The three phases of an omnichannel evolution

Industry Insight

Retail has become broader over the years, a trend expedited the internet. In the past, a retailer may have been defined by their brick-and-mortar stores, but that’s no longer the case, with eCommerce operations becoming paramount to a successful business. Consumers are now looking for an omnichannel shopping experience. To them, it doesn’t matter if they are shopping online, through mobile devices or in a physical store, as long as they can buy the goods they need.

For traditional retailers, evolution is a necessity. If they can’t meet the demands of the omnichannel shopper, they are leaving sales on the table and losing ground to their competitors. Department store chain Belk is one of the many retail businesses trying to take the step and transform the way it engages with consumers. The merchant is currently on a quest to grow beyond its 16-state store footprint and become a true omnichannel competitor, Retail Online Integration reports.

Tim Belk, chairman and CEO of Belk, recently spoke at the National Retail Federation’s Big Show 2013 earlier this month. As a part of his keynote speech, he detailed Belk’s transformation into an omnichannel retailer. This was a reactionary change, with Belk noting three specific changes in his customers: They preferred modern brands over traditional ones, wanted a more engaging in-store experience and desired the ability to interact with Belk through a variety of channels.

To make the omnichannel transition, Belk set aside $600 million, with nearly half of it ($263 million) designated to investments in new technology that would better serve this new breed of customer. The end goal was to improve the Belk in three specific ways:

1. Grow eCommerce operations
Belk originated as a brick-and-mortar store, but the company is jumping feet first into eCommerce. In 2011, only 3.3 percent of the retailer’s sales were generated online – Belk hopes to hit 10 percent by 2015. To hit that goal, the merchant has spent a lot of money on mobile applications and web development to appeal to modern consumers.

On the backend, Belk is also focusing on drop-ship programs with product suppliers and improving its eCommerce fulfillment center. Belk wants to maximize the quality of its eCommerce program, and order management and shipping will be pivotal to that.

2. Out with the old, in with the new
When companies are going through such radical transformations, it’s important that all the equipment they use is flexible. Belk replaced much of its IT infrastructure and merchandising platform because they couldn’t scale with the upward growth the company wanted due to their old age. While Belk is only 17 months into a 27-month upgrade process, the merchant is optimistic that it will be better suited to operate with the new technology.

3. Go omnichannel
Over the next few years, Belk hopes to fully embrace the omnichannel consumer by replacing its eCommerce platform, switching out the point-of-sale system, expand mobile offerings, integrate customer data and establish enterprise inventory.

Consumers are spending more money shopping online and with their mobile devices, so retailers need to accommodate for these new habits. Through the third quarter of 2012, consumers had spent upward of $120 million through eCommerce according to comScore, a number that has shown consistent double-digit growth over the past two years.

Merchants need to react by using the appropriate eCommerce software that will help them manage inventory, orders and shipping of these sales.