As highlighted during Baufest's virtual event reviewing sector trends— Baufest Consumer Products & Retail Trends 2022,—these industries have demonstrated operational resilience in recent times while undergoing deep transformations shaped by the convergence of physical and digital experiences.
Alejandro Florean Rodríguez, VP of Research and Consulting at IDC Latin America, noted that retailers and CPG companies today "are under constant pressure to transform and optimize, compounded by supply chain disruptions and product availability issues. Furthermore, retailers face new forms of competition as some manufacturers adopt direct-to-consumer (D2C) models."
In these sectors, emerging technologies—such as Artificial Intelligence (AI), Machine Learning (ML), the Internet of Things (IoT), and the metaverse—are making a significant impact. IDC data indicates that AI and ML use cases in Latin America are growing at a rate of 150% every six months.
Three Key Areas
In their drive to optimize the customer experience and achieve operational excellence, retailers and consumer goods companies "face major challenges across three core areas that will exert significant pressure in the coming months," Alejandro highlighted. These three areas are:
- E-commerce: Companies must implement modern, next-generation platforms. IDC's latest survey revealed that few organizations possess an e-commerce platform integrated with other core systems that can quickly deploy new services.
- Customer Experience: Companies must leverage emerging technologies to build innovative experiences that foster brand loyalty.
- Supply Chain: Organizations need to modernize their supply chains technologically and integrate relevant new use cases.
Florean Rodríguez shared two IDC forecasts: by 2024, shared customer data centers will supply at least 25% of the customer data used to drive personalized experiences and enhance merchandising. By 2026, 90% of the top 2,000 retailers will use edge computing to capitalize on in-store data growth, boosting workforce productivity and customer experience.
Furthermore, as connected physical stores increasingly adopt self-service technologies, Florean Rodríguez noted that around 20% of retailers in Latin America have already deployed (or are deploying) self-checkout systems.
Experiences and Priorities
Karina Cáseres, IT & Data Director for Danone Southern Cone, emphasized that CPG companies have recently navigated dramatic and continuous shifts in consumer preferences. Today's consumers demand fast, convenient, and personalized service in a landscape where the shift toward digital has accelerated rapidly.
In this environment, organizations "must reinvent their brand value and supply chains while putting consumer experience at the center of their business strategy," noted Danone's CIO. "AI, Big Data, automation, and e-commerce platforms will be the primary technologies driving this transformation. I would also add planning tools; however, we must keep in mind that a digital ecosystem requires a robust architecture. Defining an integration and development strategy with the right tools to quickly deploy scalable and sustainable applications and services is essential."
Melissa Combe, Digital Transformation Director at Alicorp, highlighted two major challenges facing CPG companies: first, building a digital platform strategy across the entire value chain that incorporates AI and ML to deliver personalized services, tailored experiences, and predictive capabilities; and second, developing human talent strategies. "The challenge is not only attracting and retaining the right talent, but motivating employees so they feel proud to belong," Combe stressed.
Regarding talent development, Cáseres added: "The goal is to build capabilities within business units so team members understand data management and governance, equipping them with technical skills to eliminate the traditional barrier between technology and business."
To learn more about the trends discussed during Baufest's virtual event, we invite you to watch Baufest Consumer Products & Retail Trends 2022.