Boscov's IT gurus developing growth online

In the busiest week of the year for United Parcel Service, the Boscov's loading dock at Neshaminy Mall was a bustling gateway Monday. A 48-foot trailer stuffed with online orders had already been hauled away, and UPS driver Bob Young was back for more.

"What I scanned was 2,311 pieces," Young said before loading a 24-foot truck with another big stash.

The shipping giant would pick up a projected 34 million packages globally Monday, its most hectic day of the year. But Boscov's Department Stores Inc., the modest family-owned retailer, was showing that you don't need to be big and brawny to muscle into the online market.

The Reading-based chain not only has regained profitability and expanded to 43 stores since longtime president Albert Boscov rescued it from a 2008 bankruptcy, it has also boosted Internet retailing with a carefully crafted approach notable for its simplicity.

Rather than building multimillion-dollar warehouses with robotic systems to fulfill Internet orders exclusively - and eschewing same-day delivery at any cost - Boscov's is filling growing Internet orders at its stores with in-the-flesh workers, in about two days, using UPS and the U.S. Postal Service, often free.

It's a model, Boscov's leaders explained, that is profitably leading to 30 percent online-revenue growth annually. And even competitors such as Macy's and Nordstrom are increasingly looking to fill online orders in stores, a point of pride for the Boscov's team.

"Companies that are much bigger than us are adopting this model," said Boscov's vice chairman Jim Boscov, a lifelong merchant and nephew of now-chairman Albert, who took a top post in the business four years ago.

Boscov's strategy relies on custom-designed software ensuring that as orders come in, the stores themselves do not run out of merchandise. The same in-house technology wizards are making aggressive marketing possible, too.

"Take a look at this month's Seventeen magazine. You'll see Boscov's in there," said Jon Holmquist, an e-commerce veteran, who was hired four years ago to revamp the chain's online systems and marketing.

Boscov's has a one-page ad in the teen magazine showing slickly styled girls in head-turning outfits and poses. By scanning a smartphone over a QR code, a viewer is shot to Boscov's website and given a special promotion.

This aggressive departure from standard practice aims to snare young customers, to build on Boscov's loyal core of older female shoppers.

Boscov's would not be able to experiment so easily if not for a blessing of foresight: It has its own information-technology staff, and that staff is good.

Decades ago, this group was its own company, designing Boscov's proprietary checkout and inventory-control systems and selling it to other retailers. Today, it is part of Boscov's internal operations.

The team built Boscov's online-ordering platform about a decade ago. In the last few years, the IT gurus have revamped the whole system, from how customers browse at www.boscovs.com to devising algorithms that guide online orders to particular stores to be filled.

"Our average order has 41/2 or five items in it," Holmquist said.

The software asks and answers these questions: When can one store complete the order without depleting inventory on the sales floor? What if there is only enough inventory to fill half the order? Which store fills out the rest?

"The system does that, and it does that in a way that does the least amount of damage to the existing store's business," Holmquist said.

For a company that rang up $1 billion in sales at 49 stores before its 2008 bankruptcy, the last several years have been impressive. Now with 43 stores, Boscov's enjoys revenue just above $1 billion - about 5 percent from online, Jim Boscov said.

The website has up to 70 percent more merchandise than it did four years ago. And workers in up to about 30 stores fill online orders around the peak holiday season.

Even the Neshaminy store's human-resources manager, Nicole Iaquinto, was printing packing slips Monday, and Jim Boscov hopped in to help Danielle Hulings wrestle bubble wrap onto an uncooperative lamp shade in the stockroom where orders are boxed.

About 55 percent of online purchases are made by people who live within 20 to 25 miles of a Boscov's store, which means the company may not introduce speedier delivery for a while.

"Customers receive their goods within two days," Jim Boscov said, which "takes some pressure off the need to provide expedited shipping."

Boscov's online system determines which of its stores has enough inventory to complete

an order.

Online order streams into the store digitally.

Order slip is sent to the departments where the items are located.

Associates pluck the items from the shelves. The goods are sent to the packing room.

Orders are then double-checked for accuracy. They are packed, weighed,

labeled, and sent

along to receiving.

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