Dsw comenity bank customer service

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A Proposal for Increasing Revenue for Designer Shoe Warehouse by Implementing a Database System that

Searches Mismated Shoes

Prepared for Roger Rawlins

Chief Executive Office of Designer Shoe Warehouse

By Nick Chavez

October 23, 2018

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Transmittal Letter Nickolas Chavez 910 Wiget Lane Walnut Creek, CA 94598 Roger L. Rawlins Chief Executive Officer & Director DSW, Inc. 810 DSW Drive Columbus, Ohio 43219 Dear Mr. Rawlins, Working as a sales associate at Designer Shoe Warehouse for almost two years, I am determined to help raise overall sales, while keeping a positive and energetic attitude when working with customers We have many different brands of shoes in stock and unfortunately, we have customers who are ready to check out at the register that don’t have the right sizes in the box. When the proper size shoe can’t be found, we offer to order the shoe for the customer. There are times when the pair of shoes is not available online or it is inconvenient for the customer to go to another location. We lose a lot of potential customers when they can’t purchase that certain pair they came in to buy. I am confident that creating a data system that can locate “mismated” shoes for customers will be beneficial for all DSW stores. Customers enter our Designer Shoe Warehouse stores searching for a wide variety of shoes, from athletic wear to sandals. One of the most popular types of shoes customers go for are our selection of men’s dress shoes and women’s dress heels. If a customer can’t get that shoe because one of the shoes in the box was the wrong size and we are not able to order it for them, they are forced to look at another store. To help with this ongoing issue, DSW should implement a data system in each store to locate shoes that are the wrong size for the customer to have in store or pickup in the store no less than two days. A data system can help attract customers. With special promotions through our Rewards Program, we can compete with other retail stores having the ability to sell “mismated” shoes to customers. Already having tablets at our front desk, we don’t need to buy other equipment to install this idea. All the mismated shoes will be held in a warehouse for customers to search for online. Thank you for your consideration and I hope we can meet to discuss transforming the way we handle stock with a data system that will help manage mismated shoes in a timely manner. Respectfully, Nickolas Chavez

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Table of Contents

Executive Summary………………………………………..4 Introduction………………………………………………….5 Problem/Need Statement Analysis……………………….6 Solution Analysis…………………………………………...8 Work Plan………………………………………………..... 11 Budget Cost Analysis……………………………………..12 Evaluation………………………………………………….14 Conclusion…………………………………………………16 References………………………………………………...17

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Executive Summary

When a customer is at a transaction checkout at Designer Shoe Warehouse and the shoe box has two incorrect sizes, the only other options are to order the shoe online to your home address or pick it up at another DSW location. If the shoe is not available to order online or the customer does not want to go drive to another location, they cannot get the shoe and they search for other retail stores. DSW has lost potential overall sales. By implementing a database system, employees will be able to search up shoes through the POS system and find the incorrect shoe for the customer to have at the cash register. Employees can look up any shoe by brand, color, size, etc. The benefits of the database system will help increase sales transactions, Rewards Program sign-ups, and an overall increase in sales revenue. The work plan to implement the database system in all Designer Shoe Warehouse locations will be 6 months, which includes customer surveys, research, and marketing for the database system. Once it is released, the marketing for the database system will include emails and special promotions sent through the Rewards Program and that the system has all the appropriate software updates. The total cost for this project will be $73,761.33 with a possible savings of $1500 if the loan is paid in 10 months.

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Introduction Proposal Purpose: The purpose of proposal is to assist customers with a generated data system that can locate mismated shoes for them to have in store or pickup in no less than two days. Other retailers like Nordstrom allow a “split-shoe” order policy, and to compete with that, Designer Shoe Warehouse needs to locate mismated shoes that end up being lost in inventory. DSW can help boost sales during the holiday season as well, with more shoes being sold because of the correct sizes in each shoe box. A data system would not only drive traffic and increase overall profit, but also increase Designer Shoe Warehouse stock per share as well, giving a boost to stockholders. By implementing the data system, Designer Shoe Warehouse can increase marketing opportunities and become a tourist destination for purchasing shoes as well as attract younger. Contact Information: Nickolas Chavez nchavez2@mail.sfsu.edu 910 Wiget Lane Walnut Creek, CA 94598 (925) 357-1206 Written For: Roger L. Rawlins Chief Executive Officer & Director DSW, Inc. 810 DSW Drive Columbus, Ohio 43219 Written On: October 8, 2018 Effective Start Date: January 1, 2019

