Retail has always been a bellwether for broader economic and societal shifts, but the past few years have seen the sector undergo a transformation unlike any before. What began as digital experimentation—think early e-commerce sites and isolated mobile apps—has evolved into a new era where digital is not just a channel, but the backbone of the entire retail business. Today, leading retailers are not just adapting to digital; they are running fully integrated digital businesses, reimagining every aspect of the value chain from customer experience to supply chain, and even the very business models they operate.
The pandemic accelerated the shift to digital, but it also exposed the limitations of siloed digital initiatives. Retailers quickly realized that customers don’t think in terms of channels—they expect seamless, consistent experiences whether they’re shopping online, in-store, via mobile, or even in emerging spaces like the metaverse. The result is a new omnichannel reality, where the boundaries between physical and digital are blurred, and the customer journey is fluid.
Take Pandora, the global jewelry brand, as a case in point. In 2019, Pandora’s e-commerce was still seen as a side project, with fragmented teams and limited integration with the core business. But by investing in foundational digital capabilities—rebuilding websites, consolidating platforms, and integrating customer service—they were able to pivot rapidly when the pandemic hit. The result? A business that could not only survive store closures but thrive by fusing online and offline experiences. Today, over 80% of Pandora’s customer journeys start online, but 80% are completed in-store, demonstrating the power of a truly omnichannel approach.
Omnichannel is only as strong as the supply chain that supports it. The explosion of digital demand has forced retailers to rethink everything from inventory management to fulfillment. Real-time data and AI are now essential tools for optimizing supply chains, enabling retailers to anticipate demand, manage inventory across channels, and deliver on customer expectations for speed and convenience.
IKEA’s journey is a standout example. As e-commerce demand surged fivefold, IKEA leveraged real-time customer data to reconfigure its supply chain, transforming retail stores into fulfillment centers and avoiding the need to build 15 new distribution centers. This not only delivered significant cost savings but also reduced environmental impact—a win for both the bottom line and sustainability goals.
Sustainability is no longer a “nice to have”—it’s a business imperative. Retailers are under increasing pressure from consumers, regulators, and investors to address environmental, social, and governance (ESG) issues. The most forward-thinking are going beyond incremental improvements to embrace circular business models, where products are designed, used, and reused in a closed loop.
IKEA’s ambition to become a fully circular business by 2030 is illustrative. By giving 47 million products a second life, reselling 38 million items, and repacking millions more, IKEA is embedding circularity into its core business. This approach not only reduces waste but also creates new revenue streams and deepens customer engagement. The integration of ESG and digital is enabling retailers to track, measure, and optimize their circular initiatives in real time, ensuring that sustainability delivers tangible business value.
The convergence of real-time data, AI, and cloud technologies is enabling retailers to reimagine both the customer and employee experience. Customer Data Platforms (CDPs) and advanced analytics are breaking down silos, providing a unified view of the customer, and enabling hyper-personalized experiences across all touchpoints. AI-driven insights are powering everything from dynamic pricing and inventory optimization to proactive customer service and predictive maintenance.
Retailers like Pandora have embraced a test-and-learn culture, using data to rapidly experiment with new features—such as virtual queuing, click-and-collect, and endless aisle—and scaling what works. This agile, data-driven approach is not just about technology; it’s about building a culture of continuous improvement and customer obsession.
To succeed in the digital-first era, retailers must make deliberate choices about where to defend, where to differentiate, and where to disrupt:
This framework is not theoretical; it’s being put into practice by leading retailers worldwide. For example, Pandora’s journey from fragmented digital initiatives to a unified, agile digital business has enabled it to defend its core, differentiate through customer experience, and experiment with disruptive new models. IKEA’s circular commerce strategy is both a differentiator and a disruptor, setting a new standard for the industry.
The next chapter of retail will be defined by those who can integrate digital, data, and sustainability into a seamless, customer-centric business. The winners will be those who not only defend and differentiate but also disrupt—creating new sources of value for customers, employees, and society at large. As the lines between physical and digital, commerce and community, profit and purpose continue to blur, retail’s transformation journey is far from over. But for those willing to lead, the opportunities are limitless.
Publicis Sapient stands ready to partner with retailers on this journey, bringing deep sector expertise, proven frameworks, and a relentless focus on delivering real business outcomes in the digital-first era.