DSW Revamps Loyalty Program
Shoe retailer DSW Shoe Warehouse will replace its loyalty program next month, rolling over active members in its current program.
DSW launched DSW Rewards on Sept. 5, replacing its Reward Your Style program that has 6.8 million active members.
Columbus, OH-based DSW used members’ suggestions to revamp the program, setting lower reward thresholds (and corresponding lower rewards) and adding a second tier, DSW Premier Rewards, for heavy shoppers.
Base members earn a $10 gift card for every 1,500 points (that’s $150 in regularly priced goods, slightly more in clearance purchases).
All members can set their preference for the level of contact from DSW Members also get two double-points shopping days each year, and can give their phone number at checkout to collect points if they don’t have a membership card.
Members who have made purchases in the last year are automatically converted from Reward Your Style on Sept. 5; inactive members who make a purchase by Jan. 1, 2007 will be auto-enrolled in DSW Rewards. Those who don’t will be dropped.
Loyalty club members are crucial to DSW’s sales: Last year, members accounted for 60% of its sales, and they spent an average of 19% more than non-member shoppers.
DSW is still rebounding from a security breach in March 2005 that exposed 1.4 million debit- and credit-card numbers, as well as personal data from 96,000 checks. The stolen purchase data covered three months of transactions at 108 of DSW’s then 176 stores; the theft was not connected to its loyalty program.
Thieves got credit- and debit-card numbers, names and transaction amounts but not addresses; or checking account and driver’s license numbers, but not names, address or Social Security numbers.
DSW entered a consent agreement with the FTC, finalized in March 2006. DSW could end up paying $6.5 million to $9.5 million in lawsuits now pending.
The FTC concluded that DSW’s security was insufficient, and requires the retailer to develop a comprehensive security program and get independent third-party security audits every other year for the next 20 years.
