Today’s retail scene is a study in contrasts.
While 50% of buyers intend to increase online spending, the other half prefer shopping in retail stores. While inflation drives price-consciousness, selective splurging persists. And while mobile shopping surges, in-store purchases remain equally popular.
These trends show how digital and physical channels aren’t competitors today—rather complementary forces satisfying diverse buyer demands. But how do these factors affect which retail channel you should sell on?
In this guide, we’ll explore common retail channels and how they’re evolving with new tech and shopping habits. You’ll learn about the top retail channel trends and how to choose the perfect channel for your business.
What are retail channels?
Retail channels are how businesses sell their products or services to end consumers. These include physical stores, online shops and marketplaces, mobile apps, social media platforms—all of which are means of connecting sellers with buyers.
Types of retail channels
Brick-and-mortar stores
A brick-and-mortar retail store is a physical location where buyers can visit to browse, buy products, and interact with your brand face-to-face.
While online shopping is on the rise, a 2023 PwC survey found that half of buyers still want to shop in a local store. Buyers can touch, feel, and try out products and get the instant satisfaction of walking out with their purchase.
In addition to serving direct consumers, brick-and-mortar stores can also be vital for B2B transactions, where businesses sell their products to other retailers. This model allows manufacturers and wholesalers to showcase their products in a physical space, making it easier for potential retail partners to evaluate and purchase inventory for resale.
Pros of this retail channel include:
- The ability to build trust through personal interactions
- Immediate product access for customers
- Help with easy returns and exchanges
- Complete control over the customer experience
- Build brand presence in high traffic areas
Challenges of the physical retail channel consider include:
- Higher operational costs (rent, utilities, staff)
- Limitations on geographical reach and operating hours
- Complexities in managing inventory levels
Modern brick-and-mortar stores often use point-of-sale (POS) systems, such as Shopify POS, to streamline checkout, track inventory, collect customer data, and unify data with online stores.
Take Vestique, a fashion retailer that used Shopify POS to unify its online and offline sales channels. This led to an 18% year-over-year sales growth and the opening of three new specialty stores.
“A lot of retailers are frustrated because they're trying to integrate their legacy POS systems into other platforms like their social media and they weren't built to work that way,” says Vestique’s owner Mike Reiss. “On Shopify, most of these systems have an integration out-of-box.”
Online retail or ecommerce
Online retail, often referred to as ecommerce, means buying and selling goods over the internet through digital platforms. It offers 24/7 accessibility, global reach, and virtual storefronts with diverse product ranges.
By 2024, global ecommerce sales are expected to exceed $4.2 trillion, with nearly a quarter of all retail transactions expected to occur online by 2027—so it’s no surprise that brick-and-mortar retailers are supplementing in-person sales with those made by international online shoppers.
Pros of ecommerce as a retail channel include:
- Global accessibility and 24/7 availability
- Lower operational costs compared to physical stores
- Supports convenient price and product comparison for customers
- Allows flexible fulfillment options (e.g., home delivery, click-and-collect)
- Scalability—online stores can serve millions of customers simultaneously
Cons of this channel include:
- Potential trust issues for new/unfamiliar brands
- Higher shipping costs and delivery times compared to physical stores
- Cybersecurity and data privacy concerns
- Intense competition in the ecommerce industry
- Lack of face-to-face interaction that some consumers need before buying from a brand
Ecommerce platforms like Shopify help businesses create professional online stores and unify online sales with offline transactions. Choose a professionally designed theme, process online payments securely, and localize the online experience for international shoppers when you start an online store with Shopify.
Mobile retail
Mobile retail, or m-commerce, involves buying and selling goods through smartphones and tablets. The retail channel includes mobile-friendly websites and apps with responsive designs that adapt to different screen sizes. It often includes one-click ordering and mobile wallet integration for swift, secure payments.
Mobile retail is big business: In the US alone, retail m-commerce sales are expected to reach $542.73 billion by the end of 2024, making up 44.6% of all retail ecommerce sales.
Pros of the mobile retail channel include:
- Helps with shopping on-the-go—anytime and anywhere
- Integrations with with other mobile activities (e.g. social media and messaging)
- The ability to offer personalized experiences through location-based marketing
- Faster transaction speeds with shopping apps like Shop app, which store your customer’s details for one-click checkout
Cons of mobile commerce include:
- Limited screen space can make product browsing difficult
- Potential security concerns for mobile payments
- Difficult to ensure consistent experiences across different devices and operating systems
- Mobile networks can be unreliable, potentially disrupting the shopping experience
Shopify lets you expand your mobile retail capabilities with features like mobile-responsive themes and optimized checkout. Combine it with Shop to reach the 100+ million buyers already using the mobile app to buy from their favorite brands.
