Customer lifestyles are drastically evolving. The pandemic continues to influence customer purchasing priorities and penetration in the omnichannel environment, which is affecting assortment mix and demand at each location.This is creating new challenges for retail operations, including a particular demand for agile merchandise planning and supply-chain processes. These activities require frequent decisions on product assortment, store, and floor-space allocations. Such decisions are not new; however, they are now occurring outside of typical planning cycles and with less data to guide them.Here are some of the big trends and the merchandising moves they’re forcing retailers to make.The WFH phenomenonRemote working is a new way of life and has disrupted retail, creating spikes in demand for product categories and high demand in new locations, with no historical data or trends to help prepare for this change. The trend of working from home is expected to continue, with many businesses realising they can find a new balance of working onsite and offsite. Meanwhile, the spikes in sales and locations have eased and retailers have established new buying patterns – but the volatile environment still exists, as the impacts of the pandemic are constantly changing.Having adjusted for the impacts of working from home and a migration away from city centres, retailers are establishing their competitive advantage by focusing on customer experience strategies. Managing omnichannel complexities is how retailers will deliver on their customer promise and expectations.The complex shift to omnichannelAustralians are shopping online more than ever. Customers now purchase online from brands they deem trustworthy. Because of this, retailers will reshape their online product profiles and reconsider their store footprint for products and categories. It is predicted that, by 2024, up to 10 per cent of floor space will be repurposed in department stores as the shift to omnichannel continues.Retailers are finding omnichannel fulfilment complex. Merchants must adapt their allocation and replenishment models to support total demand, rather than basing them on sales units by location. The challenge for retailers is to adjust allocation for efficient and profitable fulfilment through the most appropriate methods, to prevent unbalanced inventory by store.Customers’ evolving expectationsCustomer expectations and purchasing behaviours are changing rapidly, responding to new regulations placed on retail within a volatile trading environment and their own personal choices related to socialising in crowded shopping centres. Click-and-collect and curbside pick-up are now terms widely used in homes. Home delivery has increased, with the parcel carrier acting as an extension of the retailer. Retailers are being challenged to redefine their promise to customers and their in-store and online experience.Leading retailers are establishing a competitive advantage by responding with agility in their operations and re-emphasising their customer-first approach across the entire organisation. This requires the whole business to buy into a seamless, end-to-end customer-centric view to deliver on the customer promise. Any remaining operational silos within a retailer are challenged to become totally customer focused.The supply chain and last mile delivery are playing a key part in the customer journey and the after-purchase experience is important, too. This creates an added complexity for the omnichannel promise to the customer. Now more than ever, the heads of omnichannel are influencing merchandise and supply-chain decisions.Retailers are redefining their customer strategy, promise, and journeys based on an accelerated omnichannel environment in a disrupted retail industry. They are rationalising their assortment profiles and principles by channel, analysing their online and bricks-and-mortar ranges, and ordering allocations and product space by location. It is important every part of the organisation, including supply chain and merchandise teams, become aligned on fulfilment methods and play its role to deliver on the customer promise.This article was originally published in the 2022 Australian Retail Outlook, powered by KPMG.