Retailers must reevaluate store positioning when implementing omnichannel strategies. This study examines retailers’ strategic preferences toward in-store services, including Buy-Online-Pickup-in-Store (BOPS), Buy-Online-Return-in-Store (BORS), and their combined offering. A stylized model incorporating capacity constraints and strategic consumers’ purchase behavior is developed to analyze omnichannel impacts on brick-and-mortar operations from an inventory perspective. Firstly, profit-maximizing retailers benefit from reducing online channel inventory when handling product returns. Under high online return rates or stringent capacity constraints, retailers prefer maintaining physical-only channels to mitigate returns and capture cross-selling opportunities. Secondly, offering BOPS services remains a strategic advantage during periods of moderate capacity utilization. When the online consumer market expands, spillover effects increase, return rates decrease, and capacity constraints ease, it becomes feasible to consider jointly providing BORS services. Finally, BORS may migrate offline shoppers online, making it unsuitable for high-return-rate products. For omnichannel retailers, this study offers valuable insights into implementing omnichannel strategies under capacity constraints, empowering practitioners to make more informed decisions and optimize operational tactics.

Ensuring the profitability of retailers utilizing in-store inventory for online fulfillment is a pivotal issue in omnichannel retailing. This study examines the inventory allocation challenges faced by retailers when managing interactions between online and offline channels to identify strategies that maximize revenue. The findings enable retailers to address key operational conflicts while implementing omnichannel strategies. We develop an omnichannel newsvendor model, deriving an optimal strategy for retailer inventory level and online acceptance thresholds, demonstrating the economic superiority of this approach over traditional policy. Furthermore, this paper further explores how carry-over inventory influences strategic decisions, particularly in quantifying the trade-off between the cancellation cost and the inventory holding cost. The results reveal that cancellation costs incentivize retailers to increase safety stock and reduce online acceptance thresholds, with strategy sensitivity intensifying as offline demand dispersion grows. Compared to the traditional policy, our policy demonstrates superior performance when the cancellation cost remains below a critical value, though its effectiveness decreases under high offline demand dispersion. Moreover, dynamic strategy adjustments must balance the cancellation cost against the holding cost in the carry-over scenario. The proposed framework systematically integrates inventory allocation with demand admission control, addressing a critical gap in existing literature that has failed to comprehensively link these two operational levers. This dual-focused perspective significantly advances omnichannel inventory management theory.