Major economic downturns hit most companies. And manufacturers who sell to their customers through channel partners, such as retailers or value-added resellers, face additional challenges. Under-capitalized partners may be unable to get products to customers — or worse, could go bust. With the current pandemic, the situation appears dire, with even more bankruptcies predicted than occurred during the global financial crisis of 2008-2009....

Most executives will tell you that when shaping business plans and strategy, forecasts can serve as a great counterweight to gut feelings and biases. Most will also admit, however, that their forecasts are still notoriously inaccurate.There are signs, however, that some finance teams’ early experiments with automation, machine learning, and advanced analytics are changing the game—particularly for demand planning and sales-and-revenue forecasts. A chemical distributor, for instance, increased its sales by 6 percent because of its ability to conduct more accurate and frequent forecasts that informed its allocation of resources. A retailer and a global engineering-consulting firm both reported similar benefits from advanced analytics, as measured by user responses to new products and by changes in profit on income, respectively.The COVID-19 pandemic has disrupted the usual forecasting and planning approaches. Demand patterns for different products and services—consumer goods, especially—have been abnormal, given the uneven spread of the virus and continuing economic and health uncertainties. Models that rely heavily on historical data therefore cannot entirely capture the effects of the crisis on both current operations and into the next normal....

Coming into 2020, the relationship between consumer-goods manufacturers and retailers showed signs of strain, with each battling to stay ahead of new challenges. For consumer-goods companies, there were threats from niche and private-label brands and from the squeezed margins that came with selling more goods through higher-cost channels. Retailers, meanwhile, were trying to step up their digital game while dealing with pressure from discounters, e-commerce giants, and price-driven consumers.Then COVID-19 became a global pandemic and everything changed. As we noted in a recent article, COVID-19 is amplifying a dozen trends that have been disrupting the industry for more than a decade. The move to online shopping seemed to accelerate at warp speed, with US grocery’s penetration into e-commerce rising from 13 percent before the pandemic to more than 31 percent by the end of March. 1 1. David Bishop, “Online grocery: New consumer research press release,” research conducted August 21–23, 2019, and March 23–25, 2020, Brick Meets Click, March 26, 2020, brickmeetsclick.com. As consumers stayed home to stop the spread of the coronavirus, they used mobile apps and websites to buy a different mix of products than they had previously purchased in stores, with more focus on pantry staples and at-home occasions. Those who did venture into stores found the experience transformed by new rules on physical distancing, hygiene, and mask use. By mid-June, McKinsey’s consumer-sentiment survey found that more than 75 percent of Americans had tried new brands from new places or otherwise changed how they shop as a result of the crisis.With so many factors in flux, the case for deeper ties between consumer-goods companies and retailers has rarely been stronger. Along with the challenge of keeping products stocked during the current public-health crisis, retailers and manufacturers now need to collaborate more closely to adapt to new consumer preferences, shopper behaviors, and regulations. In doing so, they will be better equipped to navigate trends that many thought would take years to play out: touchless payments, curbside pickups, automated fulfillment, omnichannel marketing, and more (Exhibit 1)....