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Belk: Upping the Digital Ante

The retailer is throwing substantial resources into building an omnichannel strategy.

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Belk might have a genteel Southern style when it comes to service, but it has a hard-nosed approach to innovation and technology associated with the Northeast or Silicon Valley.

The retailer has been working to align digital sales and physical stores. Belk’s e-commerce site’s sales are equivalent to the chain’s largest store, according to Jessica Graham, vice president of communications and community relations. It expects to generate about $135 million in fiscal 2013 sales. The goal is to reach 10 percent of sales by 2015. Mobile is expected to contribute 21 percent of the e-commerce site’s traffic this year, up from 14 percent in 2012. And Belk believes its modern Southern style can be exported to other regions of the country.

The e-commerce site was redesigned in 2008, but Belk continues to develop and improve it. “The current belk.com capabilities are being upgraded continually as we grow the business,” Graham said. “The site is under review as a part of the omnichannel effort.”


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That effort was discussed at January’s National Retail Federation Big Show at the Jacob K. Javits Convention Center in Manhattan by Tim Belk, chairman and chief executive officer, who set the company’s priorities as replatforming and accelerating sales in e-commerce; investing and growing in mobile; creating a road map to omnichannel, including replacing point-of-sale systems; integrating data and establishing enterprise inventory, and updating infrastructure and merchandise systems, which he called an “OMG” moment.

Sales associates will have tablets at their fingertips to help customers in stores by searching inventory for products or suggesting complementary items for products they bought online.

Belk stressed that the path to omnichannel is not clear, nor are there any how-to guides.

“There will be many tests and experiments,” he said. “Innovation is a skill that we must build as we move into the future. Technology in retail has accelerated the pace of change. We’re emphasizing the rate of change, risk-taking and learning from failure.”

The retailer hasn’t shied away from investing in technology, however. It’s pouring $263 million into omnichannel initiatives over four years.

In December, Adam Orvos, chief financial officer, said the retailer will add 150 employees concentrated in information technology and e-commerce as part of Belk’s overall omnichannel strategy.

“This is the fastest-growing part of our company,” Orvos said. “We’re investing in the company and hiring talent to build out these digital capabilities, which will be a cornerstone of this growth.”

Belk in January hired Dorlisa Flur as executive vice president of omnichannel, a new position. She was previously vice chairman of strategy and chief administration officer of Family Dollar Stores. The appointment is part of a strategy to better integrate e-commerce and digital sales with sales at brick-and-mortar stores. At the time, Belk listed Flur’s responsibilities as leading a team of e-commerce, IT and store employees.

Over the next three or four years, the retailer’s initiatives include revamping its e-commerce site on a new software platform, replacing store point-of-sale systems, updating mobile apps, installing customer data warehousing and analytics technologies and establishing a Belk-wide inventory system instead of keeping store and e-commerce inventory separate.

 

Tim Belk believes that partnerships with technology providers are becoming much more important. “Amazon, Google, Facebook and Apple are the technology titans,” he said. “We can leverage their strengths and learn from them.”

The operating model is changing for retailers. “Omnichannel is forcing us to rethink things like who gets credit for sales online or in the store, shifts in supply chains, real estate strategy and the right skill sets and organizational charts to drive the changes,” he added.

Only a few years ago, Belk was lagging in the digital world, but sales data convinced executives that the rewards of omnichannel integration could be powerful. The company’s research showed that online-only shoppers spent $100 a year, in-store shoppers spent $350 a year, and shoppers of both the Web site and stores spent $1,064 a year.

Belk invested heavily in a program supporting omnichannel goals while remaining true to its Southern-style roots. Consumers shopping across multiple channels are spending three to 10 times more than customers shopping in a single channel.

The retailer is capitalizing on its investments with marketing efforts to increase awareness of belk.com. Said Graham, “Stores are capturing customer e-mail addresses to increase our customer database and increase e-mail marketing traffic, which drives in-store and online shopping.”

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