to express the delight of their purchase and the experience with friends and family. Happy customers can amplify the brand message and provide a strong endorsement that DSW and others with reward/loyalty programs can better tap into.
Have to make this quick, running out the door to DSW! Great program, video, and app. Once all the detail of the plan is absorbed, the app ties the entire program together nicely, unlike other retailer’s complex discounting schemes. Now shoppers can check their DSW app just like they check their checking account balance, give a small gift to a friend and donate shoes to Soles4Souls. All this while getting a manicure and shoes repaired. You bet shoppers will be talking about their DSW shoe experience with their friends. Which leads to an even deeper emotional connection to the DWS brand. Nicely done!
For the most part, it is standard fare, but I do like the experience based offerings around salon (although at a shoe store, you’d think pedicures would be the natural extension) and shoe repair. That is where the value is being delivered. Where I think they could add more value is to take a page from start-ups like M. Gemi and enable loyalty members to store a fit profile of their favorite brands into their loyalty profile. This would reduce returns and simplify the buying process.
I like the fit-profile idea — and let’s extend that to actual shoe SKUs. Shopping for myself, when I find something that fits well and has style I like, I want to know I can always get it when replacement time comes. Yet shoe manufacturers keep swapping out men’s styles (but WHY?). I want DSW to be able to tell Rockport, etc, that their customer profile wants XX type of shoe in YY size and buys it with ZZ frequency. Time for fashion to listen to intelligent customer demand signals, instead of telling us what we have to choose from!
The basis of the new program is still transactional. This article is the first I have heard of all these changes even though DSW sent me an email talking about the new program. The only thing that registered with me about the new program from the email is that there are three tiers based upon how much you purchase. For DSW to get the benefit from a wider range of benefits, they have to do a better job of getting the message out.
It feels less transactional, but transactions are its foundation, so the answer is yes and no. The two pieces that stand out to me are the donation program, which I think is a great idea, and the manicure/shoe repair service which they probably should have adopted years ago.
Loyalty programs have the potential to drive big business for retailers. In fact, a recent study finder.com conducted revealed that 29.2% of Americans will purchase something purely for benefits, spending an estimated $175.8 billion collectively. DWS is right to put focus in making their loyalty program as compelling as possible, which I believe they have through a unique, rewarding and still achievable structure.
Manicures and shoe repairs are a no-brainer, but how quickly is this planned to roll out to all doors? Increasing frequency of visit, duration of visit and potential virality among shoppers makes a lot of sense, but if the offer is not consistent door-to-door it will die on the vine.