While many organizations plan to increase their analytic software investments in 2022, retail and consumer goods companies are falling behind other industries. Only a third of retail organizations and half of CGs plan to upgrade their analytics investments. While these industries have become masters at navigating disruption, it’s not pandemics or dire market conditions that threaten their success today — it’s internal analytic processes and infrastructures.
RIS and CGT’s annual “Retail and Consumer Goods Analytics Study,” sponsored by Alteryx, examines these two industries through a critical lens, benchmarking their analytics maturity and identifying key trends in their analytics investments. Read on to view the highlights.
Top areas of focus
Source: A Future Redefined 2022 Retail And Consumer Goods Analytics Study, CGT & RIS
61% of CGs report demand forecasting is a top area of analytics focus.
— A Future Redefined 2022 Retail And Consumer Goods Analytics Study, CGT & RIS
Machine learning and AI are unmatched in their ability to analyze massive amounts of data at scale. So it’s no surprise that these technologies have become irreplaceable for retail and CG companies. Both retail (40%) and consumer goods (61%) cite demand forecasting as their greatest analytics focus with inventory planning (40%) equally weighted as a principal focus in retail. But this emphasis on the future comes at a cost — the right talent. The surging demand for data scientists has stymied retail and consumer goods companies in their analytics strategies, but the talent shortage is not the only factor at play.
Top analytic challenges
Source: A Future Redefined 2022 Retail And Consumer Goods Analytics Study, CGT & RIS
48% of retailers say not having the right staff is a major barrier to analytic success.
— A Future Redefined 2022 Retail And Consumer Goods Analytics Study, CGT & RIS
Retail (48%) and consumer goods (42%) both cite not having the right staff in place as one of their most significant challenges. But this may just be a symptom rather than the cause. Both organizations cite the lack of an articulated analytics strategy. Other key challenges, such as company culture and budget, could experience a drastic improvement if leadership found effective ways to implement their analytics vision.
Software changes over the next 12 months
Source: A Future Redefined 2022 Retail And Consumer Goods Analytics Study, CGT & RIS
While most retailers and CGs have few plans to bolster their analytics abilities, a third of retailers and around half of CGs are planning major changes to their analytics software over the next 12 months. Retailers plan to upgrade their investments in several key areas, including data visualization, data storage, data security, and web/online analytics. In contrast, around half of CGs plan to upgrade their analytics software in BI & reporting, data security, data visualization, and data management.
Organizational structure
Source: A Future Redefined 2022 Retail And Consumer Goods Analytics Study, CGT & RIS
Many CGs (31%) report having a shared analytics department or center for excellence — a structure most respondents agree is ideal for business analytics. In comparison, 42% of retail organizations have business analytics managed at the department level (many spokes) instead of a shared analytic department. This internal structure is perhaps one of the most significant contributing factors to retailers’ lacking self-evaluations.
How do you fare against the competition?
Respondents ranked themselves against direct competitors and industry leaders — like Amazon and Unilever — in several areas of analytics maturity, including data management, analytic tools, personnel, and more.
Against their direct competition, 45% of retailers ranked themselves as lagging in analytics tools, indicating that they believe their peers are discovering the right solutions while they are not. But overall, they ranked themselves at par or better in most categories.
38% of retailers report their analytic skills/personnel are lacking compared to competitors.
— A Future Redefined 2022 Retail And Consumer Goods Analytics Study, CGT & RIS
However, when asked how they compared to industry leaders, more than 50% of retailers ranked themselves as lagging, 25% as severely lagging. CGs rated themselves a bit above their direct competitors in several areas, but again, when compared to industry leaders, more than half of CGs rated themselves as either lagging or significantly lagging in every category explored in the study.
Retailers will need to consciously and continually address each of the major challenges cited in this report to make inroads in their analytics strategies. You can read the full report to learn more or take our analytics maturity assessment to see where your organization ranks in its maturity and accelerate your journey.
Read the full report from RIS and CGT.