portunities to connect merchandising, marketing and operations often go unrealised. The challenge, increasingly, is not strategy or technology. It’s organisational structure. Most retail organisations are still designed for a channel-based world, while customers now shop seamlessly across channels. This mismatch is becoming one of the biggest barriers to growth in modern retail. No longer matching how customers shop For decades, retail organisations were built around distinct channels and functions, including stores, e-commerce, merchandising, marketing, supply chain and operations. Each area developed its own processes, metrics and leadership structures. This model worked when channels operated largely independently and customer journeys followed predictable paths. Today’s customer journey looks very different. A shopper may discover a product through social media, research options using AI, compare availability on a retailer’s website, check inventory at a local store and ultimately purchase through curbside pickup or delivery. Returns may happen through yet another channel. These journeys are fluid, dynamic and increasingly influenced by digital touchpoints. However, many organisations remain structured around channel ownership. Store teams focus on store performance. E-commerce teams focus on digital revenue. Marketing teams focus on traffic and campaigns. Merchandising teams focus on assortment and margin. When these functions operate independently, friction emerges. A digital promotion may drive demand that stores are not prepared to fill. A merchandising decision may affect digital visibility without coordination. A retail-media campaign may prioritise advertising revenue without considering inventory availability. Customers don’t see these internal boundaries. They simply expect seamless execution. As a result, organisations built for channel-based retail increasingly struggle to support customer-centric experiences. Why this challenge is accelerating This organisational mismatch is becoming more pronounced as retail continues to evolve. Artificial intelligence is influencing product discovery and recommendations. Retail-media networks are reshaping promotional strategies and profitability models. Omnichannel fulfilment is blending store and digital inventory. Data-driven merchandising is becoming more central to growth. Each of these trends requires tighter coordination across teams. Retailers like Walmart, Target and Best Buy have made significant progress by integrating store and digital operations – enabling capabilities such as buy online, pick up in store, ship-from-store and real-time inventory visibility. These capabilities depend on coordination across merchandising, supply chain and store operations. Similarly, retailers like Sephora and Nike have aligned digital merchandising, content and marketing to deliver more cohesive discovery and conversion experiences across channels. These examples highlight a broader reality: As retail becomes more integrated, organisations must become more integrated as well. What digital-first organisations are doing differently Leading retailers and brands are beginning to rethink how their organisations are structured. Rather than organising primarily around channels, digital-first organisations increasingly align around customer journeys and shared outcomes. This shift doesn’t eliminate channel expertise – but it does change how teams work together. Instead of optimising individual channels, organisations align around key moments in the customer journey, such as: Discovery and demand generation Digital merchandising and content Conversion and experience Fulfillment and service Customer lifecycle and loyalty These areas require collaboration across merchandising, marketing, analytics, operations and technology teams. To move toward this model, leading organisations are taking practical steps to: Establish cross-functional teams aligned to customer journey stages Create shared KPIs across store and digital channels Integrate inventory visibility across all customer touchpoints Align merchandising, marketing, and supply-chain planning cycles Use unified analytics to support faster, coordinated decision-making By aligning around outcomes rather than ownership, organisations can move faster and execute more effectively. The build-versus-partner decision As retailers evolve toward digital-first operating models, leaders must decide which capabilities to build internally and which to source externally. Most are adopting a hybrid approach. Capabilities often built internally include merchandising strategy, customer insights and analytics, data governance and digital experience leadership. These areas are typically core to differentiation and long-term competitive advantage. Other capabilities are frequently supported through partnerships, including AI and personalisation platforms, retail-media optimisation, advanced analytics and experimentation tools, and customer data platforms. To guide these decisions, retail leaders must first identify which capabilities directly shape customer experience, competitive differentiation and long-term strategic control. Areas such as merchandising strategy, proprietary customer insights, pricing, and inventory visibility are increasingly viewed as core capabilities because they influence how retailers compete and how customers experience the brand across channels. At the same time, many retailers are partnering with specialised technology providers, analytics firms, and retail-media platforms to accelerate capabilities that would be difficult or time-consuming to build internally. AI-driven personalisation, advanced experimentation tools, retail-media optimisation, and customer data platforms are often implemented through external partnerships because these technologies evolve rapidly and require highly specialised expertise. Retailers are also increasingly outsourcing execution-heavy or operationally intensive functions that do not directly create strategic differentiation. Functions such as content production, campaign execution, systems integration, and portions of digital media management are frequently supported by agencies, technology integrators, or managed service providers. This allows internal teams to focus more heavily on strategy, customer experience, and cross-functional decision-making. However, the most effective organisations recognise that build-versus-partner decisions are not permanent. As technologies mature and internal capabilities evolve, retailers must continuously reassess which functions should remain external and which capabilities should become strategic priorities internally. Retailers like Walmart and Target, for example, continue to build core data, merchandising, and omnichannel capabilities internally while selectively partnering for specialised AI, analytics, and retail-media solutions. Organisations that manage this balance effectively can often scale digital capabilities faster while maintaining strategic control over the customer experience. Organisational change is now a leadership issue As retailers adapt to digital-first operating models, new roles and capabilities are emerging across the organisation. Digital merchandising leaders, retail-media specialists, analytics teams and AI governance roles are becoming more common – reflecting the increasing importance of data-driven, cross-functional execution. However, adding new roles alone is not enough. Incentives and performance metrics must also evolve. Many organisations still measure performance within channel boundaries. Store teams may be evaluated based on store sales alone. E-commerce teams may be measured on digital revenue. Marketing teams may focus on traffic rather than conversion or profitability. These incentives can create internal competition rather than collaboration. Retailers like Walmart and Best Buy have taken steps to align store teams with digital fulfilment performance, reinforcing shared accountability across channels. To address the issue, leaders should: Align incentives across store and digital teams Measure performance based on customer outcomes, not channel ownership Establish shared metrics such as customer lifetime value and omnichannel growth Create governance models that support cross-functional decision-making Because in a digital-first world, growth happens across journeys – not channels. The next phase of retail transformation Retail transformation is often framed as a technology challenge, but increasingly, the limiting factor is organisational design. Retailers today have access to powerful digital platforms, AI-driven tools, and advanced analytics capabilities. The question is whether their organisations are structured to capitalise on them. The retailers that succeed in the coming years will not simply have better technology. They will have organisations built to act quickly, collaborate effectively and execute across channels. In a digital-first world, strategy alone isn’t enough. Execution depends on structure. And structure ultimately determines who wins. Scott Benedict is a seasoned retail executive and omnichannel strategist whose career has spanned the full spectrum of merchandising, e-commerce, international retail expansion and digital transformation.