DSW Bets Nail Salons in Shoe Stores Will Lure Millennial Women

(Bloomberg) -- Nothing like a fresh pedicure to show off a new pair of sandals. At least, that’s what DSW Inc. is banking on as it tries to accelerate shoe sales by adding nail services inside more of its stores.

The retailer said Wednesday it’s adding nail salons to five shoe stores this year in Washington, Austin, Texas; and Dublin, Ohio. DSW began testing the concept in 2017 in two locations in its headquarters city of Columbus, Ohio.

DSW Bets Nail Salons in Shoe Stores Will Lure Millennial Women

Offering a broader range of goods and services is the name of the game in retail as consumers demand more experiences as they shop. And drawing in millennials is key to that strategy, according to DSW Chief Executive Officer Roger Rawlins. He said while millennial women make up about a quarter of the company’s customer base, they have accounted for half the patrons at the nail salons.

“You’ve got to develop differentiated experiences to ultimately retain and attract customers,” Rawlins said in an interview. Those experiences, he said, need to be ones “that cannot be duplicated in just a digital environment.”

Full-service manicures start at $30 and pedicures at $49. Some locations will offer waxing services, wine and other beverages. Salon customers can earn points in the company’s rewards program. The salons are run by W Nail Bar, also based in Columbus.

‘Home Run’

All of this pampering leads back to DSW’s strategy for selling footwear. Almost a quarter of the time, a salon patron buys a pair of shoes, which Rawlins called a “home run.” Those patrons spend about 60 percent more on footwear than they did before the company added the salons, he said.

“In the retail world, that’s magic,” he said. “You’re getting more visits, you’re getting a higher share of wallet and we’re retaining more of these customers because of the relationships we build.”

During its test with the two Columbus locations, DSW positioned footwear like flip flops and sandals to face the customers in the nail bar. Salon revenue at one of the stores accounted for about 6 percent to 7 percent of the location’s $10 million in sales. Rawlins said he’s aiming for closer to 15 percent in the next few years.

Rawlins plans to eventually have salons in half of the company’s more than 500 shoe stores, some of which offer shoe and handbag repair services.

“This is part of a much larger strategy of differentiating the experiences and the product for the DSW brand that separates us from the rest of the pack,” Rawlins said. “Everyone else is out there competing on price; we want to compete on experiences.”

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