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Problem/Need Statement and Analysis The Problem: Designer Shoe Warehouse customers are limited to shoe purchases at the transaction checkout when one of the pair of shoes are damaged, and or have inexact shoe sizes called “mismated” shoes. When the situation occurs, customers have the option to have the shoe shipped to their home address or to the store for no shipping charge. When the shoe is out of stock from the warehouse in Columbus, Ohio, the customer has no choice but to look for another pair of shoes. Thus, having potential customers shop at other retail or online shoe websites. In Designer Shoe Warehouse reviews (2018), customers commented on the shoe not being in stock, along with comments about how the right shoe wasn’t in the right box and that they were forced to order the shoe when they wanted to walk out with the shoes the same day. With poor reviews about customers not getting the right size at the transaction checkout, they rather would save time and try online, because they know they are more guaranteed of the right pair of shoes.

Even though Designer Shoe Warehouse has other locations near Pleasant Hill like Dublin and Brentwood, it is not convenient for customers to travel to that location. The main goal of a customer is to be able to buy the shoes in store, not see if the shoe is available in another store and have to drive to that location. Customers don’t want to do that, and especially if the customer is older, we don’t want them driving all around to find the shoes that were supposed to already be in store. Therefore, customers find alternative stores to buy shoes, resulting in less profit for Designer Shoe Warehouse.

Who/What the Problem Affects: Customer service and managing time throughout a store’s day is very important to a Designer Shoe Warehouse employee. With customers being the main source of profit for Designer Shoe Warehouse, we need to have shoes available in all sizes in each store, or the customers will find other non-Designer Shoe Warehouse locations. Most of our customers that walk into the store are families and older people, and it is helpful when the kids’ shoes are available in store, causing families to not leave bad Yelp reviews and spread word to other families to shop here. With our older customers, they prefer to try and have the shoes in store. They don’t like to buy through our online store. That being said, many employees of Designer Shoe Warehouses’ start to get affected. Many customers will get frustrated with employees telling them their shoes are not in stock and they could get lashed out on or complain to their managers as well. Due to customers not buying products from DSW retail stores and decreased revenue, stockholders take a hit with the stock price decreasing. According to Caplinger (2017), “revenue was up to 1.7% to 708.3 million, but that was less than what most of those following the stock had expected to see. Adjusted net income dropped 14% to 35.9 million, however, and that resulted in adjusted earnings of $0.45 per share.”. With low stock prices, many stockholders won’t continue to invest in Designer Shoe Warehouse and end up selling their stock.

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Why a Solution is Necessary: In many of the Yelp reviews about Designer Shoe Warehouse, customers made negative comments about the shoes not being available in store because they were damaged or they weren’t the right size in the box at the transaction checkout. As more customers start to read these reviews about our Designer Shoe Warehouse locations, they would not want to start shopping with us and go somewhere else. As less customers continue to shop, we start to see a decrease in overall profit and Rewards Program sign ups are affected.

In general, we get customers from all around the world, visiting from different countries or are coming from a few blocks down the road. We do our best to utilize our customer service and make sure the customer leaves the store satisfied with the desired product in their hand. If the shoes aren’t the correct size at the box when the customer checks out, we cannot have recurring customers. Also, our big priority for our Designer Shoe Warehouse locations are Rewards Program sign-ups, so how can we attract more customers to sign up to our loyalty program when they don’t want to come back and buy our shoes?

Along with overall profit taking a hit for our locations, stock shares start to take a hit as well. In 2016, “shares were near a 5-year low, presenting an attractive entry point for those willing to brave the wilds of American retail, as the stock yields around 4%” (Seeking Alpha, 1). As of October of 2018, stock is down 4.64% and it doesn’t look like it’s slowing down. As we are going into the holiday season, customers are going to start pouring in to see some of our holiday essentials including women and men dress boots. If we have less inventory of those shoes, customers are going to find other places like Kohl’s or Nordstrom’s to find their products. Customers are going to want their shoes ready when they leave the store, and if other places have that shoe in stock, we start to lose customers.

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Solution Analysis Solution Description: Implementing a database system in all DSW locations to search all inexact shoe sizes, along with shoes that were damaged at checkout as well. Instead of the store suffering a net loss of incorrect shoe sizes in box or damaged shoes, employees at all Designer Shoe Warehouse stores will be able through the database to get the customer the right size of the shoe if there is fault at the transaction checkout. The implemented database system will track all lost sizes from the lost inventory division at the back of each Designer Shoe Warehouse location. Thus, will enable customers to continue shopping and increase sales on our online website and drive overall profit for the company in general, while increasing stock prices.

