Almost half of US retailers (43 per cent) have a fully integrated Omni-channel approach against just over a quarter (27 per cent) of UK retailers. Although the US is further advanced, both UK and US retailers agree that the greatest overall benefits of going Omni are an enhanced business operating model and increased sales.
The new LCP Insight paper, Omni-channel: a UK v US perspective also revealed that fulfilment and integrated IT systems are the most important business and operational capabilities in need of development to meet customer and market expectations. In the US these changes are already underway - or will happen in the next year or two - while the majority of those in the UK think change will be needed in 3-5 years or more.
US retailers are identifying a clearer ROI
The paper says that the motivation on each side of the Atlantic provides another clue to different stages of Omni-channel maturity:
- In the US, 27 per cent of retailers cited pre-defined ROI targets as their motivation for investing in Omni-channel, against just 16 per cent in the UK
- More than one third in the UK saw the simple "need to compete" as the key motivation.
Stuart Higgins, Retail Partner, LCP Consulting, said: "Our research has revealed that although both US and UK retailers are at different stages in developing their Omni-channel capability, they are agreed that the greatest overall benefits are an enhanced business model and increased sales. This clearly shows a major step forward from the perception that it is simply the supply-chain's response to demand from new sales channels – to a driver for a wider change in corporate culture and adding direct value to the business.
With US retailers further advanced and taking a more holistic approach to going Omni, they are able to identify operating costs savings as well as stock availability improvements – so they can also identify a clearer return on investment."
US retailers and the role of hybrid stores
There was also greater recognition in the US that to achieve success the role of the retail store must be redefined and clearly articulated in the future. All respondents recognised that hybrid stores of some type will be required, but US retailers more clearly recognised this will involve new store assortments and reduced stockholdings along with more knowledgeable and informed store staff to actively advise customers on their purchases. The latter, starts to clearly position people at the heart of the change to an integrated retail approach.
Incentivising people to drive Omni models
UK and US retailers agreed that developing new measures and incentives to promote integrated thinking was the most important element in ensuring employee-support for an Omni culture. However, in the US, this people-centric approach is more likely to be a theme that is carried through the integrated approach. For example, empowering employees to deliver excellent customer service, or changing the role of store staff from simply serving customers to informing their choices, were both high on the US list.
In the UK, respondents were more process-focused, stating that providing store-based staff with a single view of the retail world, or ensuring more visibility of the true cost of service, were key areas for employee development.
Stuart Higgins, concluded: "This difference highlights the importance that US retailers place on store colleagues as a critical part of delivering a seamless retailing experience and presents a very strong call to UK employers in the early stages of transition to consider re-evaluation of their employment culture. This is further evidenced by those UK retailers which are now some way down a fully integrated track – such as Tesco and John Lewis – who have embraced the massive changes required in store staff knowledge, culture, behaviours and training."
The paper also says that the Omni-channel revolution is advancing at such a pace that the term itself is polarising the supply chain debate. But, whether the approach is expressed as 'Seamless Retail', 'Integrated Retail' or similar, the principles remain the same and are dramatically altering the retail industry.