DSW has made significant progress on its omnichannel initiative. The customer expects DSW to be able to gather the shoes she wants, regardless of how she's shopping and regardless of where the shoe is located in the retailer's system. Full omnichannel capability will allow it to move seamlessly between channels and will allow DSW to make its full assortment available to the customer regardless of whether she's shopping from her house, from her mobile device or from a store. Having this capability will make the small format store strategy even more powerful.
Today, the store and DSW.com businesses are operated separately, causing the need to break down systemic, organizational and process barriers that separate these channels. "It will require a significant commitment of resources by our organization," said DSW CEO Michael MacDonald on a recent call with analysts. "But we believe our omnichannel capability will make us an even more formidable competitor in the footwear space. Over the past several months, we've been working with two consulting firms to help us validate our omnichannel plan to develop business cases for each element of the plan and to develop a timetable for implementing the plan. We expect to complete that work by the end of the year."
The most important step in DSW's omnichannel journey has already been taken with the launch of charge-send capability. This system allows the retailer to fulfill dotcom orders out of stores and to satisfy unmet store demand from stock held in other stores. The new capability was piloted in Q3 and rolled out to all stores at the start of Q4. "We're excited about how the customer is embracing charge-send, and we're proud of its fairly seamless implementation," noted MacDonald.
Other recently implemented systems initiatives that the retailer is benefiting from include improvements in size-in-stock rate as a result of the size optimization system. "In Q3, we think this capability improved our in-stock rate by two percentage points on those items most directly affected by the system," said MacDonald. DSW is now running with one vendor on its dropship system that allows it to sell product through DSW.com, but fulfill it out of a supplier's warehouse instead of actually owning the product, the hope is to have another 10 suppliers up on dropship next year.
Reward certificates are now electronically accessible at the point-of-sale in all stores, providing a better service to customers that will lead to increased loyalty over time. Receipts can also be electronically sent to customers, providing a better service and giving the retailer another chance to capture e-mail addresses.
With the implementation of a new returns management system, return transactions are easier to process, which allows associates to look up receipts electronically at the point-of-sale. It also helps to identify fraudulent returns more easily. Additionally, all stores are now using mobile POS units for line busting, product and reward certificate lookups, associates clock-in and clock-out and to monitor store performance statistics. According to MacDonald, all of these systems initiatives are helping DSW serve the customer more efficiently and effectively.
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