Retailers and brands devote significant resources to encourage consumer behavior changes. From March, social distancing guidance has concentrated consumer demand in retail eCommerce channels. Once consumers return to more typical out-of-home life patterns, eCommerce retailers will once again compete with other channels for market share. Increased competition will fragment demand over newly developed consumer touch points. Retailers and brands will need to develop new processes to monitor investment effectiveness, and streamline ownership over multiplying touchpoints to drive agile decision making.

During the next 12 months, advantages from continuous improvement across foundational eCommerce capabilities will remain durable. Brands have an opportunity to gain share and expand profitability by improving assortment, digital shelf content, and product discoverability across eCommerce channels. Consumers demonstrated a willingness to change shopping habits and alter brand loyalties based on product availability and clear value communication. eCommerce retailers will further innovate consumer experience to better compete with in-person channels as the economy reopens. Consumer experience innovations tie back to increasing trip frequency and basket size to grow the addressable market. Amazon built a supermarket to complement its organic specialty grocer. Kroger added 3rd party marketplace sellers to increase consumer selection. Walmart launched an annual delivery loyalty program to remove consumer friction. Regional grocery stores partnered with InstaCart to offer home delivery. DoorDash created DashMart to cross sell household essentials alongside its restaurant delivery service.

Retail organizations experiment to capture latent demand. Successful retailers understand profitability to the consumer-item-order level and maniacally drive out cost down the full P&L to expand margins. Data integration, software enabled process management, and rigorous continuous improvement set the foundation for both innovation and margin management. Successful brands will build equivalent granular profit management capabilities to limit information asymmetry with retail.

Retailers similarly experiment with vendor experience innovations to capture a higher share of brand spend, and management attention. Retailers continually refresh total brand spend benchmarks across marketing, advertising, creative, production, operations, assortment, trade, promotions, supply chain, and customer service. Brands creating a single threaded leader for all touch points will be best positioned to leverage their organization’s total investment, and hold retailers accountable for achieving performance targets.

The retail landscape will continue to rapidly change over the next 24 months as media companies add commerce capabilities, manufacturers own last mile fulfillment, retailers bolster media divisions, and out-of-home channels restart. Retailers that engage brands to create new consumer and vendor experiences, leverage granular analytics to drive margin expansion, and enable streamlined decision making across multiple organizational touch points will be best positioned to capture market share as new consumer behaviors begin to cement.