DSW 2012 Annual Report Download - page 6

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The Breadth of Our Product Offerings
Our goal is to excite our customers with an assortment of shoes that fulfill a broad range of style and fashion preferences.
DSW stores and dsw.com sell a large assortment of brand name, designer and private brand merchandise. We purchase directly
from approximately 500 domestic and foreign vendors, primarily in-season footwear found in specialty and department stores
and branded make-ups (shoes made exclusively for a retailer), with the assortment at each store geared toward the particular
demographics of the location. A typical DSW store carries approximately 24,000 pairs of shoes in approximately 1,500 styles
compared to a significantly smaller product offering at department stores. We also offer a complementary assortment of
handbags, hosiery and other accessories which appeal to our brand and fashion conscious customers.
Our Relationships with Merchandise Suppliers
We believe we have strong relationships with our vendors. We purchase merchandise directly from approximately 500
domestic and foreign vendors. Our vendors include suppliers who either manufacture their own merchandise or supply
merchandise manufactured by others, or both. Most of our domestic vendors import a large portion of their merchandise from
abroad. We have quality control programs under which our DSW buyers are involved in establishing standards for quality and
fit and our store personnel examine incoming merchandise in regards to color, material and overall quality. As our sales
volumes continue to grow, we believe there will continue to be adequate sources available to acquire a sufficient supply of
quality goods in a timely manner and on satisfactory economic terms. During fiscal 2012, 2011 and 2010, merchandise supplied
by our top three vendors accounted for approximately 18%, 19% and 20% of our net sales, respectively.
We separate our DSW merchandise into four primary categories: women’s footwear; men’s footwear; athletic footwear; and
accessories and other. While shoes are the main focus of DSW, we also offer a complementary assortment of handbags, hosiery
and other accessories. The following table sets forth the approximate percentage of our sales attributable to each merchandise
category for the fiscal years below:
Fiscal years ended
Category February 2, 2013 January 28, 2012 January 29, 2011
Women’s 65% 66% 66%
Men’s 16% 15% 15%
Athletic 12% 12% 13%
Accessories and Other 7% 7% 6%
Our Distinctive and Convenient Shopping Experience
We provide our customers with the highest level of convenience based on our belief that customers should be empowered to
control and personalize their shopping experiences. In stores, our merchandise is displayed on the selling floor with self-service
fixtures to enable customers to view and touch the merchandise. We believe this shopping experience provides our customers
with maximum convenience as they are able to browse and try on merchandise without feeling rushed or pressured to make a
purchasing decision. We also provide our customers with cross-channel shopping experiences through dsw.com and our mobile
site by offering additional styles, sizes, widths and categories. Merchandise in our stores and on dsw.com is organized in a
logical manner that groups together similar styles such as dress, casual, seasonal and athletic merchandise for easy browsing.
The Value Proposition Offered to Our Customers
Through our buying organization, we are able to provide customers with high quality, in-season fashion styles at attractive
prices compared to the sale prices found at specialty retailers and department stores. We employ a consistent pricing strategy
that provides customers with the same price on our merchandise from the day it arrives in store until it enters our planned
clearance rotation. Our pricing strategy differentiates us from our competitors who usually price and promote merchandise at
discounts available only for limited time periods. We find that customers appreciate shopping for value when it is most
convenient for them, rather than waiting for a sale event.
In order to provide additional value to our customers, we maintain a loyalty program, “DSW Rewards”, which rewards
customers for shopping, both in stores and online. “DSW Rewards” members earn reward certificates that offer discounts on
future purchases. Reward certificates expire six months after being issued. Members also receive promotional offers, gifts with
purchase and free shipping on purchases over a certain dollar threshold on dsw.com. We employ a variety of methods, including
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