Retail and CPG leaders are doubling down—HFS value chain now guides 90% of spend

Enterprise spending in retail and consumer goods isn’t scattered—it’s surgical. New HFS Horizons data confirms that 90% of IT and business services outsourcing spend maps to the eight domains of the HFS Retail and Consumer Goods value chain, with over 56% concentrated in just four areas.

Our value chain model is not a theoretical framework; it’s the real-world playbook that C-level leaders are funding today. The bulk of digital investment is aligned to core revenue-generating and supply chain activities. Leading the pack is the customer engagement and channels arena, closely followed by resilient operations, with enhanced customer support not far behind.

Exhibit 1: 90% of outsourcing spend now aligns to HFS’ eight strategic domains, with just four accounting for over half

Source: 35 RCG firms; HFS Horizons – Exploring the Future of Intelligent Retail and CPG Ecosystems, 2025

The strategic four: Where over half the money and momentum is concentrated

These top four areas dominate enterprise investment, accounting for 56% of all IT/business services spend across retail and CPG. Here’s why these areas matter and how leaders are acting on them:

1. Data-driven product innovation: Managed by the chief innovation officer, this single largest area of spend reflects the pressure to keep pace with evolving consumer expectations. Enterprises are compressing product development cycles with predictive analytics, digital twins, and agile R&D. For example, P&G dynamically adjusts product features and launch timing based on real-time social and e-commerce data insights, cutting delays and mismatches.
2. Omnichannel customer experience: Headed by the chief technology officer, this is about delivering a unified customer experience—consistent and seamless across physical, mobile, and multiple online channels. The spend is focused on e-commerce, customer identity platforms, and unified journey orchestration. For example, Nike has integrated digital engagement with in-store personalization and mobile loyalty programs to create a fluid, high-conversion customer journey.
3. Resilient operations: Led by the COO, legacy operations can’t keep up with volatility. Firms are modernizing store operations, manufacturing, and planning processes to drive agility and efficiency. For example, Target is deploying AI and robotics in-store and in backrooms to optimize fulfillment and real-time stock accuracy while enhancing labor productivity.
4. Immersive marketing and customer engagement: Led by the chief marketing officer, marketing isn’t a broadcast function anymore—it’s a data-rich, interactive experience. Enterprises are investing in AI-driven personalization, digital content, and immersive experiences. For example, Unilever leverages AR and AI in campaign activations, linking customer interactions directly with behavioral data to improve both reach and conversion.

Interestingly, a bulk of the spend is occurring beyond the purview of the CIO officer.

The other strategic four are essential enablers, not also-rans

The remaining four domains—intelligent supply chain and logistics (12%), enhanced customer support (10%), collaborative ecosystems (6%), and sustainable retail (5%)—still collectively command 34% of the total spend. They are essential, but mainly serve as enablers supporting the strategic core.

• Intelligent supply chains underpin resilient operations and personalized commerce.
• Enhanced customer support makes omnichannel engagement sustainable.
• Collaborative ecosystems provide access to digital talent, tools, and innovation.
• Sustainable retail embeds long-term purpose into short-term performance.

The takeaway is to not ignore them but integrate them. They amplify the impact of the strategic four.

Siloed innovation won’t cut it—integration is the true differentiator

What separates leaders from laggards isn’t just what they invest in—it’s how they integrate those investments. Walmart is an exemplary example in retail. The company has invested in customer-facing digital platforms and in supply chain optimization and, crucially, linked them together. Walmart’s strategy integrates its e-commerce and mobile channels with an efficient fulfillment engine, combining digital personalization with logistics densification. The result: same-day delivery coverage has skyrocketed, digital sales continue climbing, and operational costs per order have dropped. By tying online customer engagement to back-end fulfillment improvements, it turned what was once a costly e-commerce operation into a growth engine, reducing e-commerce losses by 80% in 2024.

On the consumer goods front, Unilever stands out for its enterprise-wide digital transformation that connects the dots across the value chain. The company introduced an integrated operations program (iOps) to leverage advanced analytics and technology in every facet of its business—from forecasting consumer demand to streamlining production and delivery. Its move to 100% cloud infrastructure and the deployment of 500+ AI projects are directly aimed at breaking silos between departments and creating one cohesive, data-driven value chain. For example, AI algorithms now link consumer trends with factory schedules and supplier logistics, enabling Unilever to adjust production in real time as demand signals change. This end-to-end approach has yielded significant cost savings in supply chain operations while ensuring popular products are always on shelf when and where customers want them.

The Bottom Line:  Enterprise leaders must dismantle siloed decision-making across departments and rewire their operating model around the eight elements of HFS’ value chain to drive real impact.

Audit your current initiatives and investments against the eight domains. Prioritize the top four, but execute as an integrated enterprise and not as fragmented functions. In practice, this means aligning teams and budgets across traditionally separate functions. Break down organizational silos so that your digital marketing, ecommerce, logistics, and product teams are working from the same playbook and shared data. The future is bright for those RCG firms that focus on the vital few and connect across the chain.