As ecommerce scales, online returns are becoming a permanent margin drag. Fees and tighter policies can shift consumer behavior but put sales and loyalty at risk, forcing retailers to balance cost control with convenience expectations.

Rival expansions force sharper value plays and upgraded store experiences.

Last week, Amazon announced it would shut down its Amazon Fresh and Amazon Go locations. While this doesn’t signal a full retreat from physical retail, it does underscore Amazon’s growing emphasis on digital grocery, which has clear implications for its retail media strategy. Instead of prioritizing advertising tied to physical stores, Amazon is doubling down on media formats that can scale well beyond its owned retail footprint.

Earlier this month, the Trump administration released its latest Dietary Guidelines for Americans, marking a shift in nutrition guidance toward whole foods, protein-rich diets, and reduced consumption of added sugars and highly processed foods. These changes may shape consumer expectations and food industry strategy over the next five years, influencing purchase decisions, brand trust, and competitive positioning across the food ecosystem.

While we were right that retailers would offer richer in-store experiences to attract shoppers, we were wrong about how Amazon, discount retailers, and dollar stores would evolve their physical and digital strategies. From AI tools that stayed online to unfulfilled marketplace ambitions, here’s how we did with our 2025 predictions.

Amazon’s move to fold perishable groceries into same-day delivery is paying off quickly, with nine of the top 10 best-selling items in eligible markets now perishables—a sign that shoppers trust the faster service for everyday needs. The shift supports CEO Andy Jassy’s bullish stance on grocery as Amazon expands same-day perishables to more than 2,300 locations and builds on more than $100 billion in online grocery sales over the past year. With Walmart and Kroger also ramping up rapid fulfillment, the stakes are rising in a grocery ecommerce market surging in both order frequency and value.

Despite multiple pivots and significant investments, Amazon continues to struggle in a sector that represents one of the largest consumer spending categories. "Amazon dominates ecommerce with nearly 40% market share, but grocery remains the category it just can't crack," said our analyst Suzy Davidkhanian on a recent episode of “Behind the Numbers.”

In a special Thanksgiving-themed episode of “Behind the Numbers,” we ranked the retail and brand initiatives we’re thankful for this season, from viral merchandise to purpose-driven campaigns. "We're looking at those strategies, launches, and collabs that we're genuinely grateful for, the moves that made us smile, surprised us, or gave us hope for where retail is headed," said our analyst Suzy Davidkhanian.

Whole Foods has cut prices on more than a quarter of its products in the past year, including over 1,000 private-label items, its chief merchandising and marketing officer said at Groceryshop, per Modern Retail. Weekly promotions and deals tied to specific days reinforce the value push. The retailer needs to prove that “premium” and “value” aren’t mutually exclusive. By doubling down on price investments, amplifying Prime-member discounts, and leaning into convenient, high-quality prepared foods, the grocer can reframe itself as both aspirational and accessible.

Amazon will sell products from its Whole Foods private labels in Singapore, a country where it has no physical stores, per Bloomberg. That experiment could be repeated in other markets, giving the retailer an opening to grow its grocery business without investing in brick-and-mortar retail.

The news: Gen Z is reshaping how consumers shop, spend, and stay well—without ever leaving their screens. US Gen Zers record 425 digital actions a month—40.3% more than Gen Xers and 141.5% more than baby boomers, per PYMNTS Intelligence. Our take: Brands should partner with carefully chosen SMEs to expand reach. High social video subscriber counts won’t bring the best ROI if creators aren’t well-versed in what they’re promoting. They should also ensure websites and checkout processes are frictionless. Gen Z wants quick, effortless experiences. Brands that provide those have the best chance to win them over, and other generations will follow their lead.

The news: Eight years after acquiring Whole Foods, Amazon is moving to more fully integrate the grocer into its core business, Business Insider reports. Our take: Amazon is clearly aware of the friction—and the opportunity—in its grocery ecosystem.

US paid retail membership fee revenues will be higher than ever before in 2025, reaching $46.39 billion, according to our May 2024 forecast. That’s an increase of 10.8% YoY, with over half (51.8%) of these revenues going to Amazon.

For October’s Unofficial Most Interesting Retailers list, we’re looking at eight retailers hoping to escape the ghastly realm of spooky deserted shopping centers and zombie malls. Gap, Amazon Fresh, and Victoria’s Secret lead our trick-or-treat bag of comeback brands.

Amazon takes the bells and whistles out of its brick-and-mortar grocery experience: Amazon Fresh stores will no longer feature Just Walk Out as the retailer focuses on making its stores more inviting.

Amazon bets that Prime members will pay extra for free grocery delivery: The retailer is testing a grocery subscription add-on for $9.99 per month in its latest attempt to boost the appeal of its grocery business.

Amazon will offer grocery delivery to non-Prime members nationwide: The retail giant also plans to resume opening Amazon Fresh stores next year.

Despite the rise of ecommerce, nearly 85% of US retail sales still occur in-store, according to our forecast. To attract customers to physical stores, brands must continually innovate to offer memorable experiences.

Walmart has the largest audience of any digital grocery platform. But our survey found that Amazon Fresh customers were more active and willing to try new products.

In the two years since our inaugural “Power of Amazon” report, Amazon has remained a retail and tech powerhouse—but it hasn’t been immune to economic uncertainty, shifting consumer behaviors, or increased competition. We examine how Amazon’s 19 business divisions have changed and how these new developments might affect your industry.