Growing up in suburban Chicago, Kathryn Bufano not only loved shopping, but she was fascinated by the stores themselves and how they worked.
“I was very intrigued and energized about how everything came together,” said Bufano, who in late August became chief executive of Bon-Ton Stores Inc., the parent company of Elder-Beerman department store.
The allure of knowing the ins and outs of the department stores she shopped in as a girl never went away. And when she landed a job with Lord & Taylor in Chicago after college and then was sent to New York for training with the company, she was on a path that led her to important positions with a variety of retailers around the country.
Now, as she takes the reins of Bon-Ton, Bufano is more than well-versed in one of the key truths of the department store business: It’s never the same for very long.
But she said that’s one of the things she likes about it.
“The dynamics of change, the dynamics of understanding the customer, the dynamics of understanding the communities that the department stores serve, is very exciting to me,” said Bufano, 61.
She said today’s department store is “an omnichannel vehicle,” with an online presence she intends to grow, that can adapt not only to what the customer wants, but to the way the customer wants to see and buy it.
One thing she’s not interested in changing, however, is Bon-Ton’s longtime strategy of operating stores under multiple brand banners: Elder-Beerman, Boston Store, Younkers, Bon-Ton, Bergner’s, Carson’s, and Herberger’s. Like her predecessor, Brendan Hoffman, Bufano believes there’s a competitive advantage in having a localized brand name instead of a national one like Macy’s or J.C. Penney.
“I think we have an opportunity to differentiate ourselves and say, ‘Think local, be local,’” Bufano said. “We are local. We are your hometown store — we are Elder-Beerman, we are Herberger’s, we are Younkers — and that plays into our overall brand position and one of our key merchandising initiatives of localization.”
Bufano said the strategy of not presenting the company as a national chain also squares with the approach of Charlotte, N.C.-based Belk Inc., the retailer for which she was a top executive before coming to Bon-Ton last month. Belk is the nation’s largest family-owned and operated department store company, with 299 Belk stores in 16 Southern states.
“We worked very hard to differentiate ourselves from the national players,” she said.
Bon-Ton operates 273 department stores in 26 states, including several in the Dayton area.
Bon-Ton has dual headquarters in Milwaukee and York, Pa.
In a recent interview, Bufano touched on a number of topics:
Her management style: Management in the retail industry "has evolved over the course of my career in a very, very positive way," she said. It is much more collaborative than when she started in the business and individual leaders did more dictating, she said.
“A modern retail organization has to really understand omnichannel. They have to understand how IT is a partner in terms of advancing your business,” Bufano said. “You have to understand the demographics and seasonability with much more fact-based decision making. And marketing and merchandising and planning and all the different disciplines have to work together around the table to deliver the brand message and the brand positioning of an organization.”
The importance of online sales: Online sales at Bon-Ton are increasing and should account for about 6 percent of sales this year.
“If you’re not invested in terms of a seamless experience in omnichannel and use the Internet and all it’s important influences — let alone driving business — then you’re not going to be successful in this day and age because all the customers expect that,” Bufano said.
The "localization" strategy for stores based on geography: Bufano said that means a store in its newest location of Dayton, Ohio, for example, would carry a lot more denim than a store in the Chicago area, where go-to-work career apparel is more important.
“We are starting to go through our planning cycle for next spring, and I know our target is at least 25% local assortment,” Bufano said. “And we’re fortunate we have folks in the field who are very much a part of the planning process.”
Having to compete against Nordstrom and Von Maur retail stores that are coming to Dayton for the first time: Bufano said Nordstrom and Von Maur were in some of Belk's markets, so she is no stranger to them.
“We are remodeling our store at Mayfair where Nordstrom is coming in,” she said. “We are going to do what we do best in terms of our assortments and positioning ourself for the hometown customer. Nordstrom, I welcome them into the community because they are only going to add traffic to the location, and we’re going to be at the top of our game in terms of a brand new store.”
She added: “Nordstrom is positioned higher (on price) than we are. We are a good, better, best department store….We can serve a broad range of customers.”
Being the newest of 52 female CEOs in Fortune 1000 list of America's biggest corporations: Bufano said she didn't start out with the goal of becoming a chief executive, but always worked toward the position just ahead of her.
“There are wonderful business leaders that may not have the CEO title per se, but are adding a huge amount of value — whether it’s a small business or a big business — to the companies that they’re with,” she said.
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