DSW tries to make itself ‘essential’ with Hy-Vee partnership

Discussion
Photos: Hy-Vee; DSW/Instagram
Apr 16, 2020
George Anderson

DSW has closed its 1,000 stores across the U.S. as the footwear chain has been classified as non-essential retail by government authorities trying to keep consumers at home and reduce the number of cases of COVID-19 in their local communities and states. A new partnership with Hy-Vee, however, may give DSW a foothold in an “essential” grocery outlet if social distancing and stay-at-home orders persist for an extended period of time.

Under an agreement between the two retailers, DSW’s top-selling family footwear will be displayed and sold from pallets in 120 of the grocer’s locations. Customers will be able to purchase shoes on the DSW website that are in-stock at Hy-Vee and choose to pick them up in the store, receive them via curbside pickup or have delivered with their groceries to their homes.

After the initial rollout, the parties plan to open several DSW Designer Shoe Warehouse shop-in-shops inside an unspecified number of Hy-Vee locations.

DSW’s collaboration with Hy-Vee comes at an opportune time. While overall retail sales fell a record 8.7 percent in March, grocery sector revenues jumped 25.6 percent as consumers rushed to stores and went online to stock up on food and everyday staples, such as personal care and household cleaning products. The Iowa-based grocery chain, which generates $10 billion in annual sales, operates 265 stores across eight states in the Midwest.

“We are excited to be growing in new categories and delivering DSW’s mission of inspiring self-expression to Hy-Vee customers,” said Roger Rawlins, CEO of Designer Brands, DSW’s parent company. “Our commercial team has positioned itself as the plug-and-play solution to grow in the footwear category.”

“Quality footwear and accessories will always serve as a top need for the American consumer,  which is why we’ve made these solutions available to our shoppers,” said Randy Edeker, Hy-Vee’s chairman, CEO and president. “Hy-Vee’s goal is to provide its customers the very best in all lifestyle categories in a convenient and easy-to-shop format, and we’re proud to partner with a company that shares the same vision.”

A DSW spokesperson told RetailWire that the retailer is not looking to other grocery partnerships beyond Hy-Vee at this time.

DISCUSSION QUESTIONS: What is your assessment of DSW’s deal with Hy-Vee, considering the current state of retailing with the coronavirus pandemic? Do you expect other non-essential and essential retailers to cut similar deals if stay-at-home orders and social distancing measures continue?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"I believe in the situation we have now, workarounds are the antithesis of what we should be doing. "
"There is a reason why some retailers have been deemed “non-essential” and adding footwear to grocery stores will only result in longer queuing and customers browsing too long."
"Any smart business knows that sacrificing user experience for a marketing ploy is a huge mistake..."

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19 Comments on "DSW tries to make itself ‘essential’ with Hy-Vee partnership"


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Mark Ryski
BrainTrust

Interesting move. It seems somewhat opportunistic, with a tinge of practicality. Finding a way to sell goods will be a challenge all retailers will face. While we can debate the true merit of whether shoes are essential or not, no one can blame these retailers for collaborating in this way. While teaming up with an essential retailer may be one way to gain access to shoppers, I see plenty of logistical challenges that will make this challenging to do. I expect we may see more of it, but it’s not a panacea.

Richard Hernandez
BrainTrust

This is an interesting collaboration. The store-within-a-store concept is not new but perhaps this brings a new perspective to it as non-essential stores are still closed and need to be looking for ways to survive during and after the pandemic. I will be watching to see the success of this test. Its success may provide a springboard for others to try the same.

Jeff Weidauer
BrainTrust

This partnership seems ill-considered at best. Shopping for food and shopping for shoes are two different trips. I don’t see shoppers wanting to try shoes on while shopping for food, especially in the current climate. DSW would be better served by promoting its online services, and Hy-Vee should keep its focus and not get distracted by shiny objects.

Michael La Kier
BrainTrust

While COVID-19 has shifted shopper behavior to be more digital, the fact that 80 percent to 90 percent of retail sales were from physical stores means that retailers who were deemed “non-essential” will need to be VERY creative to get back the majority of their businesses that were lost. Retailers like DSW that relied on browsing may just be out of luck in the post-pandemic world. This partnership is creative, but won’t stop the bleeding.

Gene Detroyer
BrainTrust

When I first read the headline, I thought “What a good idea.” They are going to sell groceries in their stores to help alleviate the social distancing crush on Hy-Vee. Then I read the the article and was greatly disappointed.

I believe in the situation we have now, workarounds are the antithesis of what we should be doing.

Hy-Vee should be 100 percent focused on providing groceries for those who need them, when they need them. Anything that distracts one iota from that should be eliminated. As for sneakers, we all can get along another month or two or three without new ones. After all, how are we wearing them out?

Mark Ryski
BrainTrust

Notwithstanding my comment above, I think you are spot on Gene. We’re all encouraging retailers to do whatever they must to survive, and so I can’t fault DSW for trying, but I wholeheartedly agree that Hy-Vee should be 100 percent focused on essentials and any distraction from this is a mistake.

Steve Montgomery
BrainTrust

Gene I agree, it’s a great idea in reverse. This is not like a restaurant who gets into the grocery business to try to stay afloat. This a business that is very much in need trying to make a few extra bucks at the risk of its customers.

Art Suriano
Guest

I think this is a brilliant move by both Hy-Vee and DSW. If your stores are closed and you have an opportunity to partner with a chain who is not only open but doing well with traffic and online sales, why not go for it? I see this as a big win for both parties and yes, I would expect to see other retailers getting into the game. As for the long-term, no one knows how this situation will end, when, or what life will be like in the new normal. So how many retail partnerships will we have, and whether or not they will continue once all stores are allowed to open will most likely be decided after everyone involved has a chance to assess the success, the cost, and the value. In the end, I see us entering into a whole new world of retailing as well as a new world of how customers respond.

Stephen Rector
BrainTrust

Yes, I expect to see more of these agreements go forward and think it’s a good idea once we move past this crisis. Speaking to non-essential manufacturers, they are still shipping to Meijer and Kroger/Fred Meyer – which has kept their businesses afloat. It’s no different than Walmart or Target. Would it be odd for Macy’s and Kohl’s to start carrying groceries? It’s adding convenience for the customer which as we move forward will continue to be more important than ever. To reiterate, this comment is forward-thinking, post-crisis.

Adrian Weidmann
BrainTrust

This is another example of the evolution of retailing. Just as the traditional lines of demarcation between grocery, restaurant, and retail were blurred and then erased with the acquisition of Whole Foods by Amazon, this pandemic is further expediting this evolution with shoes being sold in grocery aisles. Regardless of the pragmatic business decision, I find this to be in bad form given the sacrifices people are making along the whole food supply chain to allow us to get food at all. Selling shoes in the grocery aisle seems petty and needless. Marie Antoinette’s quote during the French Revolution comes to mind – “let them eat cake.” Bad form Hy-Vee – I thought your brand was above this.

Ken Lonyai
BrainTrust

This can only go two ways: customers will be focused on food acquisition (given its challenges) and nothing more, or they will appreciate the distraction from necessity and make some feel-good purchases. I believe it will be the former. E-commerce still exists, footwear purveyors are a part of it and the expansive product choices online vs. limited store stock are obviously more appealing. I doubt there’s any looming success story here.

Interestingly, while it seems DSW has resources for this folly, my wife has shoes to return to them and they have been completely unreachable to answer her questions.

Any smart business knows that sacrificing user experience for a marketing ploy is a huge mistake as I’ve outlined here.

Kai Clarke
BrainTrust

Smart, smart, smart. Partnering with a grocery story like Hy-Vee gives DSW entrance into an “essential retailer” while providing a way to keep offering their products to their consumers in one more retailer.

Ryan Grogman
BrainTrust

I recognize this is a creative partnership which will allow DSW to get their product in front of more customers during this current pandemic; however, now is simply not the time for this type of approach. There is a reason why some retailers have been deemed “non-essential” and adding footwear to grocery stores will only result in longer queuing and customers browsing too long in stores. In addition, given health and safety concerns for employees who are already overworked trying to keep up with constant grocery restocking, it doesn’t seem prudent to utilize these associates for the receiving and stocking of shoes during this crisis. I do think there is a time and a place for such arrangements, and I believe post-pandemic, and once social distancing measures start to lighten, is when we’ll start to see more of them.

weitsay
Guest
5 months 12 days ago

My assumption is that this partnership was already in the works, pre-pandemic. I’m betting the partnership was tweaked to adjust to the pandemic vs. canceling or rescheduling its launch. I’ve worked with many footwear brands and I can tell you that none of them would be able to turn this sort of partnership around in a few months.

In any event, will DSW sell a ton of shoes? Probably not, but it’s good for brand awareness — and most importantly, it gets people to see and perhaps try on shoes in real life. This can effectively cut down on return/exchange costs when people ultimately shop online.

Sterling Hawkins
BrainTrust

It’s not the most intuitive step (I don’t want to try on shoes in a grocery store), but perhaps the numbers and shopper base analysis told a different story. It rings of something that has been in the works for a while. The timing is interesting through as Walmart, Costco, Target, etc. are barred from selling “nonessential” items, such as clothing, by local governments in parts of the US.

Craig Sundstrom
Guest

I’m a little torn on this: are they “non-essential” and trying to evade regs, or are they properly following the law? The answer will depend on what types of shoes they push — sneakers “yes,” stilettos “no” — and how long the closures last (just as with barbers “essential” depends a lot on the time frame).

I’ll defer further judgement on the ethics until I see how it turns out, but yes, I think we’ll see at least a few other companies do something similar.

Patricia Vekich Waldron
Staff

I’m not sure there is a large enough intersection between Hy-Vee and DSW shoppers to make this successful long-term. I don’t know if I’d be giving up store space to discount shoes during a pandemic….

Verlin Youd
BrainTrust

Smart move on both parts. If the Walgreens/Kroger partnership makes sense — picking up your Kroger groceries at your local Walgreens, then why not a step further and make DSW stores a place to pick up groceries. It’s a perfect time to try an innovation like this, and if it doesn’t work they can fail fast and try something else. Kudos for using an interesting time for all to innovate!

Shikha Jain
BrainTrust

DSW and Hy-Vee need to consider whether the partnership is worth it for two reasons.

1) Consumer reaction. Will it just come across as corporate greed to shoppers? The marketing techniques that are gaining traction among consumers during the pandemic seem to be mostly those that appeal to social responsibility, while many of the rest are labeled tone deaf.

2) Payoff. Will people actually stop to shoe shop while trying to obtain their essentials, especially when online shoe-shopping is by no means a novelty? Is selling shoes considered ethical and the best use of valuable shelf space during a time when items on shelf be mostly essential?

DSW and Hy-Vee both have to consider whether they are really adding value to the consumer experience and to their own portfolios, as would any potential shop-in-shop partnerships.

wpDiscuz
Braintrust
"I believe in the situation we have now, workarounds are the antithesis of what we should be doing. "
"There is a reason why some retailers have been deemed “non-essential” and adding footwear to grocery stores will only result in longer queuing and customers browsing too long."
"Any smart business knows that sacrificing user experience for a marketing ploy is a huge mistake..."

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