News

Belk’s Reinvention

BY CSA STAFF

Regional retailers are typically defined by geography, but Charlotte, N.C.-based Belk is a bit different than most. Distinguished by its signature Southern hospitality, the nation’s largest privately held department store chain has a dominant presence throughout the South and a footprint as far west as Oklahoma and north through Maryland. But its reach extends even farther, as Canadians and Californians alike shop its e-commerce site.

With 301 stores in 16 states, Belk recently completed its 10th consecutive quarter of comp-store sales growth and appears on target to top $4 billion in revenues this fiscal year. In 2010, the company launched a transformation to brand itself as a fashion-forward leader of modern style and an ambassador of the modern Southern lifestyle.

John R. Belk, president and COO, talked with Chain Store Age contributing editor Connie Gentry about the company reinvention and its investments in the future.

Belk recently announced a $600 million investment over a five-year period. What are the key components?

It began with our “Modern. Southern. Style.” campaign, which launched in October 2010. Within months we changed all the Belk logos to present a consistent image to our customers. And then we began investing in our stores to make them more relevant to costumers.

With this new brand, I always get the question: “Does that mean you’ll never expand out of the South?” The answer is no. Our intention is to be the best at satisfying the Southern lifestyle, wherever our customer happens to be. The Southern lifestyle is not locked into a geographic place; it’s about being friendly, colorful and energetic.

For now, we are focused primarily on our existing stores rather than developing new stores. We are investing around $250 million over the next three years to update the stores so they are more modern and fashion-forward. We are also repositioning some stores in existing markets, and expanding and remodeling stores when there is an opportunity to create a better merchandise flow and update departments to be more consistent with the brand. Every year, we update fixture programs to better present merchandise. This year we’ve put new fixtures in the kids’ area and added fixtures to our home store that better organizes “smart” home products and luggage.

With rebranding, have you seen a shift in the demographic profile of shoppers in your stores?

Yes. The customer base in our markets is growing more diverse, and our shoppers tend to be younger with more fashion-forward tastes. We follow our credit card data (almost 50% of purchases are made with Belk’s private-label credit card), and we see that the average age of our shopper has been decreasing by about a year each year. We also conduct a customer survey every two years. The results we just got back showed there is significant growth in our customer base of people who prefer fashion that we classify as modern, as opposed to classic or traditional.

Are there shifts in sales?

We have begun to see growth in our home store, and we’ve had a lot of success in kitchen electronics and with modern soft-home assortments that are relevant to our customers’ lifestyles. Also, we are seeing a resurgence of status brands, so we are allocating more space to those categories.

Are online sales growing as well?

Absolutely. In each of the last two years, online sales have grown by about 100%, and we think dramatic growth will continue going forward. To support it, we’re investing heavily in e-commerce, building better functionality, adding brands to the website and enhancing the fulfillment capability.

Our universe has grown beyond our geographic footprint. In fact, 22% of our e-commerce sales come from outside our 16-state footprint. Because of this, part of our branding campaign has embraced things that are national in scope. We sponsor the Belk Bowl, a college football bowl in Charlotte. We’ve begun to embrace more national advertising.

Do you track zip codes of customers to determine where to open stores?

We do, and we’ve begun a relationship with a third party that has a sophisticated model for identifying markets with the type of customer base we are looking for and that also analyzes the competitive situation in those markets. They’ve identified several markets across the U.S. where we could successfully open a store. Obviously we want to grow first in contiguous markets and through infill opportunities, but we’re certainly open to considering new markets. Within our 16-state footprint, most of our core business comes from seven or eight states. So we’ve got a lot of room to grow in states like Texas, Oklahoma, Louisiana, Maryland and Kentucky.

Are you looking at acquisitions?

Not now, but there could be some in our future. Again, we are really focused on growing and strengthening our existing store base.

Each Belk store is merchandised for its locale. How do you accomplish this?

Historically we had a buyer in every store, but that’s changed. Now we are investing in IT systems and tools that will give our merchants and planners better information about what is happening at the local level. We also have done a lot of process and strategy work with Kurt Salmon, and the genesis of that is a consistent process that the merchant and planning teams go through each season. Before, our merchants worked separate from our planners; now they sit together and operate as a team. We also added 41 positions, primarily in the planning world, that bring more science into the process of understanding what happens on a local level. We receive ongoing feedback from stores that tell us how we can grow the business.

Are there other strategic initiatives under way in store operations?

