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

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.