Even though Designer Shoe Warehouse gets a lot of customers through their online shopping, many customers still prefer to shop in store. According to the Lesonsky (2014) “90 percent of all U.S. retail sales still happen in stores. Just 5 percent occur via online-only channels such as Amazon.com, and another 5 percent occur on the eCommerce sites of companies that also have brick-and-mortar locations.” Many customers are enlightened by the idea to try on and have their shoes in store. Many people have different complications with their sizing and feel of the shoe, making it difficult to get the correct size when ordering online. Also, if the customer needed a shoe for an event and they ordered the shoe and it wasn’t the right fit, the angered customer would have to find somewhere else to buy it. With the database system, the customer would come into each Designer Shoe Warehouse location and know the correct sized shoes are either out on the sales floor, or in the stock room.

When customers are at checkout in a Designer Shoe Warehouse location and they have the wrong sizes in the box, it is policy that they can’t sell it. Their only other option is to see if another Designer Shoe Warehouse has it, or if they want to order it online. However, other retail stores have capitalized on this topic and started to sell incorrect shoe sizes to customers for no additional charge. According to Amy, “as long as the shoe sizes are at least 1 1/2 sizes different, there is no additional cost for buying two differently sized shoes (same cost as buying a pair of equally sized shoes)” (Where to Buy 2016). If Designer Shoe Warehouse can’t change the company policy, this database system will help find the correct size without the customer having to worry about Nordstrom’s feature. Also, employees will have an uncomplicated time finding the products they are looking for, rather than subject them to our online shopping modules. The database system at the front register of each Designer Shoe Warehouse will increase productivity with customer service and assist customers on buying the correct sized shoes.

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Strategies to Accomplish Desired Solution: In order to get this database system up and fully launched for all DSW locations, DSW should take the following steps:

● Research other retail or non-retail companies to observe how they implement their database system in a low-cost efficient way.

● With Designer Shoe Warehouses’ loyalty program, institute the database to make it easier to shop if you are enrolled.

● Create a marketing campaign similar to that of Nordstrom’s “Split Shoe Order” Policy and endorse the database system to attract customers.

● Hire additional employees in each Designer Shoe Warehouse location that have job descriptions that include finding incorrect shoe sizes and keeping them in inventory for customers to buy or be delivered no less than two days with no shipping charge.

● Advise all leaders and executive officers to broadcast presentations about the database systems in brand meetings at the end of each quarter.

● DSW locations all have iPad tablets, and we can have the database through the tablets so it’s accessible and ready to use; no need to pay for them. However, research on how we can implement the database system through our company or through another vendor in a low-cost system.

● The employees search up the correct sized shoe in the database system and they can filter the search by the style name, color, brand, etc.

● Once the employee finds the correct shoe and it shows the other size is in stock, they look for the other shoe in the back room, where it is carefully divided by all the incorrect shoe sizes with their correct color and style.

To add to this ground-breaking installment, customers will be able to also phone-in orders as well. If a customer wants a shoe and they are on the way to a specific location, they can call ahead of time see if they have the correct sized shoes in the box as well. This will secure the product for the customer, and they don’t have to worry about coming to the store only to find out they were the wrong sized shoes. Also, the customer has the option to know which shoe brands in each DSW store have more sizes available. The employees will inform the customers if a Marc Fisher boot sells greater quantities of size nines. If they do, there will be more inventory for them and if they don’t, they won’t. Assuring the customer ahead of time that we don’t carry a lot of sizes in that particular brand will help limit problems when they come to the store. This database system will help customers feel more comfortable walking into a store and knowing they can walk out what they were looking for.

Foreseen Changes after Solution is Accomplished: When the database system is in full-effect, not only will traffic into each Designer Shoe Warehouse increase, employees will locate it easier to find the other correct sized shoe. No more breaking the news to the customer about the shoe not being available.

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Customers that know they can walk out with a pair of shoes the correct size will want to continue to shop and spend money at Designer Shoe Warehouse, as well as inform other potential customers about our products. According to “Optimized Materials Replenishment (2014), “DSW's 700,000-square-foot distribution center in Columbus, Ohio, a cross-belt sortation system delivers increased capacity and productivity improvements in a compact footprint.” With our enormous warehouse in Columbus Ohio, it can be a burden to keep track of all the different products. With the implemented database system, the shoes can be shipped to various Designer Shoe Warehouse locations to keep in inventory and for the customers to have a better probability of getting the right product. Not only does the database system help with overall profit for the company, it helps with our loyalty program. We don’t offer credit card sign-ups to help with our sales, so Designer Shoe Warehouse relies heavily on Reward Sign Ups. The database system will help draw in customers to enroll into our rewards programs, letting them know of the special promotions and points they get for continuing to shop at DSW. In the Rewards Program, it will promote how the database system operates, and how the employees are there to help find you the correct size shoe if it is not at the transaction checkout. Long Term Effects: Designer Shoe Warehouse as a company emphasizes customer service, and are improving their ways of how they interact with customers. With this database system, customers will feel the need to shop at Designer Shoe Warehouse more than other retailers like Famous Footwear. This system will help grow our customer base, along with improving time-management spent with individual customers. Since Designer Shoe Warehouse focuses heavily on Rewards Program conversion, this will also help improve customers signing up. If a customer is not a Rewards member and they want to use the database system, they will get individual points and a coupon sent to their email just for signing up. The more customers that sign up while using the database system, the more customers will want to use the system, while increasing sales on the system and for the company in general.