We have a strategic, multi-year program under the heading of Service Excellence that Deloitte has been helping us with. It started with a reorganization of all the task work that happened within a store. We weren’t doing the best job of getting merchandise out to the floor in a timely manner, so we’ve put best practices in place, and we’re doing a better job organizing merchandise for our customer.

Also, we changed the organizational structure within the stores, separated the selling teams from the support teams, and changed the compensation plan in the stores to make sure we have appropriate individual incentives in place. We added team incentives to make sure there is balance. Now we are working on the heart of the program, which is a five-step model that focuses on the behaviors and interactions the associate has with the customer. It encompasses everything from getting ready for the customer to closing the sale and then doing recovery work within the department. We expect to complete this rollout by the beginning of November.

Next year our major effort will be behind scheduling appropriately and automating task management. All of these key initiatives will continue to propel our growth.

Why does Belk maintain the unique position of being privately held but publicly reported?

People always wonder why a company would want to deal with the Securities and Exchange Commission but not have access to public equity markets. We believe this is a great place to be because it allows us to focus on the long term and invest for the long term even when we don’t necessarily get a quarterly payback. It also puts pressure on us to generate funds from operations so that we can invest significantly to change the company. Public reporting adds a lot of transparency and puts all the controls in place that any public company would follow. That’s the true DNA of our company: We want to run it as professionally as a publicly held company but invest with the long-term vision of a private, family-based business.

What is the Belk vision for the next five years?

We will continue to meet our brand message and be the retailer of choice for the Southern lifestyle, and to expand strategies around localization and personalization. We are focused on building our omni-channel presence, and we are investing significantly in technology to recognize our customer wherever she chooses to shop — by smartphone, at home, in-store.

There are plans to change our POS equipment, increase mobile applications in stores, build the capability to buy online and pick up in store, put WiFi capability in the stores, and maintain a common customer database.

In our vision, the customer is being elevated. The Internet has driven information to the customer, and we want to better satisfy what she is looking for. Developing long-range plans is exciting, scary and energizing. Change presents uncertainty, but it also presents opportunity to do an even better job of fulfilling our mission and vision.

keyboard_arrow_downCOMMENTS

Leave a Reply

E.Villanueva says:
Apr-20-2013 06:47 am

Impressive
I did enjoy reading articles posted on this site. They are impressive and has a lot of useful information. pressroom

E.Villanueva says:
Apr-20-2013 06:47 am

I did enjoy reading articles posted on this site. They are impressive and has a lot of useful information. pressroom

A.Hotham says:
Apr-18-2013 02:16 am

Good to hear that you are
Good to hear that you are persevere by your job and you focus to obtain your goal for your success. In our company, we can give Free PSN Codes for those outstanding employees that can give honor to their field and to the company they work for.

A.Hotham says:
Apr-18-2013 02:16 am

Good to hear that you are persevere by your job and you focus to obtain your goal for your success. In our company, we can give Free PSN Codes for those outstanding employees that can give honor to their field and to the company they work for.

Polls

Consumer confidence is high. Is that reflected in your stores’ revenues?

View Results

Loading ... Loading ...
News

Uniqlo’s Mall Play

BY Marianne Wilson

Uniqlo has made its first move in an ambitious plan to become a major presence in shopping malls throughout the nation. The company, Japan’s largest retailer and a division of Fast Retailing Co., has jump-started its U.S. expansion with the opening of a 43,000-sq.-ft. store in Westfield Garden State Plaza, Paramus, N.J.

The two-level location is Uniqlo’s largest mall store in the world and will serve as the prototype for the retailer’s U.S. mall expansion. This is not, however, the chain’s first foray into the suburbs. In 2005, Uniqlo crept in under the radar and opened three New Jersey mall locations. In 2006, it opened a much larger store, in Manhattan’s SoHo area. The SoHo location flourished; the mall stores did not.

“Following the immense success of the first New York location, we revised our strategy for the U.S. market and decided to close the three small New Jersey locations to launch large-scale flagships in targeted areas of Manhattan,” explained Shin Odake, CEO, Uniqlo USA.

Following a pattern set by such other successful retail imports as H&M, Uniqlo has used its three New York City flagships to build brand awareness, venturing out into the mall only after it created a stir — and a name for itself — in the big city. Savvy marketing, pop-up stores and buzz-generating advertising over the past couple of years have upped its profile — and cool quotient — substantially. So has its high-tech, ultra-modern store design (by Wonderwall, a cutting-edge, Tokyo-based firm).

