DSW steps up efforts to marry its stores and the web

August 26, 2015 11:29 AM

Many retail chains are using their web sites to drive store sales, and their stores to drive web sales. Add footwear retailer DSW Inc. to that list.

President Michael MacDonald told analysts on DSW’s fiscal second-quarter 2015 earnings call that company data shows customers who shop via multiple channels “spend two to three times more than our single-channel customers.” Some of the retailer’s investments in upgraded technology including accepting PayPal as a form of payment through its website, the launch of a mobile app and making nearly all of the its products available online are already bearing fruit, with mobile traffic accounting for more than 40% of all traffic to DSW’s e-commerce site.

MacDonald says the company will roll out buy online, pick up in-store and buy online, ship to store capabilities during the second half of 2015 to better cater to online shoppers.

“Research shows that these capabilities influence where customers are likely to shop,” he told analysts, according to a transcript from Seeking Alpha. “We're planning to roll out these functionalities in stages and expect their full implementation to contribute incremental sales volume this fall season.”

During the first quarter of fiscal 2015, DSW began testing “endless aisle” mobile technology in 10 of its stores aimed at giving shoppers in those stores easier access to the retailer’s entire offerings online and offline. Employees in those stores are equipped with mobile devices that give them access to online inventory and let them complete a transaction anywhere in the store. MacDonald says he’s pleased with how the test is going but didn’t offer a timeline as to when the service would be expanded to the retailer’s other bricks-and-mortar locations.

“We have seen a lift in total demand conversion in the 10 stores where we have implemented endless aisle, which is to say if we just look at sales that are rung in that store and sales that are demanded in that store as a percentage, those transactions as a percentage of total customer traffic, we've seen a lift since we implemented endless aisle,” he said. “So, it's moving in the right direction.”

DSW, No. 133 in the Internet Retailer 2015 Top 500 Guide, does not break out online sales, however chief financial officer Mary Meixelsperger told analysts that omnichannel is growing at an unspecified double-digit rate year over year.

For the second quarter ended Aug. 1, DSW reported:

  • Net sales of $627.2 million, up 6.8% from $587.1 million during the same time last year.
  • Sales for its DSW segment of $592.6 million, up 7.0% from $553.8 million.
  • Comparable-store sales gains of 1.8%, compared to a gain of 0.8% during the same time last year.
  • Net income of $37.6 million, up 9.6% from $34.3 million during the same time last year.

For the first six months of fiscal 2015, DSW reported:

  • Net sales of $1.283 billion, up 8.2% from $1.186 billion during the same time last year.
  • Sales for its DSW segment of $1.205 billion, up 8.3% from $1.113 billion during the same time last year.
  • Net income of $84.978 million, up 16.5% from $72.97 million during the same time last year.



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