Shoes for everybody: DSW's behavioral segmentation

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Shoes for everybody: DSW's behavioral segmentation
Shoes for everybody: DSW's behavioral segmentation

DSW breaks down its customers not by demographics, but by behavior. By algorithmically segmenting customers, the shoe retailer can tailor its marketing communications to each type of individual—varying the type of deals and promotions sent, as well as their format—for instance, should DSW send a coupon that can be ripped off a direct mail piece, or include a QR code? Kelly Cook, DSW's SVP of marketing, broke down the customer segments during her panel at the Teradata Partners conference.

Multi-category

"She buys from every category we have, so we know she likes accessories, she likes shoes, she likes scarves, she likes everything we sell. We want to expand her wallet [by sending promotions for every type of item]. We want that wallet to grow year over year."

Loves the classics

"This customer is interesting, and we get one of the highest margin rates from her. She likes higher-end shoes, doesn't like mark-down codes, which is great. She likes to buy at regular price."

Fashion-focused

"This girl has W, InStyle, Cosmo, Vogue. She likes all the fashion looks. She likes the trend papers. Finding the fashion shoe in her size is very important. If we don't have her size, she goes to our competitors."

Classic deal-seekers

"The classic deal seeker goes right to the back in clearance. She searches for every one of her sizes. Everything we send her from a marketing perspective, she puts in her wallet. She loves anything that has a promotion associated with it."

Fashion on a budget

"The thing about her is she wants fashion but also a smoking hot deal. So in clearance in the back, we have 30, 40, and 70 percent off. She wants the stickers with 70 off. And if we have something with a yellow sticker with 80 off, she's there."

Man of the house

"The most profitable customer we have from a pure margin perspective. Price is not an issue with him. He pays more high prices for craftsmanship and quality. The other thing is that he loves are QR codes. Men hate to get something in the mail they have to tear off, so we put QR codes in the marketing so they can scan them. It's all about simplicity."

Online shoppers

"The thing about the online shopper is he's got his iPad, his mobile device. You can go into DSW and see 15 different styles of Converse. He's very hip, very trendy, and completely connected with people in his social network."

Shopping bag filler

"They don't come in very often, but when they do, they make it count. When these customers come in, they're not buying two pairs of shoes, they're buying seven or eight pairs."

Return trippers

"She buys five pairs of shoes and returns three. She loves our return policy. That's OK; that's what makes her attractive to us, and DSW attractive to her. The fact you can buy online and return in-store is appealing to her. Our competitor Zappos doesn't have a store to return to."

Shoe fanatic

"This is our number one customer at DSW. Just a little trivia: the number one customer spent $56,232 on shoes in a year. That's how much the top customer spent. Do you think the store manager wants to know when that customer walks into our store? They do."

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