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Work Plan

Date Task Resources People 1 January

2019

Database System Surveys:

• Consumer based survey researching popular brands of products DSW offers

• Features to look for: Specific shoe sizes customers want, styles, brands, and colors

Wages, Computers, Conference Rooms, Brand Awareness Meetings

Survey Group (20) Research Analysts (5)

20 May 2019

Develop Database System ● Research for ways to

implement the system in a low-cost way through the tablet

● Include desired features and go through “mock testing” of system

● Employees go through tablet training in stores

Computers, Wages, iPad Tablets and or Computers that are designed for Point of Sale

Marketing and Development Group (11-13) Trained Store Managers (1)

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October 2019

Implement Database into all DSW Store Locations:

• Stress importance of being able to locate correct size shoes for customers

● Emphasize search query of shoes by style, brand, color

Proposals, wages, Computers

Regional Managers (2-4) Loss Prevention Director (2-4)

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Budget/Cost Analysis Wages: (From Bureau of Labor and Statistics)

Title Average Yearly Wage

Total Number of Employees

Estimated Expense

Operations Research Analysts

$81,390 ($39.13 per hour in Pleasant Hill)

4 50 hours. - $7,826

Advertising, Promotions, and Marketing Manager

$129,380 1 6 weeks - $14,275.85

Design: (From Bureau of Labor and Statistics)

Title Average Yearly Wage

Total Number of Employees

Estimated Expense

Software Developer

$103,560 1 5 months - $51,780

Source of Funds: Since Designer Shoe Warehouse will need to stay cash positive when the implemented database system is in the review stage, I propose taking out a loan of $70,500 at Comenity Bank . The interest rate on the loan will be 7.4% per year. The loan will be paid in the full 10 months after the database system is fully installed in all Designer Shoe Warehouse locations. Loan Details:

Loan Provider Interest Rate Loan Amount Length of Loan

Comenity Bank

7.4% $70,500 10 months

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The total cost of the loan will be $73,761.33, with an interest of $3,261.33 for 10 months. For monthly payments, Designer Shoe Warehouse will pay $5,435.55, and it will not start until the loan is taken out from Comenity Bank (Personal Loan Calculator, 2018). Since Designer Shoe Warehouse is a corporation, they have to deal with debt capital. Boyte-White (2018) states “one benefit of debt capital is interest payments are usually tax-deductible. Even if interest rates rise, the cost is partially offset by the reduction in taxable income.” Also, a depreciation cost can be present depending how Designer Shoe Warehouse write their assets on the balance sheet. Cost/Benefit Analysis:

Total Estimated Cost $73,761.33

Estimated Revenue 3 months after release

(800 shoes per day x $49.99 per shoes) x 10 stores (Bay Area)

$3,540,000

Estimated Revenue 1 year after release (800 shoes per day x $49.99 per shoe) x

10 stores (Bay Area)

$9,340,000

This loan should not affect the company greatly, and the loan can be paid back within several months. They can save up to $1,500 in interest payments once they are able to pay the loan back. By allowing customers to find uneven shoe sizes through the database system, transaction orders will double, and there will be a significant increase especially during the holiday season. Designer Shoe Warehouse revenue will increase as well, along with customer satisfaction of having the pair of shoes ready to leave.

Evaluation

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Strengths: ● Increased customer base and as

more shop at Designer Shoe Warehouse, Rewards Program sign- ups increase

● Increase in sales transactions at the POS

● Increased overall sales profit

● Tablets at the front desk of each

store location will reduce wait time in lines

Weaknesses: ● Malfunctions of database system lead

to incorrect search queries of shoes by color, style, etc.

● Database system entices Rewards Program members because of email subscription

● Software updates for database system

can be lengthy

Opportunities: ● Customer satisfaction with finding

correct shoe sizes in box at transaction checkout

● Social media marketing for recurring and potential customers

● Opportunity to expand to other parts

of the United States ● Distinguish from other retail and

online companies that have a similar feature

● Popularize Designer Shoe

Warehouse by offering more variety of shoe brands through the database system

Threats: ● Demand for database system

implementation in other stores can cause “copycats.”

