Executive Briefings

Retailers Set to Spend Big on Omni-Channel Model, But ROI Is Uncertain

Retailers in the non-food sector, are set to invest some £5bn ($7.7bn) in making the transition to omni-channel over the next five years. A study by LCP Consulting, Retail Supply Chain Management: The Omni-channel Revolution, suggests that the "omni" revolution is accelerating with retailers, now spending on average the equivalent of three percent of annual turnover on the change.

The study found that the board level view among retailers was that omni-channel is a revolutionary change which will profoundly alter the future of retail, and require significant re-engineering of the retail business operating model.

However, the return on investment in omni-channel remained unclear, with many retailers investing in omni-channel simply to compete.

The relative immaturity of the omni model meant that ROI was still difficult to measure given a lack of robust metrics, particularly in relation to customers, their behaviors and interfaces with the business and fulfillment needs.

The study also found that directors see fulfillment as a source of competitive advantage and not simply a cost of doing business. Speed of fulfillment remains a perceived differentiator and one that is still being pursued aggressively. However many questioned whether this is actually driven more by the retailers, with customers valuing convenience and consistency.

Read Full Article

The study found that the board level view among retailers was that omni-channel is a revolutionary change which will profoundly alter the future of retail, and require significant re-engineering of the retail business operating model.

However, the return on investment in omni-channel remained unclear, with many retailers investing in omni-channel simply to compete.

The relative immaturity of the omni model meant that ROI was still difficult to measure given a lack of robust metrics, particularly in relation to customers, their behaviors and interfaces with the business and fulfillment needs.

The study also found that directors see fulfillment as a source of competitive advantage and not simply a cost of doing business. Speed of fulfillment remains a perceived differentiator and one that is still being pursued aggressively. However many questioned whether this is actually driven more by the retailers, with customers valuing convenience and consistency.

Read Full Article