Indeed, the new Paramus location has little in common with the bland, vanilla boxes the company opened in 2005. Similar to Uniqlo’s Manhattan locations, it is sleek and streamlined, with a clean, modern aesthetic and a high-tech vibe. It also has the same variety of product, with basic items stacked in precise rows according to color.

The new Uniqlo also has lots of visual excitement, with 38 LCD/LED monitors and 200 mannequins. The store, which replaced an Old Navy, has a separate street entrance in addition to a mall entry. The facade — set off with dramatically lit signage and illuminated glass display windows featuring mannequins outfitted in the latest fashions — stands out like a beacon.

The mall entry boasts an interactive LCD display, imported from Japan, that plays games and other activities.

“It’s a fun element,” Odake said. “Customers can play games on it.”

Uniqlo’s overall feel is in sync with the clothing (men’s, women’s and children’s) on display. With its “Made for All” mantra, the brand is known for affordable threads that combine basic styling with high-tech fabrics, such as its heat-retaining and moisture-resistant Heattech line. (A series of recent designer collaborations have added more fashion-forward items to the mix.)

“Everyone focuses on trend,” Odake said. “But our focus is how to bring innovation to core basics. Another focus is product quality.”

While the Paramus store is billed as the brand’s mall prototype, the look is likely to evolve over time, according to Odake. Not all stores, for example, will be as large as 40,000 sq. ft.

“In some areas, the stores will be smaller,” he said. “It will really depend on the real estate and be a case-by-case situation.”

Uniqlo, which operates some 1,100 locations in 13 countries, has set itself an ambitious goal of ringing up $50 billion in global sales by 2020. With its growth cooling in Japan, overseas expansion is crucial to its plans. It is targeting $10 billion in revenue in the United States by 2020.

“We will open more than 10 stores here in 2013,” Odake said. Most of those stores will be in the New York City and San Francisco metro areas (see story, below).

But physical stores are only part of Uniqlo’s strategy. At press time, the company was set to launch an American e-commerce site. (It already operates e-commerce businesses in several countries, including Japan, China and the United Kingdom). The site, designed with Razorfish and Digitas, will reportedly offer everything the stores do, but with an expanded lineup of sizes and colors. In addition to bringing in revenue, the site will allow Uniqlo to judge potential areas for new stores going forward.

LEARNINGS: While the vastness of the U.S. market and the nation’s passion for shopping make it attractive to foreign retailers, they also face a big learning curve, Odake said.

“There is so much diversity here in terms of what sells from store to store,” he explained. “By contrast, Japan is a very homogenous society.”

There are other differences as well. “Dresses, for example, are more important to the women’s product line here than in Japan,” Odake said.

There are also operational challenges. Customer service is a top priority at Uniqlo. In Japan, be it in an upscale boutique or discount chain, Odake explained, customers automatically expect good service. Uniqlo wants to upgrade U.S. shoppers’ expectations here also. Key to that is duplicating the company’s store-centric philosophy, which has been integral to its success in Japan.

“It involves everyone having a store owner’s mind-set, including the sales associates,” Odake said. “Creating that culture here is a big challenge. We believe we need to hire American managers who understand the concept.” (The Paramus store is Uniqlo’s first ever with an American general manager.)

Rather than hire from other retailers, Uniqlo has established relationships with different U.S. colleges and is recruiting on their campuses.

“We found it’s much quicker to train them on our own,” Odake said.

Uniqlo believes in giving store associates a lot of responsibility.

“If you give them more responsibility, they are more motivated,” Odake said. “We promote from within in Japan, and with store associates moving up to store managers and corporate. We hope to do that here too.”

The Japanese executive noted that the United States is very open to all retailers but that competition is fierce.

“U.S. consumers are very honest,” Odake said. “They don’t care whether you are from here or not. They want great merchandise at a great price. In some other countries, heritage matters more than the concept. The competition here has made us realize our strengths and weaknesses. We are learning every day.”

[email protected]

keyboard_arrow_downCOMMENTS

Leave a Reply

janan says:
Apr-24-2013 09:21 pm

bestsoccerplayer
bestsoccerplayer Nicely presented information in this post, I prefer to read this kind of stuff. The quality of content is fine and the conclusion is fine.

janan says:
Apr-24-2013 09:21 pm

bestsoccerplayer Nicely presented information in this post, I prefer to read this kind of stuff. The quality of content is fine and the conclusion is fine.

