Most Recent Articles In Department Stores
Latest Department Stores Articles
- El Palacio de Hierro Sees Management Changes
- Steady as She Goes: Harper Seen Staying Belk’s Course
- Galeries Lafayette Group Buys Luxury Reseller Instantluxe.com
More Articles By
At Belk, a jam session isn’t about making music. It’s a meeting of minds with the intent to enhance or seize a business opportunity.
This story first appeared in the March 18, 2013 issue of WWD. Subscribe Today.
Belk jams come in different forms — internal jams are for employees only; external jams mix insiders and outsiders, and online jams on belk.com draw from staffers at various levels as well as vendors, tech companies, retailers, college students and business leaders.
Aside from all the jamming, the retailer has created the “Belk design studio,” a private online hub, open to all 23,000 Belk employees, for submitting, commenting, voting and ultimately acting on new ideas.
There’s also the “stage gate” process, an idea-to-launch system and an industry standard for innovation. At Belk, it starts with 14 executive vice presidents and their “innovation advisory boards,” teams that identify focus areas, observe customers on the selling floors, then brainstorm, create a feasibility plan and conduct a “quick test” inexpensively that could lead to a pilot of the concept. The cost is relatively small — no more than $25,000.
The stage gate process can span nine months, though only a couple of months are required to reach the quick-test phase. “The idea is to fail cheap, fast and often,” said Tim Belk, chairman and chief executive officer.
In interviews at the home office, Belk and other officials conveyed just how eager the team is to accelerate change, get the entire organization in on it, and move past a reputation for being industry followers.
Any number of companies have suggestion boxes. But at Belk, it’s about identifying opportunities or problem areas, having the processes in place to develop solutions and institutionalizing innovation as part of the corporate culture. Belk has $6 million earmarked for capital expenditures and other expenses related to formulating and testing new concepts. Executives are evaluated based on a wide range of skills, innovation among them. It’s part of their annual reviews.
“We spent a lot of time last year, starting in July, trying to focus internally on innovation. It’s something that historically we were not very comfortable with,” said Sue Curley, who in 2012 became Belk’s vice president of innovation, a new position at the company, after serving as vice president of advertising, planning and analysis.
“Infusing innovation throughout the organization is fairly unique across the department-store sector,” Curley added. “We are getting some traction, but by no means do we have all the answers. It’s just the start.”
The shift is particularly crucial considering Belk’s ambitions to reach $6 billion in annual revenues within five years, from the current $3.8 billion. The company is also seeking to accelerate e-commerce growth and omnichannel initiatives — in both cases, it’s playing catch-up to much of the competition.
RELATED STORY: Upping the Digital Ante >>
In October, Belk staged its first cross-functional idea jam at an off-site location for its bridal business, bringing together representatives from Lenox, Calphalon, Vietri, Cuisinart, The Knot, wedding planners and the Belk bridal team from stores, marketing and the buying office.
“The purpose was to help us figure out how to make Belk the number-one destination for Southern brides looking to register. A lot of ideas came out of that,” Curley noted, and a couple were “quick tested” and are entering advanced testing phases. One test involves personalizing the registration experience by conducting live, online group sessions between brides-to-be and Belk’s bridal registry manager. Belk has also been testing “side cars” on the home floor to flag products as “registry favorites,” after learning that some brides struggle to find product to add to their registries.
At Belk’s first vendor jam or “innovation fair” last month, there were six 15-minute presentations of new technologies, ranging from the gimmicky to some potential game changers.
“When you think about piloting a new idea, think about Belk,” Tim Belk told representatives of the brands and tech companies gathered inside the “overview room” at headquarters.
Izod, a brand owned by PVH Corp., introduced its “impression zone” where digital technology and a kind of “magic mirror” lets customers see in the mirror how they look in different outfits without trying anything on.
PVH also showed off its “silent sellers” — mannequins, visual displays and kiosks — that can be scanned with a mobile phone and send a message to associates to get the products at the wrap desk for you, or ship them home for you.
Levi’s showed an “interactive catalogue” enabling shoppers to put colors and fits on jeans that otherwise aren’t shown in the catalogue, for a wider selection.
