AI Expansion Projects Likely to Surge in CPG: IBM
Retail and CPG executives expect to expand their use of AI throughout all areas of their business next year, according to a global study from the IBM Institute of Business Value, Embedding AI in Your Brand’s DNA, which reports spending on the technology outside of IT operations could increase by 52%.
IBM worked with Oxford Economics to survey 1,500 executives across 15 countries in Q3 2024 and found that 81% of the respondents and 96% of their teams are already moderately or significantly using AI. While adaptation is already quite high, executives believe that 31% of employees will need to learn new skills in order to work with AI next year and that 45% will require additional training within the next three years.
The surveyed companies said they expect to allocate an average of 3.32% of their revenue to artificial intelligence this year, using the technology in marketing, talent acquisition, supply chain operations, and customer service. That last function could increase by 236% within the next 12 months as companies seek to use it to give customers personalized responses.
Investing Is a ‘Strategic Imperative’
Employees will be key to making sure this tech is implemented well, with respondents predicting that 50% of customer service activities will be augmented by AI while 35% will be automated. Executives should make their plans clear to reassure employees who are worried about being replaced.
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"AI is no longer just a tool; it's a strategic imperative," Dee Waddell, an IBM global industry leader in consumer, travel, and transportation industries, said in a statement. "Retail and consumer product companies are at a tipping point where embedding AI across their operations can help define not just productivity gains, but the future of brand relevance, engagement, and trust."
Executives also plan to work with their business partners to integrate AI capabilities, with the use of ecosystem platforms expected to increase from 52% to 89%. IBM’s research found that 65% of organizations are already working with a strategic partner to build large language models for AI initiatives.
However, companies need to put in the work to ensure that the technology is implemented responsibly. The potential for AI models to create misleading information was respondents’ top concern, with other major worries including privacy, bias, and transparency. While 87% of respondents said they have clear governance frameworks for AI, only 25% have fully implemented tools to manage these problems.
