Omni-Channel Profitability: Stop Treating Stores and Online as Rivals
Despite years of discussing the "seamless" customer experience, the dirty secret in some retail organizations is that physical stores and e-commerce channels still operate as financial rivals.
When separate P&Ls exist, or when store managers are penalized for processing online returns because it hits their sales figures or expense ratios, you create friction that ultimately damages profitability.
I still see store staff reluctant to promote an online-only exclusive because "it doesn't help my target," or e-commerce teams pushing aggressive promotions that undermine store pricing credibility.
A truly profitable omni-channel strategy requires unified commercial incentives. Your teams, from the head office to the shop floor, need to be trained to understand how the channels support each other financially.
If a retailer does 20% of their sales online and some of that of that is fulfilled by stores, 12% of store stock walks out the door to fulfil online staff bonuses in some companies. Stores also get a signifcant share of returns costs for online orders.
The customer sees one brand and one channel - you. Until your internal processes and training reflect that reality, you will continue to leak margin through internal conflict. How many retailers can say that their Store Operations staff can use selected online trading insights to improve store sales performance?
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Posted by Martin Dugan
20th May 2026