SAS introduced “endless aisle” technology designed to help retailers figure out how to stock products online versus in store, and to what degree.
Deloitte demonstrated displays with built-in intelligence that can determine the age and gender of the person viewing the display, and when and for how long they view it. There was also a markdown gun from Avery Dennison that scans products and applies markdowns to the items on the aisles. At Belk, marking down is currently a labor-intensive, tedious process involving writing in the markdowns by hand.
“Our goal is to test much, if not all, of what we saw at the fair, in very small, simple ways,” Curley said.
The Belk design studio launched July 15, spawning about 5,600 ideas as of February. The ideas submitted graduate through stages based on the number of views, positive votes and the comments they receive online. An idea can get to the expert review stage if it generates enough positive reaction. At that level, which includes executive vice presidents and innovation advisory boards, a decision to quick test is made within three weeks.
“We read through every idea, at least quickly, at a high level. Even those ideas that don’t move forward, we archive,” Curley said. “We are also looking at a way to catalogue them,” for future reference. “This is a great tool that sends a message to associates that great ideas can come from anyone, and that we want to capture their ideas,” Curley said.
One idea that came out of the design studio and was quick tested was for an iPad to display western boots so shoppers could readily scan the entire assortment without combing the aisles. The project has advanced to the piloting stage, involving iPads for women’s shoes being done in partnership with H.H. Brown, and is estimated costing $10,000 — well under the $25,000 cap. Asked what other concepts from the Design Studio might be tested, she replied, “We think we have opportunities in cosmetics,” but declined to elaborate.
The stage gate process has generated about 200 ideas, of which 30 were picked for feasibility plans, including one landing page on Belk’s Web site, called Sunday Best, targeting African-Americans and the church community. It’s become a permanent feature on the Web site.
“It was an assistant buyer who came up with that idea. We try to involve as many people as we can.”
In addition, Belk taps Edison Nation, the Charlotte-based inventors group that screens ideas for potential patents and for uniqueness.
“We’re looking at some product opportunities that relate to some key categories — probably 10 different challenges that can be anything from cookware to baby products to a celebrity line,” Curley said. Representatives from Edison Nation’s corporate office have presented about 40 ideas, six of which Belk is considering piloting.”
The innovation journey also involves college students enrolled in marketing, entrepreneurship and consulting classes. The students rove Belk’s selling floors for ideas and present competing projects on such subjects as how to expand the fine jewelry department and how to more effectively market to college students and Millennials, as well.
Students are from the five schools that Belk recruits from: North Carolina State, University of North Carolina in Chapel Hill, University of North Carolina in Charlotte, Virginia Tech and the University of South Carolina. A class from each school is divided into five teams. Each spends a semester conducting research on and shopping at Belk, and observing customers. A winning team from each school will be selected in late April for a final competition among the five schools on May 2, when they present before Tim and John Belk, president and chief operating officer, and Kathryn Bufano, president and chief merchandising officer. Prizes and scholarships are at stake, and the winning project advances to the pilot phase.
In addition, Belk involves three M.B.A. students, three undergraduates and a professor at UNC Chapel Hill in a fine jewelry challenge. This will complement some of the concepts Belk is already working on for the category. Belk operates fine jewelry departments in half of its stores and realizes that it’s not easy to just roll out the category across the entire chain, partly due to the cost of staffing. Executives believe, however, that the category could generate another $20 million in revenues with some innovation. Belk has been conducting weekly calls and monthly meetings with the UNC group, which has been coming back with recommendations.
“We have asked the students to think big and push the envelope,” Curley said. “We are pushing them to think even more creatively.”
BREEDING INNOVATION AND IDEAS
• Jam sessions, brainstorming online and in-person, with insiders and outsiders.
• The Belk Design Studio, taking the employee suggestion box to a sophisticated digital-age level.
• Stage Gate, an industry framework for identifying and piloting concepts.
• Tapping college classes to present projects to refine selling floors and marketing strategies.
• Edison Nation, an inventors group developing unique products or lines.