A new Capgemini report finds that "data masters" gain a competitive advantage and achieve sustainability goals, but that skills gaps and data silos still need to be addressed.
Strong data maturity is helping 62% of consumer products and retail organizations become "data masters" and achieve scale with their AI and analytics proofs of concept, a new report finds. Further, 73% derive quantifiable business value from their data, according to a new report from Capgemini Research Institute.
The companies that can create, process and leverage data proactively to fulfill their corporate purpose, achieve their business objectives and drive innovation experience 30% higher operating profit margins than the industry average, the report said.
"Consumers are demanding greater personalization and seamless omnichannel experiences while asking for better control and awareness of their data,'' the report said. "They also have diverging needs; at times they may need convenience, at other times they look for deeper indulgence. Whatever the driver, they still expect a consistent experience across all channels."
SEE: The best luggage for business trips as offices reopen and travel picks up (TechRepublic)
Companies are also challenged with the phase-out of third-party cookies that contain information about consumers' online activity, according to the report.
In the CPR sector, data masters are few and far between, the report said. "In fact, CPR organizations lag behind the overall cross-industry average in several key aspects of data maturity." Only 16% of consumer product (CP) organizations qualify as data masters, in line with the cross-industry average of data masters, but only 6% of retail organizations clear the benchmark. These leaders show the way forward for the industry to tackle challenges in achieving data mastery.
A more telling finding was that CPR data masters enjoy 30% higher operating profit margins compared to the industry average, according to the report. They do so by implementing better data hygiene or superior data management practices–such as automating data collection, combining external data for analysis and considering data quality from design, among others.
Data masters are also able to work through key obstacles faced by most CPR organizations. They are able to spot gaps in their data and quickly make changes when required by having full visibility of both consumers and operations, the report said. This lens is more acute for retailers that are at the forefront of consumer interaction.
"There's clear evidence that in today's fast-changing environment, being data powered is fundamental to the success of consumer product and retail organizations,'' said Tim Bridges, global head of consumer goods and retail at Capgemini, in a statement. "As competitive intensity increases both from within and outside the sector, companies need to foster a culture that enables them to gain insight and act fast.''
CPR organizations also need to modernize their data platforms, strengthen trust and empower data-driven decision-making to progress toward data mastery and drive sustainable competitive edge, Bridges said.
Enhancing sustainability initiatives through data
Leading CPR organizations are using data and analytics to implement circular economy business models as 79% of consumers pivot services. Another 77% of organizations said sustainability approaches increased consumer loyalty and 63% of respondents said it led to increased revenue.
The report highlights data and analytics as pivotal sustainability enablers. Close to half of the organizations (47%) surveyed by the CRI are investing in AI, machine learning and Industrial Internet of Things (IIoT) sensors to drive their sustainability goals.
"It's not enough to simply react to change; consumer product and retail organizations need to sense changes in consumer behavior before they emerge as trends,'' said Benjamin Alleau, group sustainability offer lead, business technology practice at Capgemini Invent, in a statement. "This is particularly relevant when it comes to sustainability. We're seeing data masters optimize their data insights to challenge traditional ways of working in favor of circular economy business models – from supply chains and logistics to manufacturing and product lifecycle."
Overcoming data obstacles to become future-ready
The report reveals a variety of challenges standing in the way of CPR organizations on the road to data mastery. The most prevalent include data silos, a skills shortage and a lack of trust.
Functionality and integration were found to be the most critical obstacles, with most CPR organizations (57%) stating they are still trying to work around legacy systems that innately prevent the use of automation and AI, according to the report.
CPR companies trail behind other sectors in data-powered decision-making. They are 31% less likely to use data in their decisions when compared with banking businesses, and over 10% less likely compared with life sciences and healthcare organizations.
For CPR organizations looking to unlock business value from their data, the report recommends four focus areas:
1. Foster a data-powered culture and empower teams with data at the point of need.
2. Modernize the data platform for faster implementation of insights.
3. Strengthen trust in data with the right data governance and data ethics.
4. Plug into external data ecosystems to enable new business models and deeply understand consumers and operations.
The CRI said it studied over 200 CPR organizations to explore their data maturity, practices and behaviors.
- How to become a data scientist: A cheat sheet (TechRepublic)
- Top 5 programming languages data admins should know (free PDF) (TechRepublic)
- Data encryption policy (TechRepublic Premium)
- Volume, velocity, and variety: Understanding the three V's of big data (ZDNet)
- Big Data: More must-read coverage (TechRepublic on Flipboard)