Software is disrupting and transforming every industry, and the impact is particularly pronounced in consumer-facing organizations. With the rise of the direct-to-consumer model, revenue increasingly comes from online rather than traditional channels. More than 500 million people interact with the Nike brand across its apps. The Starbucks app is the second-most-popular mobile payment platform in the United States for point-of-sale transactions, trailing only Apple. As digital experiences carry the weight of revenue, consumer-facing organizations have to make effective digital investments.
While technology has already revolutionized this sector, not least with the advent and mass adoption of e-commerce, the next wave of transformation is imminent. Customers increasingly expect experiences powered by software and on par with those offered or enabled by the most successful software and tech players. Building a shopping app, for instance, no longer suffices; the experience needs to be as engaging and seamless as it would be if app delivery were the organization’s core competency.
Investing wisely in software across the entire value chain, from initial customer interactions to internal corporate functions, can help consumer packaged goods (CPG) and retail companies meet these rising expectations. And that investment can pay off in the long run. With technology increasingly a competitive differentiator, companies that make software a core part of their organization and harness emerging technologies—such as AI (including generative AI), mixed reality, and robotics—can lay a strong foundation for sustainable growth.
Many retail and consumer players recognize this reality and have already made decisive software and technology investments. For example, Starbucks developed Deep Brew, a tool to leverage AI for various applications. Lego partnered with Epic Games to create a metaverse for kids to connect, playing between digital and physical worlds seamlessly. And L’Oréal invested in Digital Village—a virtual world-building platform and nonfungible token (NFT) marketplace—to bet on