Social commerce
Social commerce blends social media with online shopping. It lets users discover, research, and buy products without leaving their favorite social platforms.
Over five billion people are on social media in 2024, showing how important it’s becoming as a retail channel. US social commerce earnings are expected to reach $80 billion by 2025.
Pros of social media as a sales channel include:
- Collecting valuable data on consumer behavior and preferences
- Direct communication between brands and customers
- Encourages word-of-mouth marketing through social sharing
- Allows for highly targeted advertising
Cons of social commerce include:
- Platform dependency can limit control over customer experience
- Negative feedback can spread quickly
- Demand for constant content creation and community management
- Can be hard to stand out in busy social feeds
- Quick changes in social media algorithms can affect sales
Social commerce is great for building community and works especially well for visually-driven industries like fashion, lifestyle, and beauty. For example, DBL Jewelry founder Liz Portio used TikTok to build a 2 million follower base, growing her business to $1.2 million in three years with just $40 initial capital.
Pop-up shops
Pop-up shops are temporary retail spaces that run for a limited time, from a few days to several months. They let brands create unique, short-term experiences, test new markets, or generate buzz around products.
PopUp Kids Consign + Shop, for example, sells new and used children’s clothing. It regularly hosts pop-up events in Washington and posts dates on its Shopify store and social media pages.
Brands use this retail channel because it offers:
- A cost-effective way to test new markets or products
- Opportunity to offer unique, immersive brand experiences without the overheads of a fixed location
- Ability to test new markets without committing to a permanent space
- Chance to build buzz and excitement around a time-limited event
Cons of pop-up shops include:
- Limited time to make an impact and generate sales
- Potential high upfront costs for design and setup
- Logistical challenges in quick setup and teardown
- Success can depend heavily on factors like weather or local events
Omnichannel
Omnichannel retail offers customers a seamless shopping experience across all channels—physical stores, online platforms, mobile apps, and social media. It syncs data across platforms for real-time inventory updates, personalized recommendations, and cross-channel customer service.
Some 73% of shoppers use multiple channels to research before buying, so having an omnichannel presence can be crucial for your growth. And though it requires more investment upfront, brands that sell across multiple retail channels can see up to a 190% increase in revenue.
Pros of omnichannel retail include:
- Seamless customer experiences across all channels
- Combines online convenience with physical retail immediacy with features like buy online, pick up in-store (BOPIS) and ship-from-store options.
- Offers richer customer data and insights for personalization
Cons of this approach are:
- High initial tech investment
- Data security and privacy concerns
- Consistency challenges across channels
- Extensive staff training requirements for multi-channel operations
Shopify POS helps retailers integrate their in-store and online sales, enabling a seamless omnichannel experience. Toby’s Sports, for example, experienced a 13.5x increase in sales and 50% conversion growth after moving to Shopify and taking advantage of its omnichannel capabilities.
“Implementing Shopify has been pivotal in delivering a superior omnichannel experience to our customers,” says president Toby Claudio. “The platform is incredibly straightforward to use, and thanks to its seamless integrations we can easily manage our online and in-store operations, ensuring consistency and convenience at every touchpoint.”
Retail channel trends
Blending digital and physical retail
Blending digital and physical retail is the new norm. Shoppers now expect to move seamlessly between in-person browsing, online ordering, and marketplace or social media purchases. To keep up, retailers are embracing omnichannel strategies that bridge the gap between digital and physical shopping.
Omnichannel retail offers flexible order fulfillment options like BOPIS (buy online, pick up in-store), endless aisles, and curbside pickup. Some retailers are also experimenting with phygital retail—immersive, tech-advanced physical stores with smart shelves, virtual fitting rooms, beacons, and smart carts.
No matter what mix of channels you use, the goal is to create a cohesive, channel-agnostic customer experience that boosts engagement and loyalty.
The rise of retail media
Retail media involves brands advertising directly on retailers’ platforms through in-store promotions, digital displays, and sponsored ads.
