DSW 2015 Annual Report Download - page 7

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Table of Contents
we offer thousands of shoes for women, men and children and a complementary assortment of handbags, hosiery, jewelry and other accessories which appeal
to our brand and fashion conscious customers.
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 buyers are involved in establishing
standards for quality and fit, and our 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 merchandise in a timely manner
and on satisfactory economic terms. During fiscal 2015, 2014 and 2013, our top three vendors supplied approximately 18%, 18% and 19% of our
merchandise, respectively.
Our merchandising group continuously monitors current fashion trends, as well as historical sales trends, to identify popular styles and styles that may
become popular in the upcoming season. We track performance and sales trends on a weekly basis and have a flexible buying process that allows us to
reorder successful styles and cancel underperforming styles throughout each season. To keep our product mix fresh and on target, we test new fashions and
actively monitor sell-through rates. We also aim to improve the quality and breadth of existing vendor offerings and identify new vendor and category
opportunities.
We separate our DSW merchandise into four primary categories: women’s footwear; men’s footwear; athletic footwear; and accessories and other (which
includes kids' footwear). The following table sets forth the approximate percentages of DSW segment sales attributable to each merchandise category for the
fiscal years below:
Fiscal year
Category
2015
2014
2013
Women's footwear
59%
61%
62%
Men's footwear
18%
18%
17%
Athletic footwear
14%
12%
12%
Accessories and Other
9%
9%
9%

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. Our traditional and mobile points of sale allow us to interact and transact with customers on the selling floor.
Merchandise is organized in a logical manner that groups together similar styles, such as dress, casual, seasonal and athletic merchandise, for easy browsing.
Our goal is to create an endless aisle for the customer. Customers can order additional styles, sizes, widths and categories that can be fulfilled from other
stores, our fulfillment center or the suppliers' warehouse. To further meet customer demand of how they receive products, we launched the additional
capabilities for buy online, pickup in store and buy online, ship to store options in 2015.

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 have historically employed 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 DSW
stores and at dsw.com. DSW Rewards members earn reward certificates that offer discounts on future purchases. Reward certificates expire three months after
being issued. Members also receive promotional offers and gifts
3
Source: DSW Inc., 10-K, March 24, 2016 Powered by Morningstar® Document Research℠
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