Omnichannel Wins: The New Rules of Retail in 2025

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Retail’s Post-Pandemic Transformation: The Rise of Omnichannel and the Road Ahead

Before the pandemic, the retail landscape was already experiencing rapid digital adoption. But when the crisis hit and social distancing became the norm, shoppers flocked to digital channels even more aggressively. Walmart’s CEO Doug McMillon highlighted this shift back in 2020, noting how pickup and delivery options saw significant growth as people stayed home.

Fast forward to today, Walmart's global e-commerce penetration stands at 18% of its total sales—an increase of over 1,100 basis points from early 2020. But not every retailer was prepared to pivot so quickly.

Some brands, particularly those rooted in traditional models, struggled to keep up with the sudden demand for omnichannel solutions. They faced hurdles integrating their systems across physical and digital platforms. Retailers had to rapidly adapt, learning to offer seamless shopping experiences across multiple touchpoints—whether in-store, online, or curbside.

The Lasting Impact of Pandemic-Era Shopping Habits

The pandemic not only forced consumers to embrace online shopping; it also set the stage for a permanent evolution in how people shop. Casual apparel, home decor, and convenience became top priorities. Remote work and increased screen time drove interest in comfortable, at-home living—and retailers who could meet those needs thrived.

The surge in mobile commerce, social commerce, and overall e-commerce during 2020 was unprecedented. Sales initially took a hit—declining by over 6% year-over-year in early 2020—but rebounded strongly the following year, buoyed by stimulus checks and increased consumer confidence.

Retailers responded by implementing new safety protocols while scaling up essential offerings. Innovations like contactless payments, curbside pickup, and more localized fulfillment strategies emerged rapidly. Many of these strategies are still key pillars in retail today.

The Power—and Limits—of Omnichannel

Retailers that could quickly integrate digital and physical channels stood to benefit most. Yet, not every adaptation is without challenges.

One major strategy that gained traction during the pandemic was using physical stores as fulfillment hubs. By tapping into local inventory to meet online demand, retailers aimed to shorten delivery times and cut costs. However, this approach has come under scrutiny.

While it sounds efficient, fulfilling online orders from stores often requires reallocating in-store labor, driving up operational costs. An employee who might earn $20 an hour is now picking and packing orders—tasks traditionally handled more cost-effectively at distribution centers. Moreover, it can pull focus away from customer service and in-store experience.

Yet, despite the added expenses, many retailers continue with this model because of the valuable consumer data collected through digital transactions. This data informs everything from personalized marketing to future inventory decisions.

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Brick-and-Mortar's Enduring Role

Interestingly, physical stores haven’t become obsolete—they’ve evolved. For many consumers, especially those living paycheck to paycheck, online shopping remains less accessible due to credit constraints or delayed gratification. Chains that transact heavily in cash, like dollar stores, are seeing steady growth because they cater to these customers.

Physical stores offer immediate fulfillment, no shipping fees, and an in-person experience that can’t be replicated online. The wealth gap also influences shopping behaviors, further underscoring the role physical retail still plays.

Department Stores and Specialty Retail: At a Crossroads

Five years post-pandemic, many department stores and specialty retailers are still searching for their footing. While department stores have the advantage of offering multiple brands under one roof, they face stiff competition from both online marketplaces and specialty stores that offer a more curated, engaging experience.

Department stores are grappling with how to balance brick-and-mortar presence with e-commerce and omnichannel services. Macy’s, for example, has been closing locations while rethinking what the modern department store should look like.

Challenges include maintaining accurate inventory control and ensuring a seamless in-store experience. Shoppers expect products to be in stock when they arrive—and if not, they might as well order online. This has exposed gaps in supply chain management, sales associate training, and customer experience strategy.

On the flip side, retailers who have prioritized strong omnichannel strategies—tight inventory systems, seamless cross-channel experiences, and thoughtful product curation—are better positioned to thrive.

The Next Chapter: High-Tech Meets High-Touch

Looking ahead, the retail industry is embracing a blend of high-tech innovation and high-touch experiences to build loyalty. Consumers now expect to engage with brands across social media, through influencer partnerships, and via channels that reflect their personal values—whether it’s sustainability, ethical sourcing, or community impact.

Retailers need to go beyond basic online shopping functionality. The focus is shifting to crafting memorable customer experiences, both online and in-store. Elements like personalized recommendations, flexible fulfillment options, and engaging in-store merchandising will set successful retailers apart.

Ultimately, the pandemic accelerated retail trends that were already bubbling beneath the surface. But it’s the brands that continue to evolve, listen to their customers, and fine-tune their omnichannel approach that will define the future of retail.