Posted by: LCP Consulting Thursday 18 February 2016 10.16

In last month's blog we spoke about the number of retailers saying that the transition to an Omni-channel business model is longer than they expected. This week, we are covering the benefits of completing the journey.

Our latest report, The Omni-Channel Journey found a number of advantages for the retailers who have made the transition, the key being: financial, operational and in customer service. To help define what we mean by each type of retailer, we identified four Retail Archetypes in our 2014 report: The Omni-channel Dilemma. These continue to help define the retail industry landscape today and are Omni-channel Pioneers, Omni-channel Followers, Optimised MultiChannel/PurePlay retailers, and Challenged Multi-Channel retailers (for details on these archetypes, see last months’ blog)

Financial performance: increased sales

For the 3rd year in a row retailers reported sales as being a primary advantage of moving to an Omni-channel approach. Twice as many Omni-channel Pioneers saw sales growth of greater than 10 per cent vs Challenged Multi-Channel retailers.

When asked to describe where their business will derive benefits from an Omni-channel approach, retailers clearly identified increased sales (65 per cent) and improvement in working capital and net margin (41 per cent) as benefit areas. Some retailers are clearly showing they can achieve an economically viable Omni-channel service proposition. This suggests some are finding their way to a sustainable Omni-channel future.

Operational performance: the re-emergence of the operating model

This year the re-emergence of the operating model as a main advantage of Omni-Channel retailing highlights the leverage that retail businesses are achieving through re-designing their overall operations. Omni-Channel Followers are also recognising the importance of front-end offer integration with their back-end operational capability. This needs to be underpinned with better business insights and analytics in addition to customer insights.

Customer service

Finally, what is becoming very clear is that the agility to respond to feedback is becoming increasingly critical, and something that is more achievable with an Omni-channel approach. Importantly, this also presents an opportunity to build customer loyalty through dealing effectively with mistakes.  Heightened levels of customer service can ultimately reduce complaints and increase customer trust in the retailer’s brands.

Dino Rocos, Operations Director at John Lewis summarises this point in this year’s report, by saying: “I think the real difference in the last year is that the plans that we had to deliver an Omni-channel retail proposition have now translated into a customer-driven Omni-channel customer proposition. Customers like it, are doing more of it, and they are taking more control in setting the direction of travel. That’s the biggest change in the past year or 18 months.”

For more detail on this year’s findings and commentary from leading retailers and our retail experts, please download our latest report here.