Retail

Why Microsoft Now for Retail + CPG

In 2026, the Retail and Consumer Packaged Goods (CPG) sectors are navigating a post-pandemic landscape. This environment is marked by:

• Ongoing inflation affecting consumer spending
• Supply chain instability
• High omnichannel customer expectations
• A generational shift in retail technology platforms

Legacy Point of Sale (POS) systems are nearing their end-of-life. These include NCR, Oracle Retail Xstore, Aptos, and Tomax. Traditional retail ERP systems are also reaching their limits. Key examples are:

• SAP Retail
• Oracle Retail Suite
• JDA / Blue Yonder
• Manhattan Associates

At the same time, businesses must focus on:

• AI-driven customer service
• Personalization
• Store associate productivity

These elements are essential for staying competitive.

Microsoft's retail stack includes:

• Dynamics 365 Commerce (POS + MPOS + e-commerce + customer service)
• Microsoft Cloud for Retail
• Microsoft Fabric for omnichannel customer data lakes
• M365 Copilot + Copilot Studio agents for store + corporate productivity
• Microsoft Defender for retail-specific cybersecurity (PCI DSS + customer data protection)

This stack is the most complete cloud solution for the retail sector. EPC Group's retail + CPG practice has delivered projects across various areas, including:

• Multi-banner retailers
• Specialty retail
• Grocery
• Foodservice
• Consumer durables
• CPG manufacturers (food + beverage + consumer products + apparel)

Dynamics 365 Commerce — Unified POS + E-commerce + B2B

Dynamics 365 Commerce brings together various retail functions into one platform. This includes:

• Physical retail POS
• Mobile POS
• E-commerce storefronts
• Customer service
• B2B sales
• Clienteling
• Loyalty programs
• Gift cards
• Retail finance

All these features include product, customer, order, inventory, and pricing models. EPC Group has successfully migrated D365 Commerce from old POS systems for:

• Multi-banner retailers
• Specialty retail
• Grocery stores

The migration pattern involves a phased rollout by banner or store group, along with a parallel operation period. Data migration includes:

• Products
• Customers
• Orders
• Loyalty members
• Gift card balances
• Store hierarchy, assortment, and pricing

Integration is necessary with:

• Payment processors (PCI-tokenized)
• Tax engines (Vertex, Avalara)
• Order management
• Warehouse management
• Customer service platforms

This can be standalone or integrated with the full D365 Finance + SCM stack, depending on the retailer's broader ERP strategy.

Microsoft Cloud for Retail — Industry Accelerators

Microsoft Cloud for Retail (MCfR) combines M365 + D365 + Power Platform + Azure with retail-specific accelerators:

Store operations agent. The Copilot Studio agent uses store operations manuals, procedures, policies, and product knowledge. It has a mobile-first interface that is designed for store associates. Additionally, it supports multiple languages.

Additionally, it integrates with workforce management systems to provide context for shifts and tasks.

Real-time inventory. Unified inventory visibility across store + DC + in-transit + supplier. Available-to-promise calculation across the network. Customer-facing inventory visibility on storefront + service center.

Customer engagement personalization. Microsoft Dynamics 365 Customer Insights for unified customer profile + segmentation + journey orchestration. Real-time personalization on storefront + email + mobile app + in-store.

Supply chain visibility. Multi-tier supplier + in-transit + DC + store visibility. Exception management for delays + quality issues. Supplier scorecard + collaboration.

Sustainability. Microsoft Sustainability Manager for emissions tracking, product sustainability reporting, supplier sustainability data collection.

Microsoft Fabric for Omnichannel Customer Data Lakes

Microsoft Fabric consolidates various tools into one platform. It replaces the fragmented Customer Data Platform (CDP), retail data warehouse, e-commerce analytics, email marketing analytics, and loyalty analytics stacks.

EPC Group has successfully migrated retailers and CPG manufacturers from:

• Snowflake
• Teradata
• Adobe Analytics
• Google Analytics 360
• Segment

to Microsoft Fabric.

The reference architecture:

Ingestion. We gather data from various sources, including:

• POS transactions
• E-commerce sessions and orders
• Loyalty enrollment and redemption
• Email engagement
• Mobile app engagement
• Customer service interactions
• Social engagement
• In-store WiFi and beacon data
• Third-party demographic and behavioral data

Storage. OneLake with medallion architecture. Unified customer profile in gold tier with reconciled identifiers (loyalty ID, email, mobile device, payment instrument, household).

Compute. Fabric Lakehouse + Warehouse + Real-Time Analytics for different workloads. Customer 360 + segmentation in Warehouse + Power BI semantic models. Real-time personalization decisions in Real-Time Analytics + Stream Processing.

Activation. Customer Insights for journey orchestration + outbound activation. Power BI + Customer Insights Data for self-service segmentation by merchants + marketers.

M365 Copilot + Copilot Studio Agents for Retail

EPC Group's high-impact Copilot patterns for retail + CPG:

Store associate (mobile-first). This role includes several key responsibilities:

• Providing customer help, such as product information and inventory checks.
• Assisting with store-to-store transfers and ship-from-store services.
• Processing returns and enrolling customers in loyalty programs.
• Engaging in clienteling to enhance customer relationships.

