This year will separate the retailers who innovate from those who stand still. Which side will you be on?

Recent developments underscore the urgency to adapt. In Australia, Mosaic Brands is shutting all 136 Rivers stores, costing 650 jobs after failing to find a buyer. Meanwhile, in the US, a record 15,000 chain stores are set to close this year – double the number of last year.

These examples make one thing clear: Retailers must act now. Your success this year could hinge on one of four key moves. Those who execute them decisively will pull ahead; those who don’t risk being left behind.

1. Pureplay online retailers are opening bricks-and-mortar stores

For years, online retailers were seen as the future, but now the script is flipping. Digital-first brands are increasingly investing in physical stores, not as a step backward, but as a way to supercharge their growth.

The reason? Physical retail builds trust, deepens brand engagement, and even fuels online sales. Brands that once thrived purely online are realising that stores are not just about transactions but about creating immersive experiences that drive long-term loyalty and higher spending. Leading brands are taking note.

The Iconic recently launched a ‘Click, Try & Collect’ store, giving customers a hybrid shopping experience where they can try on items before committing to a purchase. Similarly, beauty giant Adore Beauty, after 25 years online, has opened its first physical location in Melbourne to provide hands-on consultations and personalised recommendations. 

Amazon now operates bookstores and cashier-less Amazon Go convenience stores, while Netflix has announced plans to launch immersive retail experiences. Major brands like Amazon and Netflix have set the trend, but even newer names like Skims and Revolve are moving into physical retail, leveraging stores to enhance brand engagement and boost online sales.

Leap Inc has also helped e-commerce brands make the shift, offering an “out of the box” solution to open physical stores with lower risk. As Amish Tolia, Leap’s co-founder and CEO, explains: “Brands continue to see the value in bricks-and-mortar, as they strive to meet their customers with immersive shopping experiences in the markets where they already have a strong following and can build loyalty with newly acquired customers.”

With research showing that 72 per cent of US retail sales will still take place in physical stores by 2028, it’s clear that brick-and-mortar retail is not only surviving but evolving. More brands recognise that the best retail strategy is not digital or physical but “physical”. 

2. Fulfillment: The battle for speed and convenience

Fulfilment is becoming a battleground for customer satisfaction both online and offline. Consumer expectations have been shaped by Amazon Prime’s same-day and next-day delivery and Uber Eats’ instant convenience, setting a high bar for retailers to meet. Speed and efficiency are no longer just competitive advantages; they’re customer demands.

Petbarn’s partnership with Uber to offer two-hour delivery is a great example of how retailers are adapting to this shift. As its customer service manager, Stacey O’Neil, explains: “We use Uber a lot for two-hour delivery. It’s great for the customer experience, and it helps us keep them coming back.” And lock in the sale.

The company has also expanded to Uber Eats, allowing customers to order pet supplies alongside their meals for even faster access. “You could be buying your McDonald’s for lunch and getting your dog some treats from Petbarn at the same time,” says O’Neil. This approach demonstrates how leveraging new platforms can help retailers meet customers where they are while enhancing convenience and loyalty.

3. Faster cost savings: Why retailers are embracing offshoring

With margins tightening, combined with a shortage of skilled staff, offshoring is emerging as a fast and cost-effective solution for retailers that can’t afford to wait years for a return on investment. No longer limited to customer-facing or frontline roles, offshoring now extends to IT, finance, merchandise planning, and supply chain management, delivering immediate cost savings.

Unlike technology and automation investments, which require significant setup time and can take two to three years plus to deliver returns, offshoring provides near-immediate financial benefits, typically with zero upfront costs and savings on the books within three months. For example, a finance role that costs $92,000 in Australia can be offshored at a fully loaded cost of just $28,000 in the Philippines, allowing retailers to hire three offshore roles for the price of one and quickly realise millions in savings.

Retailers embracing offshoring as part of their cost strategy are cutting costs faster, reducing overheads, and achieving profitability far sooner than through automation or technology investments alone. And particularly with the ability to partner with offshoring providers who specialise in the Australian retail sector, the ability to offshore fast and effectively without impacting culture is real.

4. AI is everywhere: But where should retailers actually focus for value in 2025?

Artificial intelligence is no longer optional; it’s essential for growth. However, retailers must cut through the hype and focus on the applications that deliver real business value or risk getting lost in the daily, incessant AI buzzword bingo.

Two key areas where AI is delivering measurable impact for retailers this year are automated inventory management and shopping cart conversion. AI-powered inventory solutions, such as Walmart’s proprietary ‘Element’ machine learning platform, have reduced out-of-stock incidents by up to 50 per cent and increased inventory turnover by 30 per cent. Element enables Walmart to automate decision-making at scale, optimising inventory placement, demand forecasting, and logistics across its entire supply chain. 

Meanwhile, AI-driven personalised recommendations have been shown to increase e-commerce conversion rates by up to 30 per cent. New platforms like Shopify Magic and Sidekick, their AI-driven shopping assistants, and Dynamic Yield’s AI-powered personalisation suite are transforming cart conversion, making small but impactful gains in profitability. 

Retailers investing in these targeted AI applications will see a direct impact on sales and efficiency this year.

Future-proofing your retail strategy

The retail landscape this year will challenge many retailers, with increased pressure on margins creating an environment where there will be constant trade-off decisions. Between short-term pressures (margins, supply chain, etc) and building their competitive advantage (convenience, experience, skilled talent, etc), businesses will need to proactively challenge their operations to “survive through ‘25”.

The real question is: how ready is your retail strategy for what’s coming?

• Get a free quote with Satellite Office today to see how offshoring can help your retail business reduce costs, improve efficiency, and build a high-performing team – or visit satelliteoffice.com.au to learn more.