Lines Are Blurring Between Europe’s Retailers and CPG Firms
Both stores and suppliers are leaning heavily on the cloud to provide greater scalability, agility and cost savings, ISG Provider Lens™ report says
The 2023 ISG Provider Lens™ Retail & CPG Services report for
“Cloud-first is becoming the new normal for Europe’s retailers and CPG firms,” said Andreas Fahr, partner and managing director, ISG DACH. “Service providers can play a key role in helping these companies by managing transformations and operating the resultant infrastructures.”
During the pandemic, many of Europe’s CPG firms got a tantalizing taste of the retail customer experience and have since sought to widen their reach by adopting a direct-to-consumer (D2C) sales approach through own-brand stores and online channels, the ISG report says. In fact, according to the report, some of the major CPG brands aim to achieve more than half of their sales through D2C channels. Even CPG companies that don’t currently have plans for D2C sales are seeking to strengthen their relationships with consumers through loyalty programs, highly personalized marketing and offers redeemable through stores, ISG says.
Just as some CPG companies are starting to resemble retailers, some retailers are behaving more like CPG firms by developing their own private-label brands that they promote and sell both in store and online. Many traditional brick-and-mortar stores that were able to remain open during the pandemic implemented technologies such as contactless payment systems, self-checkout options and in-store pickup solutions, ISG says.
These advances have raised customer expectations both in-store and online. As a result, retail and CPG companies are increasingly relying on IT services to digitize and optimize their new customer-facing and supply-chain processes, the ISG report says.
“Whether your firm is a CPG company or a traditional retailer, your best course is essentially the same,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “New IT technologies, such as headless commerce [an e-commerce architecture where the front end is decoupled from back end] based on a microservices architecture, are paving the way forward.”
The report also examines how AI and machine learning models are driving better customer support through automated support services and more personalized responses.
The 2023 ISG Provider Lens™ Retail & CPG Services report for
The report names Accenture, Capgemini, Cognizant, HCLTech, Infosys, TCS and Wipro as Leaders in all four quadrants, while IBM is named as a Leader in two quadrants. Kyndryl and LTIMindtree are named as Leaders in one quadrant each.
In addition, Genpact, Hitachi Vantara, LTIMindtree and Tech Mahindra are named as Rising Stars — companies with a “promising portfolio” and “high future potential” by ISG’s definition — in one quadrant each.
Customized versions of the report are available from Cigniti and Infosys.
The 2023 ISG Provider Lens™ Retail & CPG Services report for
About ISG Provider Lens™ Research
The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across
A companion research series, the ISG Provider Lens Archetype reports, offer a first-of-its-kind evaluation of providers from the perspective of specific buyer types.
About ISG
ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 900 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in
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Will Thoretz, ISG
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Kate Hartley, Carrot Communications for ISG
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Source: Information Services Group, Inc.