Navigating the Evolving Retail Landscape

Linnworks, a leading provider of e-commerce inventory and order management software, unveiled its highly anticipated State of Commerce Ops 2025 report, delivering a clarion call to retail executives navigating an increasingly complex operational landscape. The report’s insights resonate deeply with large retail enterprises, offering a data-driven roadmap for addressing the challenges and opportunities shaping the future of e-commerce. For retail leaders—CEOs, COOs, CFOs, CMOs, and Chief Supply Chain Officers—the findings underscore a pivotal moment: the need to adapt to rapid technological advancements, shifting consumer expectations, and the growing dominance of multi-channel selling to maintain competitive advantage.

The retail sector in 2025 is marked by resilience and complexity. With 86% of surveyed retailers reporting revenue growth—38% seeing increases exceeding 20%, and 48% experiencing growth between 5-20%—the industry demonstrates robust momentum. Yet, this growth is not without its hurdles. From inventory visibility challenges to the intricacies of global expansion, retail executives face a landscape where operational excellence is non-negotiable. The Linnworks report, based on insights from 200 mid-market retailers across the UK and US, highlights key trends and strategies that are redefining commerce operations. This article explores the report’s findings, offering a sophisticated analysis of the operational shifts retail executives must embrace to thrive in this dynamic environment.

The 2025 Retail Landscape: Growth Amid Complexity

The State of Commerce Ops 2025 report paints a picture of an e-commerce sector that is both thriving and under pressure. Only 2% of retailers reported a decline in revenue or order volume, signaling overall industry resilience despite global economic uncertainties. However, this growth is accompanied by increasing operational complexity. Retailers are grappling with the demands of multi-channel selling, with 60% now operating on four or more marketplaces—a reflection of the continued shift toward platforms like Amazon, eBay, and emerging players such as TikTok Shop. This marketplace dominance, where over 50% of consumers prefer shopping via marketplaces over traditional online stores, underscores a fundamental change in consumer behavior that retail executives cannot ignore.

The report also highlights the rapid pace of technological change. Nearly half (45%) of retailers plan to invest in technology and automation in 2025, recognizing that these investments are no longer optional but essential for growth. Businesses that have already automated order fulfillment and inventory management report smoother operations and higher customer satisfaction, a trend that is particularly pronounced among higher-revenue firms. For instance, 92% of companies generating $76–100 million annually use ERP systems, compared to just 57% of those in the $11–20 million range. These systems are critical for managing fulfillment, sales channel integration, and financial data, enabling scalability without sacrificing efficiency.

Key Operational Shifts: Insights for Retail Executives

The Linnworks report identifies several operational shifts that are reshaping the retail landscape. Below, we delve into the most critical trends and their implications for retail executives across various roles.

1. Technology Investments as a Growth Imperative

For retail CEOs and CFOs, the report’s emphasis on technology investments signals a strategic priority. The finding that nearly half of e-commerce businesses are planning new technology investments in 2025 reflects a broader industry consensus: automation and AI are non-negotiable for maintaining competitiveness. Retailers who automate key processes—such as order fulfillment, inventory management, and customer service—report significant improvements in operational efficiency and customer satisfaction. This is particularly relevant for large retail enterprises, where the complexity of operations demands robust, scalable solutions.

AI, in particular, is emerging as a transformative force. From demand forecasting to real-time inventory tracking, AI enables retailers to anticipate consumer needs and optimize operations with unprecedented precision. For CFOs, the ROI of these investments is clear: automation reduces errors, lowers operational costs, and frees up resources for strategic initiatives like market expansion. However, the report also cautions that technology adoption must be strategic. Retail executives must prioritize solutions that integrate seamlessly with existing systems, ensuring a unified view of operations across all sales channels.

2. Marketplace Dominance and Multi-Channel Strategies

For CMOs and Chief Supply Chain Officers, the report’s findings on marketplace dominance highlight the need for a robust multi-channel strategy. With 60% of retailers selling on four or more marketplaces, and over 50% of consumers preferring these platforms, the shift away from traditional online stores is undeniable. This trend presents both opportunities and challenges. On one hand, marketplaces offer access to vast customer bases and streamlined logistics; on the other, they introduce complexities in inventory management, pricing, and brand consistency.

CMOs must adapt by tailoring marketing strategies to the unique dynamics of each marketplace, leveraging data analytics to personalize customer experiences and drive loyalty. Meanwhile, Chief Supply Chain Officers face the challenge of synchronizing inventory across multiple channels in real time. The report notes that 34% of retailers cite managing multiple channels as their biggest operational hurdle, a pain point that can lead to overselling, stockouts, and dissatisfied customers. Solutions like Linnworks’ centralized inventory control and real-time management tools are critical for overcoming these challenges, enabling retailers to maintain visibility and agility in a fragmented market.