A critical capability is a low-friction mobile interface that can be used during customer interactions, allowing associates to operate away from a desk.

Customer service first-line. The Copilot Studio agent operates on the storefront, customer portal, and customer service queues. It manages:

• Order status
• Return policy
• Store hours
• Product availability
• Loyalty balance
• Simple troubleshooting

For complex issues, it escalates to a live agent. EPC Group has deployed customer service agents that handle 60-80% of first-line interactions at multi-banner retailers.

Merchandising + category management. Copilot for merchants analyzing category performance, drafting buyer notes + supplier correspondence, generating ad copy + product descriptions.

Supply chain + planning. Demand forecast review + adjustment, exception management correspondence, supplier negotiation prep, supply chain narrative for executive reporting.

Marketing. Email + creative + ad copy drafting, campaign brief generation, marketing analytics narrative, customer-facing content drafting with brand-tone alignment.

Power BI for Category + Merchandising + Supply Chain

EPC Group's high-impact Power BI patterns for retail + CPG:

Category. Category P&L, SKU + brand performance, assortment effectiveness, space-to-sales productivity, private label vs national brand, new item tracking, end-of-life management.

Merchandising. Sell-through, sell-thru % at price point, markdown effectiveness, promotional lift, regular vs promotional vs clearance mix, gross margin protection.

Supply chain. In-stock rates by store + SKU + tier, days of supply, supplier OTIF, replenishment effectiveness, exception management, transportation cost per unit.

Stores. Store P&L, comp sales, traffic + conversion + average ticket, basket affinity, store benchmarking, labor productivity, shrink.

E-commerce + omnichannel. Session + conversion + AOV + cart abandonment, channel attribution, cross-channel customer behavior, fulfillment cost by method, BOPIS / ship-from-store / direct-from-DC mix.

Customer. Customer 360, CLV, RFM segmentation, churn risk, segment migration, loyalty program performance, household-level analytics.

PCI DSS + Retail Cybersecurity

Retail cybersecurity involves two key areas beyond standard enterprise security. These are PCI DSS payment data protection and customer data protection, which includes state privacy laws and GDPR for international compliance. EPC Group's retail cybersecurity reference architecture addresses these needs:

• PCI DSS payment data protection
• Customer data protection (state privacy laws, GDPR)

PCI DSS payment data. D365 Commerce and Azure offer PCI DSS Level 1 certified payment processing. This includes tokenized payment data for added security.

Key features include:

• Cardholder data environment (CDE) segmentation through Azure network controls
• Conditional Access for enhanced security
• Microsoft Purview Information Protection for data management

Annual support for PCI DSS attestation is also provided.

Customer data protection. Microsoft Purview Information Protection provides sensitivity labels for customer PII. It includes DLP across:

• Email
• Teams
• SharePoint
• Copilot

This solution ensures compliance with state privacy laws, including CCPA, CPRA, Virginia VCDPA, and Connecticut CTDPA, as well as GDPR for international operations.

Retail-specific threats. Card-skimming (Magecart) protection via Microsoft Defender for Cloud + Defender for App Service. Point-of-sale malware protection. Insider risk for high-value inventory + cash environments.

Store + back-of-house. Microsoft Intune manages devices in stores. Defender for Endpoint protects computers and terminals in the back office. Defender for IoT secures in-store IoT devices, which include:

• Smart shelves
• Connected cameras
• Point-of-sale systems

• Smart shelves
• Security cameras
• Point-of-sale systems

• Digital signage
• Beacons
• Cameras
• IoT-enabled refrigeration

Engagement Operating Model — Retail + CPG Application

The 7-phase Engagement Operating Model (at /engagement-model) applied to retail + CPG:

Discover. The landscape includes:

• POS systems
• E-commerce solutions
• ERP systems
• WMS platforms
• Customer service platforms
• Banner, store, and DC inventory
• Supplier inventory
• Omnichannel maturity
• Customer data fragmentation
• Current Microsoft tenant
• PCI DSS posture
• State privacy and GDPR posture

Architect. D365 Commerce reference architecture, Microsoft Cloud for Retail scenario selection, Fabric customer data platform architecture, Copilot governance design, Defender + Sentinel SOC architecture with PCI + privacy overlays.

Plan + Build + Validate + Deploy + Run per standard EOM with retail-specific milestones (holiday peak season alignment, fiscal year + quarter cadence, store renovation + opening cycles).

Engagement Investment

EPC Group retail + CPG engagement tiers:

Foundation ($175K-$350K, 14-20 weeks): D365 Commerce single-banner pilot OR Power BI deployment OR Customer Data Platform pilot OR Copilot Studio customer service agent.

Enterprise ($450K-$1M, 26-44 weeks): Multi-banner D365 Commerce + Fabric customer data platform + Copilot + EOM full lifecycle.

Platform ($1M-$3M, 44-72 weeks): Enterprise + Microsoft Cloud for Retail full + Center of Excellence + multi-region + sustainability reporting.

Ongoing operations via /managed-microsoft-support-tiers — 24x7x365 tier appropriate for retail operations including holiday peak.