Three surveys have shown recently how the UK is lagging behind the US in terms of omnichannel development and below customers’ expectations. Emma Herrod discovers that the good news is that most UK brands expect to have an omnichannel strategy in place within 18 months.
ALMOST HALF of US retailers (43%) have a fully integrated omnichannel approach against just over a quarter (27%) of UK retailers, according to a study by business operations consultancy LCP. 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 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. The paper says that the motivation on each side of the Atlantic provides another clue to the different stages of omnichannel maturity:
- In the US, 27% of retailers cited pre-deﬁned ROI targets as their motivation for investing in omnichannel, against just 16% in the UK;
- More than one third in the UK saw the simple “need to compete” as the key motivation.
The retailers’ agreement that the greatest overall beneﬁts are an enhanced business model and increased sales 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,” says Stuart Higgins, Retail Partner, LCP Consulting.
HYBRID STORES & INCENTIVISING PEOPLE
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.
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-focussed, 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.
While US retailers may be ahead of the UK in terms of omnichannel, a study by Accenture and hybris shows that customers are ahead of retailers in their omnichannel ambitions with 71% of consumers expecting to view in-store stock online and 50% expecting to buy online and pick up in store. Yet, only a third of the retail decision makers surveyed – in the US, UK, France and Germany – said that their companies are able to provide customers with in-store pickup of online purchases, online visibility of cross-channel inventory and store-based fulfilment of online orders. All of these capabilities are considered vital for seamless retailing.
“Thirty nine per cent of customers surveyed say they are unlikely or very unlikely to visit a retailer’s store if its website does not provide physical store inventory information,” said Chris Donnelly, Global Managing Director of Accenture’s Retail Practice.
“Additionally, the research also shows that retailers who struggle to implement robust seamless capabilities online also experience challenges meeting customer expectations in offline channels. So this is a particularly big challenge that requires immediate attention.”
While retailers may be struggling with omnichannel capabilities at the moment the future is looking brighter for customers’ expectations with most UK brands expecting to have an omnichannel strategy in place within 18 months.
It appears though that pureplay and multichannel retailers are working to different deﬁnitions of what constitutes an omnichannel strategy. For while all of those who took part in a survey by SLI Systems thought mobile was key to the implementation of an omnichannel strategy, pureplays were less likely to consider ofﬂine as an area to be explored: only 15% of respondents said kiosks played a key part, while 61% said bricks-and-mortar did. By contrast, 97% said optimising for tablet was important, and 95% rated the importance of the online environment, for desktop and laptop.
“Both communities are trying to use omnichannel to play to their strengths. Pureplay ecommerce businesses are seeking to stick with the model that brought them success in the ﬁrst place – keeping overhead low and focusing on the techniques that drive online business growth. On the other hand, bricks-and-mortar retailers are trying to exploit the advantages that come with having physical locations in the same neighbourhoods where their customers live,” says Tim Callan, Chief Marketing Ofﬁcer at SLI Systems .
David Kohn, Multichannel Director at retailer Snow + Rock , said: “As a business that has bricks-and-mortar stores as well as online, we see delivering a consistent customer experience through all channels as both our key challenge and our key opportunity. The survey suggests we are not alone in this.”