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Amazon excels at understanding and delivering a shopping experience that meets online shoppers鈥� needs and wants. But offline shoppers often have different desires, which Amazon has yet to demonstrate the ability to understand and meet.

Our analysts have already made their big predictions for the year ahead, but the newsletter team has a few more to add to the list. As Amazon hits the gas on grocery, it may use its Amazon Fresh stores for fulfillment. Plus, we think beauty will get personal, Amazon could give digitally native brands a helping hand, and a healing economy could spell trouble for discount stores.

Walmart鈥檚 clear value proposition drove shoppers across all income levels, helping it win share鈥攅specially in the grocery category, which it already dominated. And its Walmart+ membership service helped it retain those customers by offering online orders quickly delivered to their doors at no additional cost.

This is in addition to the gross digital sales of the department stores businesses in Argentina, Chile, Colombia, and Peru; home improvement businesses in Argentina, Brazil, Chile, Peru, and Uruguay; supermarket businesses in Chile and Peru; and Linio. Liverpool.

Through companies that aren鈥檛 strictly retailers but sell goods or services online. Through companies that facilitate digital commerce via services such as food and grocery delivery. All of those businesses have valuable first-party data drawn from direct relationships with their customers, so they鈥檙e fertile ground for precise targeting in environments that are theoretically privacy compliant.

After closing locations last year, Amazon opened several new Fresh supermarkets in September. 鈥淕谤辞肠别谤测 in person is not something that Amazon's been able to get right,鈥� said our analyst Sara Lebow. 鈥淚鈥檓 fascinated to see if it actually works this time.鈥�. Amazon also quietly added ads to Rufus. 鈥淕en AI and chatbots is just not a space that we've seen ads yet,鈥� said Stambor.

Baby boomers are more brand-loyal than US adults across multiple categories, according to Morning Consult. They show the highest brand loyalty (76%) for groceries and household goods.

The discount retail channel has grown 9.2% YoY globally, the third-fastest growing retail channel behind ecommerce and on-premise (in-store), though discounters encompass both physical and digital retail, too. Convenience plays a major role in the purchase process, too鈥�55% of global consumers would spend more on shopping formats that are convenient to use.

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Grocery inflation鈥攚hich peaked at 11.4% YoY in 2022鈥攄rove many cost-conscious consumers to trade down to private labels to save money. Those shoppers liked what they found; a large share (80%) say store brands are 鈥渏ust as good or better than鈥� name brands, per an Ipsos survey.

Only 13% of Gen Zers say store rewards/loyalty programs are the most important factor in grocery store selection. What it means for 2025: Another sign of Gen Z鈥檚 interest in value, Gen Z looks to loyalty programs to maximize their purchases.

The news: PubMatic has announced a significant collaboration with Instacart that will allow it to harness the grocery delivery platform鈥檚 first-party retail media data for enhanced programmatic advertising. GroupM will be the first agency to participate; Mars is among the first brands using this initiative for its advertising strategies on PubMatic鈥檚 Convert platform.

Meeting customers鈥� grocery needs: While Amazon has a significant grocery business, Jassy acknowledged the company has yet to find the right scalable model. It recognizes the need to expand its physical footprint, given that the vast majority of grocery sales occur offline. (Our US Grocery Retail Ecommerce Sales forecast suggests 88% of sales will be offline this year.).

The assistant, powered by Anthropic, will be able to analyze images, create smart home routines, and execute tasks like purchasing concert tickets or ordering groceries. The limitations: Delays for an Alexa+ release鈥攊t was originally announced in 2023鈥攚ere partly due to challenges with cost-effectiveness and problems integrating with third-party services and devices.

顿辞辞谤顿补蝉丑鈥檚 grocery business is booming, and Instacart is leaning on advertising to tide it over as its delivery volumes are down. Perhaps taking a cue from both, Uber Eats continues to add non-restaurant delivery partners while also building out its advertising platform.

How it works: Sensei鈥檚 main product consists of readymade automated pod structures designed to help organizations such as supermarkets and hospitality companies operate more efficiently. The structures include compact stores, modular cabinets, and smart lanes that can, for instance, transition a buffet into an automated store during slow hours.

Even as grocery price inflation eases, consumers continue buying store brands. When asked what鈥檚 driving the trend, roughly two-thirds of shoppers mentioned factors like quality, taste, and store brands鈥� ability to meet specific dietary needs, per an FMI consumer survey. Private labels differentiate retailers鈥� offerings.

On today鈥檚 podcast episode, we discuss what鈥檚 fueling Amazons online shopping revenue, how much its advertising business is contributing to its total revenue, and how significant its cloud business has become. Tune in to the discussion with Senior Director of Podcasts and host Marcus Johnson, Senior Director of Briefings Jeremy Goldman, and Analyst Rachel Wolff.

Private labels make up nearly a quarter (23.8%) of total grocery units sold, according to July 2024 data from Numerator. While Aldi is the No. 1 private label retailer in the US, with private label representing 80% of its total units sold, Kroger鈥檚 Smart Way is the fastest-growing private label, increasing its unit volume 135% YoY, per Numerator.

But demand has waned post-pandemic, and many consumers are ditching drugstores altogether in favor of online retailers. For example, CVS is closing about 10% of its locations. We forecast that CVS retail clinic patients will decline 4.6% next year and 7.9% in 2026. Walgreens plans to close 1,200 stores over the next three years.

Trader Joe鈥檚 small, curated stores and limited footprint sets it apart. Between its branding, product choice, and customer experience, there are a lot of lessons other retailers beyond grocery can learn from the Trader Joe鈥檚 model. Here are four takeaways from Trader Joe鈥檚.

As customers grab the same grocery staples they have for decades, Walmart is betting that gamifying the experience will challenge those habits. The retailer plans to launch Walmart Unlimited, a three-part miniseries that features the entrepreneurs behind its products. Launched last month on Spatial, the game includes full commerce integration that enables in-app purchases.

The partnership will see targeted ads and messages delivered to the grocery chain鈥檚 ecommerce customers across 11 portfolio brands, such as Safeway, ACME Markets, Vons, and Jewel-Osco. Moreover, Albertsons will expand its brand messaging across Rokt's network of ecommerce retailers, which includes prominent names like Kohl鈥檚, Uber, AMC Theatres, Grubhub, and Ticketmaster.