quarter peak holiday selling season, Belk implemented its remaining 200-plus stores in additional waves to go live on Reflexis in all stores.

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1 CASE STUDY: BELK Reflexis has made a positive impact on everything from service, sales, associate engagement, and management on the sales floor. - Eric Bass, SVP, Store Operations, Staffing & Productivity, Belk Belk implements Reflexis Workforce Management and Analytics Solutions to Increase Sales, Provide a Better Customer Experience, and Improve Employee Satisfaction Belk, Inc., the largest family owned and operated fashion department store in the United States, is in the midst of a major transformational initiative to deliver a seamless and satisfying experience to customers across all shopping channels in-store, online and mobile. As part of this initiative, the company reviewed its labor management processes and how it could better align sales floor coverage with customer demand and improve the shopping experience in its 300 stores. Belk determined that implementing a centralized workforce management solution was a critical component in effectively managing store labor, improving associate and shopper engagement, and providing a higher quality of work-life for employees. The company required a system that could be effectively deployed across a widely distributed workforce. The system needed to accommodate complex labor scheduling changes and enable the collection and analysis of a wide range of workforce and customer data. The system also had to integrate with existing internal and third party corporate systems and allow for localization at individual stores. The company issued a Request for Proposal for workforce management to several leading software providers. Reflexis was selected for its functionality, ease of use, and high configurability to support stores unique attributes. Other factors in the decisions were the Reflexis track record of fast implementations and excellent customer service and the software company s platform of integrated solutions based on a common architecture. Due to the high configurability of the Reflexis systems, the two companies working together were able to rapidly map Belk s requirements into the workforce management platform. Within approximately 12 months, the first few stores were up and running in pilot mode on all of the Reflexis modules. Belk rolled out the solutions in waves of about 40 stores each. After a deliberate pause in the implementation process during the fourth

2 quarter peak holiday selling season, Belk implemented its remaining 200-plus stores in additional waves to go live on Reflexis in all stores. Reflexis Benefits: Increased Sales, Higher Customer Satisfaction, Employee Self- Service, and Better Associate Quality of Work Life The Reflexis platform of task management, labor scheduling, time and attendance, employee self-service, and advanced labor operations reporting and analytics provides numerous benefits to Belk according to Eric Bass, Senior Vice President of Store Operations, Staffing, and Productivity: Store managers now spend much less time in the office writing schedules so they can spend more time on the sales floor. The most important space on our floor is the 3 feet between an associate, a manager, and a customer, Bass says. We need [employees] out there greeting customers, talking to them to understand their needs. Reflexis allows them to do that. Better use of workforce and customer data to align sales floor coverage with customer demand. We ve seen a huge improvement in analytics in understanding how can we optimize our labor spend and how can we get traffic on the floor when the customer is there, he says. Labor scheduling and time and attendance integration improves schedule compliance. We ve seen a substantial reduction in payroll cost without taking any hours off the sales floor, according to Bass. That s just from better aligning associates punches to when their schedule is. Employee self-service improves associate engagement and work life quality. With the Employee Self-Service module, they are very engaged in creating their own schedules. They ve had better buy-in to the solution and they better understand now why we need them during key periods, Bass explains. Return on Investment: Increased Sales, Reduced Labor Spend, Higher Customer Satisfaction The impact of Reflexis has been multi-faceted, Bass says. Reflexis has made a positive impact on everything from service, sales, associate engagement, and management on the sales floor. But how exactly do those benefits translate to Belk s bottom line? As Belk implemented Reflexis, they measured performance of stores that had rolled out Reflexis in their stores compared to control stores that were not yet using the new solutions. The Return on Investment Belk saw in stores running Reflexis was impressive including: 80 Basis Point increase in sales. When you start talking about an almost 100 basis point lift in sales on a $4 billion dollar organization, that s real money going to the bank, Bass says. (Note: An 80 BPS improvement translates to an annual increase in sales of about $31 million.) $5 million reduction in annual payroll. This figure includes redeploying hours to when Belk most needed them and reducing associate out-of-schedule punch-ins.

