Sketchers USA Inc a $2Billion or a year company, describes itself as '' an award-winning global leader in the lifestyle footwear industry, and designs, develops and market lifestyle footwear that appeals to men, women, and children of all ages. With more than 3,000 Styles. Sketchers meets the needs of male and female consumers across every age and demographics.

Any shoe company could say something similar. What separates one from another' , increasingly , it isn't the shoes, it's the information.

Information systems are woven into every part of Sketcher's business. It recent investment in oracle applications, including cloud computing (introduced in the telecommunication, networks, Network and the internet section of this chapter) demonstrates the company's commitment to information system. Mark Bravo, Sketchers' Senior Vice President of Finance says '' As we manage growth, we are establishing a business structure that lowers costs and creates more value and flexibility across business.

The cloud services help us to lighten our IT overhead and enable us respond more quickly to market opportunities. Therefore, it was natural that Sketchers would turn to information systems to help with customer retention.

In fast moving consumer product category like shoes, using information syste to understand, attract and retain customers is even more important than having latest technology, many companies use loyalty programs to help retain customers.

A pizza shop might give its customers a card that is punched every time they buy pizza when the card has 10 punches , the customer can order a free medium pizza with two toppings, loyalty program reduce the chances of a regular customer switching suppliers even if another shop sells pizza for less during a promotion or offers a different advantage.

After Sketchers decided to offer a loyalty program, their challenge was this: How to design the program for greatest sale impact? . The company had to balance case of early rewards the value of the rewards, and other factors so they gave away as little as possible while retaining as many loyal customers as possible. In the pizza shop, a free pizza after buying five might cost too much revenue a free pizza after twenty might put the rewards too far out in the future to be attractive. Ten is a good middle ground.

The loyalty program that Sketchers shoe company-designed, planned jointly by their marketing and information systems dept, called Sketcher elite. Members earn free merchandise ($10credit for every $150 spent), get free shipping, and enjoy special promotion. In addition, Gold member (who spent at least $750 on Sketchers shoes in a clandar year are Platinum member $1,000 get a higher merchandise credits, sneak perks at future products and earn other higher benefits.

Sketchers could not operate Sketcher Elite with Information System. The system that supports this loyalty program records information about members, the purchase, rewards so members can track their participation online. In addition, the system provides Skethchers management with information about the purchase patters of regular customers and shoe designs that appeal to them. The system also let Sketchers send targeted promotional materials to its best customers.

Does this use of Information technology pay off?. According to Analyst Peter Chu, it does. He found on November 2 2011, that Sketchers (SKX) stock performance outpaced that of the other shoe manufacturers he tracked.

He considers that performance " a bullish sign of underlying fundamental and technical strength.

Discussion Questions?

1. Which information systems applications described in the case study are unique to Sketchers and would not benefit any other shoe manufacturer? Which aspects of their loyalty program could other firms duplicate and quickly benefit from?. Which would take competitors longer to use or offer?
2. What kind of information does the Sketchers Elite Program use? Aside from its direct benefit in increasing custom loyalty, what other benefits might the program have? How could Sketchers use the information in its planning and sales activities?

Critical Thinking Questions?

1. In the five years from 2005 to 2010 Sketchers approximately doubled its revenue from about $1billion to $2billion. This is a high a growth rate. How do you think this growth affected their spending on Information Technology?
2. In its 2011 annual report, Sketchers warns investors that '' Many of our competitors are larger, have been in existence for a longer period of time, have achieved greater recognition for their brand names, have captured greater market share and/or have substantial greater Financial, distribution, marketing, and other resources than we do. Part of this wording is required by Financial regulations, but its nonetheless true. How can intelligent use of information systems help Sketchers overcome the difficulties described in its annual report?