ISG’s 2025 report reveals how AI and advanced analytics are transforming retail/CPG, boosting efficiency, personalization, and profits.
Retail and consumer packaged goods (CPG) companies are transforming operations and gaining powerful new business tools using AI and advanced analytics, according to a new research report published today by Information Services Group (ISG), a global AI-centered technology research and advisory firm.
The 2025 ISG Provider Lens® global Specialty Analytics Services — Retail and CPG report finds that enterprises are starting to implement data-driven capabilities throughout their businesses, from product innovation to supply chain management, merchandising, sales and customer engagement. Service providers specializing in advanced retail and CPG analytics empower clients to innovate in several areas for increased efficiency and competitiveness.
“Retail and CPG are only beginning to scale up the most cutting-edge AI solutions, and the untapped potential is significant,” said Rajib Datta, partner at ISG. “ISG predicts comprehensive AI-powered transformation will substantially increase profit for companies that embrace it.”
Using advanced customer data platforms, AI and ML, retail and consumer brands are analyzing data such as consumers’ purchase histories and web and mobile behavior to refine customer segmentation and deliver personalized experiences, the report says. AI-enabled predictive analytics helps companies target promotions and product suggestions more accurately. AI is also allowing enterprises to optimize pricing based on factors including current demand and time of day, moving beyond intuition-based decisions.
Emerging digital tools are also helping companies predict demand and control inventory more accurately, ISG says. ML-powered demand models incorporate historical sales, weather, social media trends and other factors, including anomalies such as sudden sales spikes. Some grocery stores now use AI-powered shelf scanners to see when products are sold out and automatically order more. Better demand predictions allow for tighter inventory control and better management of supply chain-related functions, including procurement and logistics.
The report says retail and CPG companies are also starting to use generative AI and agentic AI for creative and analytical functions. Some are deploying GenAI models to automate the creation of social media content, personalized emails, and packaging mockups. GenAI is even helping companies create new product ideas. Forward-looking retailers are piloting AI agents to proactively update orders and reroute shipments on the fly as demand forecasts change.
ISG says specialist analytics providers are solving complex operational and customer analytics problems that traditional providers struggle to address. The specialists couple advanced AI and ML capabilities with deep retail and CPG expertise and strong partnerships with major cloud and data platform providers, taking a consultative approach to leading clients through end-to-end transformation.
“By collaborating with specialty analytics companies, retail and consumer brands acquire more than powerful solutions to current challenges,” said Manav Deep Sachdeva, senior manager and principal analyst, ISG Provider Lens Research, and report’s lead author. “They gain a trusted partner that can continue turning data into meaningful outcomes as technologies evolve.”
The report also explores other trends affecting retail and CPG companies, including the emergence of mobile AI assistants to help sales associates and algorithmic tools that forecast return on investment in promotions.
For more insights into the analytics challenges facing retail and CPG companies, plus ISG’s advice for addressing them, see the ISG Provider Lens® Focal Points briefing here.
The 2025 ISG Provider Lens® global Specialty Analytics Services — Retail and CPG report evaluates the capabilities of 21 providers in one quadrant: Retail and CPG.
The report names Fractal Analytics, HARMAN Digital Transformation Solutions, LatentView Analytics, Lingaro, MathCo, Tiger Analytics and Tredence as Leaders in the quadrant.
In addition, Sigmoid is named as a Rising Star — a company with a “promising portfolio” and “high future potential” by ISG’s definition.