3 $1.7 million reduction in annual payroll, which was reinvested with the customer. The reduction was made possible by reducing meal break variances and early punches from about 8 minutes per shift to less than 1 minute per shift. 500 basis point lift in customer service scores. The non-reflexis stores were running just under 74% of surveyed customers being highly satisfied. The stores running Reflexis had scores as high as 78% highly satisfied. Reflexis Analytics and Reporting Drives Better Decisions and Change Management In addition to accomplishing the goals of increasing sales and providing better customer service, Belk uses Reflexis Advanced Analytics and Reporting to easily and rapidly visualize massive quantities of workforce and customer data to identify new opportunities in its labor operations practices and implement them in their stores. We have implemented a standard set of core dashboard reporting, says Scott Delmar, Director of Workforce Implementation. And due to the flexibility of the system, we also can develop new reports and views without having to bother IT. We can rewrite and modify reports on our own as a business group. The drag and drop system lets us filter, summarize, cross-tab, re-sort, export data into Excel, and combine it with any other information. We can also easily distribute the reports by exporting data into a PDF. It s very simple and easy and everything is just a couple of clicks away. Delmar stresses that the Reflexis reporting system is a major component of its overall change management processes. The reports allow Belk management to work with store and department managers to support decisions that optimize efficiencies and customer service but which employees may have resisted because of the age-old argument: But that s not how we ve done things in the past. He provides as one example the scheduling of associates on the sales floor during the initial opening and closing of a store. We had some managers who insisted that they always had to open a specific department with five people, for example. They d tell us, `We can t possibly open this department with fewer than five people. But the Reflexis reporting system allowed corporate planners and directors to share data with store managers in support of new scheduling processes. We can now show them a `Demand versus Scheduled Hours report that graphically shows the customer service and other workloads required in say, the first hour and a half of time in the store and compare that to the required number of employees. We can similarly do that around our store closing processes. Reflexis enables us to take massive amounts of data, put it in easily translatable and understandable formats, and have fact-based discussions with store managers that lead to better decision making. The system also enables Belk to coach store and department managers and improve their performance. Delmar provides as an example the Clock Override report that enables Belk to rapidly identify store managers who are approving employee working practices in contravention with the rules-based schedules. We then discuss the situation with the manager to determine the reason and potentially institute corrective measures.

4 A third example (of many) is the Reflexis system helps Belk to determine inconsistencies in the scheduling of part-time and full-time employees and get a better picture of a store or department s effective hourly rate. The Reflexis system helps us get more precise and provide very specific direction about shifts and personnel hiring decisions. For example, we can easily identify times of a week that are consistently underscheduled in a department, which could have a potential negative impact on service levels. We can then recommend that the store manager hire an additional part-time associate to better cover those blocks of time. Belk Balances Associates Preferences While Achieving its Business Goals By implementing Reflexis Workforce Manager, Belk was able to better match its customer service and profitability goals by staffing the right number of people during peak periods of the day and reducing the number of associates on the floor during slower hours. But another benefit of the implementation one that impacts employee morale and loyalty to the company was how Belk used the combination of Reflexis Workforce Manager and Reflexis Advanced Analytics and Reporting (powered by Cognos BI 10.2) to enable store managers and associates to have input into the scheduling process to take into consideration employee preferences and schedule fairness. Other retailers had recently been in the news regarding their automated labor scheduling software and received negative comments from employees and customers alike for ultra-optimized schedules that scheduled workers to close and then open a store the next day. This resulted in disgruntled employees, resistance to the new system, and at least one article in a major news outlet that cast the retailer in a very negative light. Belk decided to take a balanced approach that would take advantage of the Reflexis software s capabilities to help the company achieve its business and customer service goals while creating value for its associates. Rather than force store employees and store managers to comply with the new software s schedules, Belk allowed store managers to edit the schedules to ensure employees had days or hours off that they needed. But allowing schedule edits by store managers was not done in a vacuum. Belk formed a central workforce team responsible for analyzing schedule edits to better understand the reasons and benefits. Using Reflexis Advanced Analytics and Reporting, the company was able to quickly determine which edits were not productive, Belk worked with its store managers through weekly conference calls and one-on-one coaching discussions to encourage compliance where the schedule made good business sense. The Reflexis reporting tool takes all of the angst out of Big Data, Delmar says. With it, we have hundreds of millions of rows of data at our fingertips, and it makes it easy to understand. We can now answer a question by looking at 700,000 shifts in about 2 minutes, right in the middle of a conference call with store managers. The tool enables

5 all of us to make rational decisions to do what s best for both the business and associates. In summarizing the implementation of Reflexis, Delmar remarks: We have achieved all of our objectives, and are very pleased with the level of partnership and customer service we receive from Reflexis. For more information on the benefits Belk realized with Reflexis, you can view the videos here and here. Copyright Reflexis Systems, Inc. All rights reserved. Reflexis and the Reflexis logo are trademarks of Reflexis Systems, Inc. All other company and product names referenced herein are the trademark or registered trademarks of their respective holders. info@reflexisinc.com Americas: Europe: