U.S. Retailers Meet New Demands With Data, Cloud Services

Rhea-AI Summary

The 2024 ISG Provider Lens™ Retail & CPG Services report highlights the evolving landscape of U.S. retail and consumer packaged goods (CPG) industries. Key findings include:

1. Companies are adopting data-driven strategies and cloud services to enhance customer experiences and operational efficiency.

2. Integrated inventory management and AI-powered customer data platforms are being implemented to meet consumer demands for seamless shopping experiences.

3. Extended reality (XR) technologies are being used to create innovative digital-plus-reality experiences.

4. Firms are preparing for stricter data privacy regulations by adopting governance platforms and management services.

5. Automation and generative AI are boosting efficiency while companies maintain human touch where necessary.

The report evaluates 33 providers across four quadrants, naming several as Leaders in various categories.

Positive

• ISG report identifies growing adoption of data-driven strategies and cloud services in retail and CPG sectors
• Companies implementing AI-powered customer data platforms for personalized experiences
• Extended reality (XR) technologies being used for innovative shopping experiences
• Automation and generative AI boosting operational efficiency

Negative

• Fragmented data privacy laws in the U.S. creating regulatory challenges for companies
• Changing consumer behavior and evolving mix of online and brick-and-mortar outlets causing market uncertainty
• Increasing regulation on sustainability measures requiring new tracking and reporting tools

Market Research Analyst

The retail and CPG landscape is undergoing significant transformation, driven by evolving consumer demands and technological advancements. This shift presents both opportunities and challenges for industry players. Key trends include:

• Increased focus on data-driven strategies and cloud adoption for enhanced agility and cost savings
• Implementation of integrated inventory management and order fulfillment systems for seamless omnichannel experiences
• Adoption of customer data platforms leveraging AI for personalized recommendations
• Exploration of extended reality (XR) technologies for innovative shopping experiences

These developments indicate a positive outlook for tech-savvy retailers and CPG companies that can adapt quickly. However, challenges such as data privacy regulations and the need for workforce upskilling may pose short-term hurdles. The industry's embrace of automation and GenAI suggests a long-term shift towards more efficient operations, potentially reshaping the competitive landscape.

Tech Expert

The technological transformation in retail and CPG is accelerating, with cloud services and data analytics at the forefront. This shift is important for companies to remain competitive in an increasingly digital marketplace. Key technological advancements include:

• Cloud migration for scalability and cost optimization
• AI-powered customer data platforms for hyper-personalization
• AR/VR integration for enhanced shopping experiences
• Robotic process automation (RPA) for operational efficiency
• Generative AI exploration for various business applications

These technologies are not just enhancing customer experiences but also optimizing backend operations. The adoption of workforce management tools and learning management systems indicates a holistic approach to digital transformation, addressing both customer-facing and internal processes. This comprehensive tech integration positions forward-thinking companies for long-term success in the evolving retail landscape.

Legal Expert

The retail and CPG sectors are facing a complex regulatory landscape, particularly in data privacy and sustainability. Key legal considerations include:

• Anticipated consolidation of fragmented U.S. data privacy laws into stronger national regulations
• Increasing focus on data governance and management to ensure compliance
• Evolving labor regulations necessitating adaptive workforce management strategies
• Growing sustainability regulations, particularly in waste reduction and eco-friendly packaging

These regulatory changes are driving companies to invest in data governance platforms and management services from trusted providers. The trend towards stricter regulations may initially pose challenges, but it also creates opportunities for companies to differentiate themselves through robust compliance measures and sustainable practices. Long-term, this regulatory evolution could lead to a more transparent and environmentally responsible retail and CPG industry, potentially benefiting companies that proactively adapt to these changes.

Providers help stores and consumer brands satisfy customers online and in person

with enhanced, personalized experiences, ISG Provider Lens™ report says

STAMFORD, Conn.--(BUSINESS WIRE)-- Retail and consumer packaged goods (CPG) companies in the U.S. are recognizing the need to keep evolving in response to growing and shifting consumer demands, new technologies and increasing regulation, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

The 2024 ISG Provider Lens™ Retail & CPG Services report for the U.S. finds competitiveness in these industries requires data-enabled agility and being able to keep both customers and employees happy. With the growth of e-commerce, customers of every brand consistently find new, competing options online.

“Retail and consumer products companies are finding that comprehensive, customer-centric strategies are essential,” said Sunder Pillai, ISG Retail & CPG practice leader. “They are partnering with providers to plan and execute these strategies while controlling costs.”

