Southern Department Store Belk Is Building an Ad Business

Department store chain Belk is standing up an advertising business.

The company is starting an ad arm called Belk Media Network that will sell ads to brands trying to reach the retailer’s shoppers.

Belk is a regional department store chain with nearly 300 stores in 16 Southern states including Texas, Florida and Maryland. Belk competes with retailers including Macy’s and Kohl’s. 

Belk has hired Neal Sheridan, a former Macy’s ad exec, to lead Belk Media Network. Part of Sheridan’s role requires setting a vision for how the ad business fits into Belk’s  IT, ecommerce, merchant and marketing teams, according to a job posting.

“You will have the opportunity to launch and establish the goals of the partnerships while creating the strategic vision of the RMN,” reads the job posting.

Belk is currently hiring for a sales manager responsible for creating sales materials and relationships with advertisers and third-party companies. 

A spokesperson for Belk confirmed that the retailer plans to formally launch the ad business this fall but declined to share additional details about the program.

Retail media is getting too niche

Belk is eyeing a piece of the $140 billion that advertisers will spend on retail media this year, according to Emarketer. However, Amazon dominates and is expected to grab 74% of those budgets.

A growing number of retailers are fighting over the remaining portion of retail ad budgets. Retail tech firm Mimbi estimates there are more than 200 retail media networks.

Four retail media experts that ADWEEK spoke to said that the increased competition will make it hard for Belk to compete for big budgets. Unlike Belk’s competitors Macy’s and Kohl’s, Belk doesn’t have stores across the entire U.S. — making it harder for advertisers to justify ad budgets that don’t reach a wide swath of American shoppers. Belk is also late to develop an ad business, the experts said.

“There’s been a lot of retail media networks created from every retailer under the sun, and we see a huge desire to put more money to work in media that’s enabled by retail data,” said John Shea, founder and CEO of ecommerce agency Momentum Commerce. “It gets challenging — Belk is a regional department store player.”

Big and midsize advertisers largely assign their retail media spend to between five and eight platforms, with Amazon getting the biggest share of budgets, said Russ Dieringer, founder and CEO of ecommerce analyst and research firm Stratably.

“If anything, I’d guess brands selling into Belk might shift some of their existing activation money to test it out,” Dieringer said. “Since it requires people and money to expand to more networks, simply launching a new network does not mean ad dollars start to flow to it.”

Ross Walker, retail media team lead at ad agency Acadia, agreed that Belk doesn’t hold “a unique position or a huge audience” for advertisers. He said the retailer’s move into advertising could be part of a strategy to revive Belk’s revenue under private equity owner Sycamore. Sycamore acquired Belk in 2015 and recently reduced its outstanding debt by more than $950 million.

“This is part of the play that the PE firm is running out,” Walker said. 

Still, he said Belk may be a good ad platform for brands that heavily sell products in Southern U.S. states.

For example, a brand may sell more white jeans in Florida than in the Pacific Northwest, noted Elizabeth Marsten, vp of commerce media at Tinuiti. “It does make sense if you’re a brand that sells regionally,” she added.