According to a survey of UK and US retailers’ boards, retailers are now spending the equivalent of 3% of their annual turnover on omnichannel with non-food retailers set to invest £5 billion in the next five years in developing omnichannel operations.
The report from LCP Consulting interviewed Board Directors from both UK and US based major retailers, including John Lewis and Argos, who all stated that the move to omnichannel is inevitable. The study claims that omnichannel will require significant changes to retail operating models, predicted to happen in the next two years.
The major benefits of omnichannel are cited as:
However, the report states that return on investment in omnichannel remains unclear, with many retailers investing in omnichannel ‘simply to compete.’
LCP Consulting Managing Director John Lockton said: “UK retail is responding actively with planned investments likely to reach £5 billion over the next 5 years – the question is whether this is sufficient, creates the right level of flexibility for the future, and is fast enough.”
The findings of the report are published in the same week that department stores Marks and Spencer and House of Fraser both look to their digital operations to boost performance.
Chief Executive of Marks and Spencer Marc Bolland said that “M&S.com is our new flagship store”, and is planning to spend millions to modernise its infrastructure so it can compete online with rivals such as Next and John Lewis. Meanwhile, a dramatic increase in online sales has helped House of Fraser achieve a 3.3% rise in overall turnover to £1.2 billion, with online accounting for 10.9% of total sales last year.
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