Following pandemic-era disruptions, the mix of online and brick-and-mortar outlets continues to change and consumer behavior is still evolving, the report says. Companies need more data, with better analysis, to accurately monitor and predict demand and inventory and personalize customer experiences. Changing business requirements are driving companies to the cloud for both scale and cost savings.

To meet consumer demands for seamless experiences spanning online and in-store shopping, U.S. retail and CPG firms are adopting integrated inventory management and order fulfillment systems, ISG says. They are also implementing customer data platforms that combine multiple data sources and use AI to make recommendations. With help from extended reality (XR) consultants, brands are using AR and VR for digital-plus-reality experiences—for instance, virtually trying on clothing.

Fragmented data privacy laws in the U.S. are expected to cohere into stronger national regulations on data collection, storage and use, the report says. Enterprises are responding by adopting data governance platforms and management services from trusted providers. As labor regulations change, some are also using workforce management platforms to help them adapt. Increasing regulation of sustainability measures, such as waste reduction and eco-friendly packaging, are increasing the use of tracking and reporting tools.

Automation is boosting the efficiency of retail and CPG operations through tools such as robotic warehouse assistants and generative AI (GenAI), but companies are taking steps to maintain the human touch where necessary, ISG says. With learning management systems, some are helping employees develop skills for the new environment.

“GenAI is part of every conversation about the future of retail,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “Companies seek providers to help them determine how GenAI will ultimately benefit their business.”

The report also explores other trends in the U.S. retail and CPG industry, including the rising use of robotic process automation (RPA) and the growing importance of workforce management tools for optimal employee scheduling.

For more insights into the challenges facing U.S. retail and CPG companies, including transforming business practices for continuous improvement and ensuring responsible sourcing, plus ISG’s advice on solving them, see the ISG Provider Lens™ Focal Points briefing here.

The 2024 ISG Provider Lens™ Retail & CPG Services report for the U.S. evaluates the capabilities of 33 providers across four quadrants: Business Transformation Services, Digital Innovation Services, Platform Modernization Services and Managed Services.

The report names Accenture, Capgemini, Cognizant, Deloitte, HCLTech, Infosys, KPMG, TCS and Wipro as Leaders in all four quadrants. It names IBM and Kyndryl as Leaders in two quadrants. LTIMindtree is named as a Leader in one quadrant.

In addition, LTIMindtree is named as a Rising Star — a company with a “promising portfolio” and “high future potential” by ISG’s definition — in three quadrants. UST is named as a Rising Star in two quadrants. Genpact and Sutherland are named as Rising Stars in one quadrant each.

In the area of customer experience, HCLTech is named the global ISG CX Star Performer for 2024 among Retail & CPG Services providers. HCLTech earned the highest customer satisfaction scores in ISG's Voice of the Customer survey, part of the ISG Star of Excellence™ program, the premier quality recognition for the technology and business services industry.

The 2024 ISG Provider Lens™ Retail & CPG Services report for the U.S. is available to subscribers or for one-time purchase on this webpage.

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 Europe, as well as in the U.S., Canada, Mexico, Brazil, the U.K., France, Benelux, Germany, Switzerland, the Nordics, Australia and Singapore/Malaysia, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.

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 AI and 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 Stamford, Conn., ISG employs more than 1,600 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240903803346/en/

Press Contacts:



Will Thoretz, ISG

+1 203 517 3119

will.thoretz@isg-one.com



Julianna Sheridan, Matter Communications for ISG

+1 978-518-4520

isg@matternow.com

Source: Information Services Group, Inc.

FAQ

What are the key trends in U.S. retail and CPG industries according to the ISG Provider Lens™ report?

Key trends include adoption of data-driven strategies, cloud services, integrated inventory management, AI-powered customer data platforms, extended reality technologies, and preparation for stricter data privacy regulations.

How are U.S. retailers adapting to changing consumer demands?

Retailers are implementing integrated inventory management and order fulfillment systems, adopting AI-powered customer data platforms, and using extended reality (XR) technologies to create seamless online and in-store shopping experiences.

What role does automation play in the retail and CPG sectors?

Automation, including robotic warehouse assistants and generative AI, is boosting operational efficiency. Companies are also using learning management systems to help employees develop skills for the new environment.

How are companies preparing for data privacy regulations in the U.S.?

Companies are adopting data governance platforms and management services from trusted providers to prepare for expected stronger national regulations on data collection, storage, and use.

Which companies were named Leaders in the ISG Provider Lens™ Retail & CPG Services report?

Accenture, Capgemini, Cognizant, Deloitte, HCLTech, Infosys, KPMG, TCS, and Wipro were named Leaders in all four quadrants. IBM, Kyndryl, and LTIMindtree were also named Leaders in various quadrants.