Williams Sonoma

Have you had a chance to read through the Williams Sonoma Annual Report (click here and download the 10-K statement).

Look at page 25, where you will observe selected financial data. Yesterday, a trade brand pointed out that their omnichannel strategy is clearly working. Let's evaluate their hypothesis. Look at the metrics for 2010 (the year before a research brand invented the term "omnichannel"), and compare the metrics to 2014. What do you see?

• Slower growth.
• Lowest gross margin percentage in the past five years.
• Slowest e-commerce growth of the past five years.
• Second slowest retail growth over the past five years.
• If selling square footage have increased (+2.6%), then the retail growth metric (+2.4%) implies a necessary drop in comp store sales.

Clearly, expenses are being managed well, because profit as a percentage of net sales is good. And the metrics we see in 2014 are outstanding ... most retailers would beg to have metrics that look like this.

But my goodness. This isn't the outcome of an omnichannel strategy that is clearly working. This is the outcome of a company that has done things well for three decades.

Williams Sonoma is worth emulating, no doubt about it. But not because of omnichannel excellence ... for if they were excellent at performing omnichannel strategies, their metrics suggest that omnichannel excellence is resulting in a slow degradation of business performance.