DSW checks layouts to highlight brands like Adidas, Crocs, Birkenstock
DSW launches a new smaller store.
DSW is trying out a new store layout and look at a location that opens this weekend in Houston, trying to focus customers’ attention on key brands.
It will feature in-store stores for national brands such as Adidas, Brooks, Birkenstocks and Crocs, as well as Vince Camuto and Crown Vintage. It differs significantly from the current layout of DSW stores, which has shoe brands interspersed in aisles organized by style and category. Design brandDSW’s parent company, calls the new concept “Warehouse Reimagined.”
At the company’s investor day last month, Designer Brands CEO Roger Rawlins set a goal of doubling sales of the brands the company owns while maintaining the business. number of national brands. “For us to achieve both of those goals, the physical experience that we create for consumers as well as for those national brands, it has to evolve,” Rawlins said later in an interview. interview with CNBC.
DSW is testing its new format as consumers return to shop in stores after more than two years of closures and pandemic restrictions. Total US retail sales, excluding autos, were up 7.2% year over year, Mastercard SpendPulse said in a report released on Thursday. E-commerce transactions decrease 1.8%, while in-store sales increased 10%.
Dana Telsey, CEO of consumer product consulting firm Telsey Advisory Group, told CNBC in a phone interview: “They have to create excitement, and an ‘oh’ to get people going. people get out of their seats and into the store, which requires more creativity.”
According to Rawlins, much of the new layout has been informed by online shopping behaviour. He said nearly 90% of shoppers at DSW visit the website before going to the store.
“These national brands are so relevant to consumers, who search their name before they search DSW,” he said.
DSW opens a new pilot store in Houston, TX this weekend. “Warehouse Reimagined” will feature storefronts for some of the major brands like Hush Puppies.
Deutsche Bank analyst Gabriella Carbone told CNBC via email that the new DSW store format “could have an impact in the long run.” However, she said the real backstop is for the chain to “represent national brands in a way that is more prominent with select in-store stores, which will help Designer Brands Inc. continue to build the relationship.” relationships with its suppliers.”
The “Warehouse Reimagined” DSW store will have an open sale format in which sizes are available for customers to pick up on their own without the help of associates. For shoppers who aren’t interested in staff assistance, self-checkout would be an option. QR codes will be integrated to allow consumers to access more information on their phones while in-store, rather than just showing current brands and prices.
Although the new format is smaller — about 15,000 square feet instead of the usual 25,000 square feet — Rawlins said he’s committed to providing consumers with the same level of inventory, trying to keep it in stock for all sizes. . The smaller square footage helps reduce fixed costs, while the new design also allows the same amount of inventory to be sold, he added.
Rawlins does not publicly disclose the financial goals for the “Reimagined Warehouse” strategy. However, to gauge its success, industry observers like Telsey will want to know if there are any resulting increases in sales and sales compared to stores that don’t remodel. among other figures.
DSW opens a new pilot store in Houston, TX this weekend. “Warehouse Reimagined” will feature in-store stores for several key brands such as the retailer’s own Crown Vintage and Mix No.
In another retail segment, Target called for improved sales of ingredients in hundreds of stores that have been remodeled since 2017. At Target’s 2022 investor day in March, the director Executive John Mulligan says increased traffic drives sales by an average of two to four percent. increase in the first year after remodeling and increase by one to two percent in the second year.
DSW will review the pilot program for some lessons. Rawlins says about one-fifth of DSW’s stores apply for lease renewals each year. Designer Brand will likely look at rolling out what’s working for stores when the lease expires. It has about 700 stores.
A major national brand DSW won’t have? Nike. Kingpin Sports ended a wholesale partnership with the retailer this year as part of strengthening its own direct-to-consumer business.
“Losing Nike is a big deal,” said Telsey. “It’s a challenge to replace Nike, you have to be able to reinvent yourself to do that. I think that’s the thing. [DSW is] try to do.”