● Customers might not want to get their shoes from the back stockroom, being it have “defects” causing them to search at other retail stores.

Issues: An issue that can occur when the database system is implemented is the hiring of additional workers designed to keep inventory of the other mismated shoe. When hired, the job description can contain wages per hour to be low, so that could raise a problem with the equal amount of pay compared to the other sales associates and warehouse workers of Designer Shoe Warehouse. Also, as the database system increases more

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sales, additional workers will need to be hired, and that can cause a problem with the imbalance of sales associates and stockroom workers. Another issue that could arise is other retail companies try to imitate the database system. This system is supposed to be unique for Designer Shoe Warehouse only, and if we have other companies try to implement their own version of a database system, customers will realize that Designer Shoe Warehouse is not the only destination to buy shoes. The database system has to be unique and contain special features that only DSW can do. Lastly, there could be an issue of people simply not using the database system. If only 5 customers used thedatabase system in one day, sales alone from the database system will be low. However, because of the several store locations, it will make up for it. Contingency Plan: Besides marketing through social media campaigns, Designer Shoe Warehouse can promote their database system and business to nearby high schools and colleges, by making posters and getting employees from Designer Shoe Warehouse to visit and give information about the company and the new database system. Also, this can help with helping to increase the amount of workers for the. database system as well. Young, school workers will get the chance to get job experience along with help the stores hire additional workers as well. Since Designer Shoe Warehouse strives on Rewards Programs, they can send out emails to customers that are already subscribed promoting the system as well. Saige Driver of Business News Daily (2018) states “however, not every social media platform is a good fit for every business. You should invest your time and skills in the platforms where you're most likely to reach and engage with your target audience” Facebook would be a great way to promote this database system. While making updates on the system’s errors and abilities, it can also lead to forums about how the database system can be improved. Also, photos can be posted of the database working with a customer and a special hashtag can be made. The hashtag will create a topic for other Facebook users to join in as well. While the database system is in the trail stages, Designer Shoe Warehouse employees can walk around with tablets to let the customers know ahead of time if a shoe is available in the correct size in the stockroom, to reduce long lines. To increase Rewards Program sign-ups, customers can get individual points when they use the database system, and it can get them closer to another coupon to use in the near future. This could help increase sign-ups along with having customers want to use the database system.

Conclusion

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Designer Shoe Warehouse needs to implement a database system for all store locations to help improve sales and customer satisfaction with their products. Promotions through the email about using the database system and getting points will help increase Rewards Program sign-ups as well. Not only will this benefit the company, it will help our older customers shop at our stores without having to do complicated online orders, thus closing a small gap between young generational customers. Designer Shoe Warehouse has an opportunity to create a unique database system that only their retail stores carry. It will increase sales during the holiday season as well, because customers will know that they can buy their presents at DSW locations. They know they can get additional points they use it while signing up for the Rewards Program as well. More customers will appreciate the fast transactions, and it would help with sales revenue as well as improving on customer service. Designer Shoe Warehouse can also incorporate an “express” line as well. This will help divide the customers by their shopping ordeals, whether they know their correct shoe is in the box or if they need to use the database system. The line will help improve transaction times as well, along with increasing employee work. Another feature that can be added to the Rewards Program is when they decide on using the database system, they can use the coupon on the pair of shoes they want to buy, instead of having to wait until the next day. To help increase Rewards Program sign-ups, we can encourage existing members to spread the word of the database system, by forwarding emails or giving them coupons for a friend to use in any DSW location. The more customer traffic we get into the stores, the sales through the database system will increase. This database system can create a strong relationship with customers, through extensive promoting and friendly service. A database system for Designer Shoe Warehouse will increase sales transactions, increase customers and Rewards Program members, and improve customer service. I would like you to consider my proposal for extending on our quality customer service we give at our DSW locations. This project will be time-consuming and some money to be paid off in loans, so it’s great if we could start early. Also, it’s a great topic to discuss at the next brand awareness meeting as well. It is only a matter of time before other shoe companies start to imitate on the project and then customers will know we aren’t the only location with an implemented database system. This invention will change how customers react to when the correct shoes are not in the box at a transaction checkout. I look forward to meeting you to discuss the plan and its effectiveness. The program being already into the POS registers and tablets will create a fast-paced environment. As we start to head into the holiday season, we start to get a general consensus of what customers want, and it’s only a matter of time before we start the process

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