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I’ve often commented about the importance of omni-channel for all sectors, but particularly retail and hospitality. However, no matter how often I find some research to support its importance, there are always detractors who argue that the cost of investing in CX improvement and omni-channel in retail outweighs the benefit.
Fortunately, I recently found some new research from the ratings agency Fitch that is very persuasive. This research is focused on the US market, but I believe we can broadly assume that the results will be similar elsewhere. The findings are that in retail and restaurants, companies can expect around 3-4% growth in 2017; but the in-store bricks and mortar growth will be 1% or less.
David Silverman, senior director of US corporates at Fitch said: “Spending focus on services and experiences appears here to stay, so the dividing line between best-in-class retailers and market share donors is increasingly going to be determined by which retailers can cater to the evolving landscape. Those that find success have invested in the omni-channel model and have differentiated their products and customer service to draw customers in.”
Let’s just break that down to consider exactly what Fitch is saying. They believe that market confidence is generally good and the sector will grow by a few percentage points in 2017, but almost all the growth will go to companies that invest in omni-channel in retail. Those relying solely on in-store sales will see much slower growth – if any at all.
The Fitch research contrasts McDonald’s with Starbucks. Two brands that you might immediately think of as food and beverage outlets that require customers to be in-store – you can’t get a burger on a website! However, Starbucks does offer a very useful app that allows customers to place an order, and pay for it, while on their way to the restaurant, allowing them to completely avoid any wait for service when they arrive. It’s this kind of joined-up thinking that combines an online channel with an improvement in the in-store experience that Fitch believes will be essential in 2017.
It looks like 2017 might see a tipping point for omni-channel expectations from customers. We are finally reaching a point where the ability of a brand to blend service across channels becomes a differentiator. Companies that cannot offer an improved service by doing this will find they are missing out as customers defect to more omni-channel-aware brands.
What do you think of the Fitch findings? Leave a comment below, or get in touch on LinkedIn, and let me know.