Hakkoda’s 2024 State of Data Report, which includes a survey of retail and CPG organizations’ data strategies and goals, reveals an eagerness in the industry to harness the power of AI to drive decision-making.
Unfortunately, it also paints the picture of an industry hampered by a lack of internal AI skills and expertise, with many of these companies find themselves stalling out in a crucial phase of their data modernization journey, struggling to bridge talent gaps and build the AI capabilities they need to unlock the full potential of their data.
Like companies in any other industry, the majority of retail organizations expected to need significant external support to meet their data goals in 2024, with 88% of respondents indicating they would need a “moderate” to “large” amount of outside help. Enlisting help from data experts is an obvious solution to the limitations imposed by talent gaps and limited resources, and given that these companies already believe they have the infrastructure to ambitiously leverage AI, it’s a no-brainer to invest in support that can expedite their data modernization process.
Let’s look at the hard numbers to understand what the State of Data has to say about the retail industry. We’ll also look at how AI specifically figures into retail organizations’ plans to modernize in 2024 and beyond .
Retail and CPG’s AI Confidence Crisis: Infrastructure Ready, Skill Sets Lacking
Of all industries surveyed, retail organizations reported the lowest levels of confidence in their internal AI skills and expertise, with 77% of these companies expressing moderate to high levels of confidence compared to an average of 86% across all industries.
In keeping with this lack of confidence, 54% of these organizations cited applying AI to automate decision-making as a major challenge in 2024, outranking all other data challenges. Unsurprisingly, retail organizations were also subsequently the least likely to report improved decision-making as a benefit of their present data strategies at 26%, compared to a 44% average across industries.
These numbers paint a clear picture: retail organizations know they need to tap into AI’s innovative potential to drive decision-making at scale, but they lack confidence in their internal data teams’ ability to build the AI functions they need.
Luckily, most retail organizations appear to have data stacks that are ready to incorporate AI, with industry leaders reporting above-average optimism in their infrastructure. 86% of retail companies reported that they had infrastructure suitable for AI workloads, compared to an 83% average. Retail organizations were also significantly more likely to report that they were extremely efficient and scalable when it came to maintaining data stores and pathways compared to other industries.
External Data Support Bridges the Gaps for Retail Organizations Ready to Innovate
An intent to enlist external data experts to help realize organizational data goals was a common trend across industries, with 98% of organizations reporting that they would need outside data help in 2024. Still, retail organizations managed to stand out from the crowd, with 100% of these companies expected to need external data support this year and 75% projected to need moderate to large amounts of outside help.
It’s a natural solution for companies that have AI-ready infrastructure but lack the internal
expertise they need to build powerful AI functions. Outside data experts can step in and build the AI functions the organization needs, training in-house data teams to maintain these functions sustainably and coaching the organization on hiring practices that will support these functions, all while expediting the organization’s path to AI-driven decision-making.
This approach also keeps the organization agile, avoiding the need to tie up internal resources in complex and ambitious development projects. Timelines are expedited, which means a faster and more robust ROI on development investments—a consistent area of strength across industries, with organizations reporting an average ROI of 126% on their data tech investments.
This approach could also pave the way for retail organizations to reach the gold standard for data maturity and innovation: data monetization. Currently, retail companies trail behind all other industries in reported rates of data monetization, sitting at just 26% compared to an average of 44% across industries. External experts can help bridge this gap quickly and competently, setting retail organizations on the path to a truly modern data stack where organizational data can passively generate revenue all on its own.
How Hakkōda Helps Our Partners Build Innovative, AI-Driven Data Platforms
2024 has been the year of data modernization for so many organizations, and harnessing transformative AI functions to drive strategy remains a key step in that process for companies in any industry. Retail is not an exception in its need to leverage external support to unlock the potential of AI, but the challenges these organizations face have the benefit of being uniquely clear cut.
If your retail organization is looking to enlist external data support to realize your data goals this year and beyond, Hakkoda’s Snowflake-certified experts are experienced in working with retail partners and can build powerful AI functions that will revolutionize your organizational strategies and empower your decision-makers with the best, most up-to-date data possible. The process can be as fast as it is transformative, and with our collaborative approach to consulting, you’ll be set up with an innovative data stack that’s built to scale and catered to your organization’s unique needs and goals.
Let’s talk today about how Hakkoda can help you take control of your data modernization journey.