3. International Expansion: Opportunities and Obstacles

For retail CEOs and COOs, the report’s insights on international expansion offer a compelling growth opportunity tempered by significant challenges. UK retailers are leading the charge, with 78% already operating in international markets, while US retailers are catching up, with 29% planning to expand globally in the next 12 months. The potential for revenue growth is immense, but the hurdles are formidable: 46% of retailers cite customs and tax complexities, 35% highlight cross-border shipping issues, and 32% struggle with managing international returns.

COOs must prioritize technology and partnerships to navigate these obstacles. For example, integrating with global couriers and leveraging platforms that streamline customs compliance can mitigate logistical challenges. CEOs, meanwhile, must weigh the costs and benefits of expansion, ensuring that their organizations are operationally equipped to handle the complexities of international markets. The report suggests that retailers who invest in scalable solutions—like Linnworks’ seamless marketplace integration and automated workflows—are better positioned to capitalize on global opportunities without sacrificing efficiency.

4. Inventory Visibility: A Persistent Pain Point

The report identifies inventory visibility as a major roadblock for scaling businesses, a concern that resonates deeply with Chief Supply Chain Officers. In an era where consumers expect real-time updates on product availability, the inability to maintain accurate inventory across multiple channels can lead to significant operational and reputational risks. The reliance on outdated tools like spreadsheets, still prevalent among smaller retailers, exacerbates this issue, creating data silos that hinder scalability.

Retail executives must address this challenge head-on by adopting integrated solutions that provide a single source of truth for inventory data. The report highlights the success of businesses that have implemented ERP systems and automation tools, noting that these firms achieve greater efficiency and customer satisfaction. For large retail enterprises, the stakes are even higher: a single stockout can erode consumer trust and drive customers to competitors. Investing in real-time inventory management systems, as recommended by the report, is essential for maintaining operational excellence in 2025.

5. Consumer Expectations: Balancing Convenience and Transparency

For CMOs and customer experience leaders, the report’s insights into consumer expectations underscore the need to prioritize convenience and transparency. While next-day delivery is no longer a top priority—only 13% of consumers cite it as a key concern—free shipping (52%) and hassle-free returns remain paramount. Additionally, 62% of consumers report shipping delays as their top complaint, followed by item damage (44%), highlighting the importance of refining logistics operations.

Retail executives must respond by enhancing their logistics and returns processes. Offering a variety of shipping options at checkout, as well as clear return policies, can reduce cart abandonment rates and boost customer loyalty. The report also emphasizes the growing importance of sustainability, with consumers increasingly favoring retailers who prioritize eco-friendly practices. CMOs can leverage this trend by promoting sustainable initiatives, such as circular economy models, to differentiate their brands in a crowded market.

Strategic Imperatives for Retail Executives

The State of Commerce Ops 2025 report offers a clear set of strategic imperatives for retail executives looking to navigate the operational shifts of the coming year:

1. Embrace Technology as a Growth Driver: Invest in AI and automation to streamline operations, reduce errors, and enhance customer satisfaction. Prioritize solutions that integrate seamlessly across all sales channels, providing a unified view of your business.
2. Master Multi-Channel Selling: Develop robust strategies for managing inventory, pricing, and branding across multiple marketplaces. Leverage data analytics to personalize customer experiences and maintain consistency across platforms.
3. Prepare for Global Expansion: Address the complexities of international markets by investing in technology and partnerships that streamline customs, shipping, and returns. Ensure your operations are scalable to handle the demands of global growth.
4. Enhance Inventory Visibility: Adopt integrated solutions that provide real-time inventory data, eliminating data silos and enabling proactive decision-making. This is critical for maintaining customer trust and operational efficiency.
5. Prioritize Consumer Convenience and Transparency: Refine logistics operations to offer free shipping, hassle-free returns, and real-time tracking. Promote sustainable practices to align with consumer values and differentiate your brand.

A Call to Action for Retail Leaders

The release of Linnworks’ State of Commerce Ops 2025 report marks a pivotal moment for retail executives. In a landscape defined by rapid growth, technological disruption, and evolving consumer expectations, operational excellence is the key to unlocking sustainable success. The report’s findings—spanning the rise of marketplaces, the necessity of technology investments, and the challenges of global expansion—offer a roadmap for navigating this complex environment.

For retail leaders, the message is clear: adapt to these operational shifts with agility and foresight, or risk being left behind. By embracing the strategies outlined in the report, retail executives can position their organizations not just to survive but to thrive in the dynamic world of 2025 e-commerce. The future of retail is here—now is the time to lead.