Currently, 30% of Americans discover new brands through ecommerce websites, online marketplaces, and sponsored ads, making retail media networks (RMNs) essential for brands looking to expand their reach.
RMNs like Amazon Ads, Walmart Connect, and Kroger Precision Marketing are growing quickly. Walmart Connect, for instance, made $3 billion in revenues in 2023 and is expanding significantly. Amazon Ads had a 75.2% share of the US retail media market last year—it's quickly becoming as big an advertising entity as Google and Meta.
Shopify Audiences is a valuable RMN for Shopify Plus merchants in the US and Canada, with users having cut customer acquisition spend by up to 50%. It’s helped brands like BUBS Natural, Happy Hippo, BlenderBottles, and more to significantly improve their returns on ad spend.
AI-driven personalization
According to Twilio, 57% of buyers spend more time with brands that offer tailored content like personalized product recommendations and offers. McKinsey also reports that AI-powered personalization can lead to a 10–15% revenue increase.
As the technology continues to fuel growth, more businesses are catching on to its potential. In fact, 92% of businesses are now leveraging AI-driven personalization to enhance their growth strategies across multiple retail channels. These businesses are employing various techniques, including:
- Product recommendations: AI suggests relevant items based on browsing and purchase history.
- Dynamic pricing: AI adjusts prices in real time based on demand and other factors.
- Chatbots: Offer 24/7 customer support with personalized responses.
- Predictive analytics: AI forecasts trends to help with inventory and marketing.
- Visual search: Customers can upload images to find similar products.
Shopify offers AI tools for businesses of all sizes. For example, Shopify Magic helps create custom product descriptions, emails, and social media posts. Other useful Shopify apps include Boost AI Search & Filter for product recommendations and Rep AI for personalized customer service.
How to choose your retail channels
1. Know where your customers shop
Understanding your target audience’s shopping habits is crucial. Use market research, customer surveys, and focus groups to find out how your customers prefer to shop (e.g., in-store, online, mobile, social media). Look at demographic data to see which channels are popular among your target age groups, locations, and lifestyles.
2. Consider your product
Think about whether your product benefits from in-person examination (like clothing or furniture) or if it’s easy to sell online (like digital goods or books). Luxury items do better in exclusive boutique settings, while budget-friendly products could work well in several channels like online or social media.
Local stores or efficient delivery systems might be crucial for products with short shelf life. If your product offers customization, channels that support interactive features could be a good fit.
3. Determine costs
Run a cost-benefit analysis to make sure your chosen channels offer a good return on investment. Consider expenses like store leases, website development, or platform fees for online marketplaces.
Factor in staffing, inventory management, and maintenance costs for each channel. Don’t forget to include the cost of promoting your product in each channel and any shipping or handling expenses.
Evaluate your team’s skills and available time. Some channels, like marketplaces, require less setup but have ongoing fees. Others, like global ecommerce sales sites, need more initial work but offer more control and potentially lower long-term costs.
4. Understand scalability
The best retail channels are those that grow with your business. Look at how easily you can expand within each channel (e.g., opening new physical retail stores or adding product lines on ecommerce platforms). Consider how different channels can handle increased product volumes and variety and how well they can support a growing customer base.
Begin with one or two different retailer channels that fit your goals and resources, and then add different retail channels as you grow.
Building a resilient retail strategy
Whether you’re starting your first online store or considering expanding to open multiple retail locations, success comes from understanding your customers and choosing the right platforms to reach them. Start where you are and grow thoughtfully. As you evolve, keep an eye on emerging trends and be ready to adapt.
Shopify supports sellers at every stage, from solo entrepreneurs to established brands, by providing the tools needed to achieve their unified commerce goals. With features supporting everything from payment processing to multi-store inventory management, Shopify scales with your business, helping you streamline processes and improve efficiency as you grow.
Retail channel FAQ
What is a retail channel in marketing?
A retail channel is a platform where businesses sell products directly to end consumers. This can include physical stores, online shops, mobile apps, and social media storefronts.
What is the difference between retail channel and wholesale channel?
Retail channels sell directly to consumers, while wholesale channels sell products in bulk to other businesses or retailers. Retail also focuses on individual sales, whereas wholesale deals with larger quantities at lower prices per unit.
What is the traditional retail channel?
The traditional retailer channel includes brick-and-mortar stores like department stores, supermarkets, and shopping malls where buyers physically go to browse and buy products.
