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With fiercely competitive pressure and thin margins in retail world, retailers make an effort to keep their business in top-line growth. In order to remove unwarranted expenses, such as sales lift and payroll savings from the retail business to boost profits. Thus, enabling the labor-efficient and remodeling the existence of system, the retail brands could adopt state of the art scheduling software that introduces new technology into the project. Belk Inc. is a well-known company that has experienced several challenges since 2013. A new era started for Belk Inc. after the second generation of Belk Inc. leader John M. Belk was dead, then the new CEO Thomas M. “Tim” Belk became the CEO in 2004. Also Belk Inc. appointed the Eric Bass who is the centerpiece of the Belk Inc. of Staffing and Productivity in August 2010. During his reign, he tried to resolve the scheduling problems with Scott Delmer, and Reflexis Systems, Inc. in 2013. The purpose of this evaluation is to determine if the automated software of retail labor scheduling could improve allocation of resources through big data approach at Belk Inc. In our opinion, working with Reflexis was a strategic move as it took advanced analytics and aggregated data on edit volume that enable the system to cope with staff rotation. In order to fully understand the new chances in Belk Inc. ’s capabilities of sales associates and employing shift workers practices in their store by using Reflexis system. Thus, it was easy to report and add additional customer data to examine the great amount of workforce anytime based on measuring the value of schedule effectiveness.
By 2013, Belk Inc. faced with two significant issues of running the Reflexis system and improving the allocation of labor operations. Although early results got much of a good impression of high volume edits on Reflexis schedules, the measurements of schedule effectiveness didn’t work well as expected. Furthermore, since Belk Inc. teamed partner with Reflexis, and the shortcoming of edits showed over 60% of shifts were manually corrected by store managers. Possible reasons that could be attributed to Belk Inc. ’s poor performance are a noticeable trend of merger and acquisition, such as Macy, in the retail industry and the rise of discount retailers, such as Walmart, and online shopping platforms, such as Amazon. Population usually shop from cities to suburbs with companies like Walmart but Belk Inc. brands are only sold at large stores in downtown. In the past, retail stores make an attempt to manage manual schedules on a weekly basis by store managers through Internet. Belk Inc. used to examine the lower performance of schedule effectiveness among three pilot stores in the northern, southern, and western separately. This does not bring a company success due to new lead tide with the amount of competition on the market accompanied by third millennium generations. In other words, it shows adverse effects on the sales due to wage expenses, higher cost of goods sold in net profit margin sector in the retail industry
“Our managers are spending a lot less time in the back office writing schedules. We need them on the sales floor. The most important space on our floor is that three feet between the associate, a manager and a customer. ” Eric Bass, Belk stated in an interview with Retail TouchPoints. In addition to better resolve problems of aligning labor operations with customer traffic, there is a dramatic change at Belk Inc. Belk Inc. implemented centralized workforce management solutions to fix its store labor working efficiency infrastructure. To reach these goals, Belk Inc. contract with Reflexis in 2012 and introduced two Reflexis systems into company. One is Reflexis Workforce Manager™ and the other is Reflexis Advanced Analytics and Reporting™.
Using these solutions, Bass was focused on improving its system management to evaluate the efficiency of an investment based on Return on Investment (ROI) measurement. To examine ROI performance on Belk Inc. , including expected sales revenue, the length of shifts for part-time and full-time workers spend, and customer satisfaction. After rolling out Reflexis system which was with an analytics package in 2013, company was impressive by increase in sales revenue, reducing the annual payroll and higher customer service scores than before. For example, Belk Inc. earn approximately $31 million by increasing 80 Basis Points sales revenue and decreasing $1. 7 million payroll from short time per shift. Additionally, the reduction of annual payroll by $5 million from reallocation hours and the rising of customer service scores by 500 basis points. The system could potentially improve Belk Inc. brick-and mortar business of sales which would allow them to manage edits for their large workforce whilst consuming substantial resources and creating customer service performance.
Belk has seen rising volume of edits across six stores were too high after implementing the system with Reflexis and we attribute this to the fact that the number of software bugs need to fix it before the expansion in 2014. Moreover, store-level implementation was chaos whether store managers could conquer the fear of system or not. Workforce management solutions could help improve worker effectiveness and employee satisfaction simultaneously that could differentiate the Belk Inc. ’s brands from each other but does not seem sufficient to increase its sales as opposed to its rival, Macy. Belk Inc. has experienced a specific decline in sales according to table 1 in the appendices. Even if Belk Inc. has improved its sales revenue to $4, 175, 000 and sales per store to $14, 100. However, the company still cannot beat its components (Macy’s) in 2011, 2013, 2015. This could be because of its cost of goods sold growing higher and higher from 2012 to 2015 three months ended numbers and also its lack of competitive advantage. Additionally, the target customer group of traditional department stores has reduced due to the increasing tolerance of online shopping platforms in the American retail industry. During 2016 Q4 and 2017 Q4, online shopping percentage accounts for 14% and 15. 5% respectively on Holiday.
Moreover, Belk Inc. needs to move away from manual scheduling system and use better software schedule system to implement a more unique brands that would appeal to its target group. Belk Inc. should strengthen its online website as a secondary tool of shaping the brands and as guidance for their customers. Implications and conclusions In summary, Belk Inc. might have taken it too fast by introducing the Reflexis systems of the brand as it might lack IT vision. We suggest Belk Inc. to continue using the Reflexis approach to improve working efficiency and build up consumer satisfaction. Firstly, Belk Inc. needs to reposition itself on the market to match with its customer service and profitable goals by flexible labor resources.
Belk Inc. should take two initiatives to examine staffing, one is during peak time with proper number of worker and the other is during slower periods with the reduction of number of people on the floor. According to research, flexibility have the linear connection between sales and profitability, and have a great impact on flexible labor resources and store performance. Secondly, improve store-level implementation by manager turnover. Apart from systems, Belk Inc. store managers train and manage shift of labor on a weekly basis, nonetheless, the key issue result in senior store managers departs would be coordination costs and the cooperation between labor and task.
The reason why store managers departs because of employee resistance to the new software system. Work rotation would gradually be replaced by system and the tide of online shopping. Thus, Belk Inc. should apply balanced approach by human and system at the same time. Using Reflexis software help the company achieve its sales goal and meet customer needs, while forcing store managers and store labors to abide by the new rules. As a matter of fact, Belk Inc. believed human can beat the system, in other words, company allowed store managers to edit the schedules to arrange the proper time for store workers.
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