That catalog history gives it a leg up on its rivals because as they also implement an omnichannel strategy, they need to engage in a costly build out of their infrastructure. J.C. Penney already has much of it in place; this year's capital budget of $250 million to $300 million may seem low in comparison with the competition, but all it really needs to do is digitize its systems. The retailer already has distribution centers in place, and in fact is converting many of its stores into fulfillment centers. Using what it calls enterprise inventory, J.C. Penney will fulfill online orders from its store-based inventory. In the first quarter it expanded the number of locations used to fulfill online orders by over 160 stores. As Ellison explained, "we are not building [distributions centers], we are just trying to create platforms to digitally connect those DCs to the customers for what we call seamless transactions for them to purchase in-store, online, etc." 5.