Providers help stores and consumer brands satisfy customers online and in person with enhanced, personalized experiences, ISG Provider Lens report says.
Retail and consumer packaged goods (CPG) companies in the US 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 by Information Services Group (ISG) – a leading global technology research and advisory firm.
The 2024 ISG Provider Lens Retail & CPG Services report for the US 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, US retail and CPG firms are adopting integrated inventory management and order fulfilment 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 US 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 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 US 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.
The 2024 ISG Provider Lens Retail & CPG Services report
The report for the US 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.
