DSW started a journey to reposition its brand last year, and its latest stop was to revamp its DSW VIP loyalty program with an ear to what customers want from their membership.
Essential to the overarching brand strategy was a customer listening tour that “really brought us back to the foundations of loyalty,” said Paige Sheedy, VP of North America Growth Marketing at DSW. The DSW VIP refresh built on these foundations and went live last month.
DSW wants to reignite customers’ love for the brand, according to Sheedy. The updated program puts an emphasis on being both rewarding and easy to use by building around its brand promise of “Rewards at the Ready.”
“The purpose here is customer control, so it's built on more flexibility and simplicity,” Sheedy told CX Dive. “They know where their rewards are and how quickly they can use them, and ultimately, it reflects this broader customer-first philosophy.”
DSW aims to stand out in the crowded footwear space with the most convenient and flexible program in the business.
DSW built its research effort around a panel of 10,000 VIP members called the “shoe cabinet,” according to Sheedy. The company has direct access to these shoppers, making them a source for rapid feedback.
“These are people who have already raised their hands and said, ‘We love DSW, we see value in the program,’” Sheedy said. “So we sent out an invitation to our VIPs, and we told them what we were bringing together, and we allowed them to self-select.”
Information from the shoe cabinet was combined with more general quantitative and qualitative feedback from customers outside that group to build a deeper understanding of what customers want across all channels, according to Sheedy.
“We learned about how they were shopping with us, how they viewed value and our rewards, where they felt we were really winning, and where they felt we could do better, and that's what kicked off what became our VIP refresh,” Sheedy said.
Reduced discounts, but a more flexible experience
The modern shopper wants to access loyalty benefits on their terms, rather than being forced into a few specific options. With this in mind, DSW’s revamp was designed to make the experience feel more flexible.
“What we found in our research is that our customers are accustomed to flexibility in all of the things they do, whether it's paid memberships and subscriptions, payment options or shopping experiences,” Sheedy said.
Customers appreciated the value of rewards in the old program, but they were frustrated by expiration dates and the need to hit certain thresholds before they could redeem their points at all, according to Sheedy. They wanted the ability to redeem on their own terms.
Under the old system, members in the lowest tier earned one point per dollar spent and received a $5 discount for every 100 points earned. These rewards were automatically added to a customer’s account once earned, and they expired after 75 days.
“Through all of our research and just anecdotally talking to our customers, we often heard, ‘Oh, I love using my rewards,’ or, ‘I got my birthday reward, I was so excited,’ but the counterpoint to that was the friction of expiration dates and having to wait until you hit your rewards threshold,” Sheedy said.
Under the Rewards at the Ready system, members in the lowest tier earn five points per dollar spent and can start redeeming rewards as soon as they save up 200 points for a $1 discount. Both rewards and points last for 12 months before expiring.
“We found that by breaking down the rewards into these smaller increments helps to be more efficient and serves as an effective ongoing reminder,” Sheedy said. “There's almost always rewards waiting for them.”
The changes to the program’s points system increases the speed at which customers earn discounts and lets them hold onto points for longer, but the changes diminish the financial rewards.
For members in the baseline Club tier, their points are worth about half as much as before. The Gold tier now costs $50 more to enter, and Elite members' points are worth about three-quarters as much as before.
Changes to DSW VIP Loyalty Program
Asked about how the discounts per tier have changed, Sheedy said the new rewards structure better recognizes and rewards customers across a wider range of interactions. The shoe retailer wants to give customers more reasons to engage beyond earning points, including with personalized offers, rewards and experiences.
“We believe the new VIP program gives us more flexibility to recognize customers based on how they explore, shop and engage with DSW, while creating surprise-and-delight moments as members advance through the tiers," Sheedy said in an email.
Putting convenience at the core
Earlier and easier access to rewards can be a significant perk on its own terms, too, even if the discount per dollar is smaller.
Convenience and speed can be a significant boon for any loyalty program. Customers see loyalty programs as a value proposition in which they trade time and information for various benefits, according to Kelly Askew, global lead for retail at Accenture. The sooner they can earn a reward, the more worthwhile the exchange.
“Are you giving me something that is sufficiently valuable for me to A, sign up for your program, and then B, whip out my loyalty credential every time I pass through the checkout?” Askew told CX Dive.
A key piece of feedback DSW received from its shoe cabinet and other customers is that the experience of using DSW VIP needs to feel effortless, according to Sheedy. As a result, the revamped program makes it very easy to see how much they can save from any channel.
“We're not asking customers to do the math,” Sheedy said. “They're always able to see the value that they've earned. They're able to see where they sit in this loyalty program, and we're able to recognize them for their loyalty whether they're shopping with us online, in the app, or in stores.”
The goal is to make it easy for customers to understand what they have waiting for them, whether it’s the standard points-based rewards, the bonus birthday reward, or any of the special rewards higher tier members can earn, according to Sheedy.
Focusing on ease of use can make a loyalty program feel worthwhile, according to Askew. The less friction between a customer and their rewards, the more valuable the program will feel in their day to day usage.
“If I've got to open up an app that logs me out every time I close my phone, and I've got to remember the password for the loyalty program, and I sit at the checkout queue for three minutes, it's costing the retailer money and their their cashier time,” Askew said. “It's costing me some frustration. So making it easy is always a good thing.”
Part of DSW’s push for ease of use has been iterating on its digital wallet, according to Sheedy. While the wallet itself isn’t new to the relaunch, it makes the benefits of the VIP loyalty program clearer and can be accessed online or in-store as well as through the app.
“We're able to remind them whether they're physically shopping with us or they're receiving an email or a text message from DSW of what benefits are waiting for them,” Sheedy said.
Finding the right tweaks to the DSW VIP program without overhauling what worked was a matter of understanding what customers wanted, according to Sheedy. The combination of multiple forms of feedback gave shoppers a voice that let their demands be heard.
“Through listening to our customers about how we can better serve them, we're able to give them access to benefits when and how they want to use them,” Sheedy said.
