Retailers To Invest £5 Billion In 'Omni-Channel' Over Five Years, Says Report

General merchandise retailers are predicted to invest £5 billion over the next five years to facilitate the transition to 'omni-channel'. 

A study found that retail executives regard the emergence of the multi-channel world as 'a revolution which is now accelerating'. It said traditional retailers in the non-food sector are spending about 3 per cent of annual turnover on meeting the challenges of that change. 

The report, Retail Supply Chain Management: The Omni-Channel Revolution by LCP Consulting, indicates that board level directors see the changes as urgent and requiring the re-engineering of traditional retail business operating models. But it said that directors are not clear on the returns they might make on investments and instead are investing mainly to compete with rivals and to cope with the tide of events.

The study suggests that there are few reliable ways to confidently predict and measure return on investment over time because of the 'relative immaturity' of the omni-channel model and the changing behaviour of customers. It said, for example, that retailers see the speed of fulfilment as being a key benchmark and something that is aggressively pursued among while customers place greater emphasis on convenience and consistency. 

Major benefits cited by retailers in moving to an omni-channel model were designing and setting up a better business model as much as improving sales and margins. 

LCP retail partner Phil Streatfield said: 'In our experience, regardless of cost, omni-channel is becoming the 'need to have' model for the retail industry. It has almost reached the tipping point of change or fail.' 

The report interviewed directors including Argos supply chain director Graham Barnes, John Lewis operations director Dino Rocos, Neil Ashworth, chief executive officer at Coolect+ and former Halfords chief executive David Wild.  

Wild said: 'I think that retailers are some way off completing the omni-channel revolution, but no sector is there yet. Change is continuing because technology is evolving so quickly and customers' habits are adjusting still.'