Operations & Fulfillment: Fulfilling the Promise of E-Commerce

Belk, Inc. is making all the right moves around improving its warehouse and fulfillment operations to meet the needs of its growing e-commerce business.

Belk, based in Charlotte, N.C., has more than 300 fashion department stores in 16 Southern states, with sales totaling $3.7 billion in its latest fiscal year. It also has a thriving e-commerce business that has seen sales from the channel "increase 108 percent over last year," according to Bill Kiger, director of web operations at Belk.

Until recently, Belk fulfilled all of its direct-to-consumer business in-house via its e-commerce fulfillment center in Pineville, N.C. Last May, the facility was expanded to double its original size, roughly 250,000 square feet. However, because of its growing e-commerce business, Belk quickly realized it needed even more space.

"We expanded our facility in Pineville in 2011, but given the growth in our e-commerce business, we quickly realized we were going to need additional square footage to support our needs," says Debbie Fortnum, vice president of supply chain at Belk. "We did the expansion in our initial facility thinking the extra space would last us a couple of years, but by the end of the calendar year 2011, just several months after the expansion, we realized we needed additional space, and we needed it quickly."

Enter Belk's new 515,000-square-foot e-commerce fulfillment center located in Jonesville, S.C., which opened in June. The center, a $4.5 million capital investment, was formerly a direct-to-consumer fulfillment facility operated by Disney. The facility is being leased by Belk, and the company is expected to create at least 124 jobs at the center over the next five years.

"We were fortunate to find the center," says Fortnum. "It was well-suited to our business. It serves us well from a location perspective, and the available workforce in the area is really great." What's more, "there's high unemployment in Union County, where Jonesville is located, so we were happy to have an impact on that by hiring so many former Disney employees and others who were without jobs."

A Whole New Fulfillment Operation
"Getting the facility up and running in about six months was challenging on a number of levels," recalls Fortnum. Not only did Belk have to open the distribution center and train employees on the day-to-day operations quickly, it had to install a new order management system that would split the fulfillment of orders between the two facilities. Prior to the the new facility in Jonesville, the Pineville center processed all categories of e-commerce merchandise. Now home and shoe orders are being fulfilled at the Jonesville facility, while everything else is handled at the Pineville center. So if a customer buys both shoes and apparel from Belk.com, the retailer's new "Distributed Order Management" system, implemented in partnership with Manhattan Associates, is able to correctly and seamlessly communicate and split the order between the two facilities.

Wha's more, the new order management system will help facilitate another initiative in Belk's direct-to-consumer business. Launching in early 2013, Belk will have a new vendor-direct program that enables customers' orders that include merchandise not inventoried in one of Belk's fulfillment centers to be fulfilled and shipped directly by vendors. With the functionality of its order management system, vendors will receive order requests and will be able to act as extensions of Belk's own fulfillment centers.

"This program will give us the opportunity to expand upon the sizes, styles and product categories we already have on our website today," Kiger says. "We will fulfill orders from our Pineville or Jonesville facilities, as well as directly from our vendor partners, enabling us to offer a broader, more dynamic product assortment to customers.

"Currently, we may offer consumers a particular men's style shoe in regular sizes from seven to 12 only. But now, if we choose, we can offer additional fringe sizes such as 13, 14 or 15 of the same style shoe without having to stock the additional sizes in-house."