F.Pamela says:
Mar-25-2013 07:37 am

The computer fashioned with
The computer fashioned with Razor fish and Digits gift reportedly pay everything the stores do but with an expanded roll of sizes and colors.In element to bringing in income http://www.exactdumps.com/642-642.html

F.Pamela says:
Mar-25-2013 07:37 am

The computer fashioned with Razor fish and Digits gift reportedly pay everything the stores do but with an expanded roll of sizes and colors.In element to bringing in income http://www.exactdumps.com/642-642.html

P.Lab says:
Mar-06-2013 08:49 pm

“It involves everyone having
“It involves everyone having a store owner’s mind-set, including the sales associates,” Odake said. “Creating that culture here is a big challenge. We believe we need to hire American managers who understand the concept.” (The Paramus store is Uniqlo’s first ever with an American general manager.)superiorpapers.com

P.Lab says:
Mar-06-2013 08:49 pm

“It involves everyone having a store owner’s mind-set, including the sales associates,” Odake said. “Creating that culture here is a big challenge. We believe we need to hire American managers who understand the concept.” (The Paramus store is Uniqlo’s first ever with an American general manager.)superiorpapers.com

C.Carl says:
Mar-06-2013 10:26 am

Reply
The vastness of the market and the public interest in shopping contributes to the increasing traffic. It is developing day-by-day to enhance the marketing ideas. I think it is awesome to have shifts in these facts. jack herer seed

C.Carl says:
Mar-06-2013 10:26 am

The vastness of the market and the public interest in shopping contributes to the increasing traffic. It is developing day-by-day to enhance the marketing ideas. I think it is awesome to have shifts in these facts. jack herer seed

Polls

Consumer confidence is high. Is that reflected in your stores’ revenues?

View Results

Loading ... Loading ...
News

And the Unhappiest Shoppers Are…

BY Marianne Wilson

As we head into November, I find myself inundated with holiday surveys, with experts weighing in on everything from the busiest shopping days of the season to the impact of smartphones. To be honest, all of the data seem to blend together after a while, leaving me dizzy with projections and predictions.

A recently released survey by global design consultancy Fitch provides a refreshing break from all the holiday chatter. It’s the type of survey I like best — full of consumer insights. Among the more interesting was that as women age, they find the shopping experience less enjoyable. The most fulfilled female shopper is between 16 and 24 years of age. The results suggest that stores are designed for the young, which translates into a big opportunity for retailers to redress the balance.

The Fitch study is titled “The Joy of Shopping.” But as it turns out, the joy is not the same across the board. Consider these findings:

• The British are the most unhappy shoppers in the world, with only 21% claiming to enjoy shopping.

• The Chinese are most enthusiastic shoppers, with 55% enjoying shopping.

• By category, the highest levels of shoppers’ enthusiasm were found in electronics, with 43% of consumers calling themselves very enthusiastic, while 40% enjoy the experience.

• When it comes to shopping for fashion, 37.4% of consumers are enthusiasts and 51.9% enjoy it.

• There are wide disparities by country when it comes to shopping. Shoppers in the emerging markets of China, India and Brazil are much more enthusiastic and satisfied in their shopping experiences than their counterparts in more mature markets.

The survey also drove home something that too often gets lost in the rush to embrace digital retail: Brick-and-mortar stores are in no danger of going away soon. Shoppers across the world still see physical stores as the most preferred shopping channel. In fact, 54% of respondents rated physical stores as the most preferred shopping channel, while 30% preferred the Web. (The Internet, however, is seen to be significantly more important in emerging markets than in more mature markets.)

That is not to say, however, that retailers can put blinders on when it comes to the future. Don’t think off- or online, according to Fitch; think seamless. The days of silo retail are over. As the study puts it:

“Don’t look at store design or operations in isolation. Consider your retail experience in totality, as a matrix, and look for ways to enhance shopper experiences across channels and mind-states. Help your shoppers move through your experience, effortlessly and on their terms.”

*****

There is still time to enter a nomination for our “Rising Stars: 20 Under 40” awards, which will recognize retailers who are making their marks in their companies and in the retail industry.

To enter, send your nominations to me at [email protected] Please include nominee’s name, title, company, phone number or email address, and a short statement (no more than 200 words) as to why the nominee merits recognition as a “Rising Star.” But remember: Only individuals who are under 40 as of Jan. 1, 2013, are eligible for consideration.

[email protected]

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

Polls

Consumer confidence is high. Is that reflected in your stores’ revenues?

View Results

Loading ... Loading ...