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Digital Investments Drive Growth for Top Consumer Goods Companies

Jennifer Guhl
data
Twenty-five percent of consumer goods companies are currently exploring AI-led innovation.

Advanced technology is proving to be a difference maker among consumer goods companies, as evidenced by a recent study from Bain & Company. The research found that companies that significantly increased their technology investments over the past five years outperformed their peers regarding share price, revenue, and profit growth. 

The study, which analyzed 80 consumer products companies, also revealed that 25% of consumer goods companies are currently exploring AI-led innovation, design, and modeling, while 50% are implementing or testing a next-generation, data-driven perfect sales execution. 

“In many ways, this new wave of tech, aimed at delivering a competitive advantage in critical digital capabilities such as sales, marketing, and innovation, is the trickiest but the most important in predicting a consumer product company’s fate,” said Rajesh Narayan, a partner in Bain & Company’s consumer products and enterprise technology practices. “Leading companies will need to develop a digital roadmap, enhance existing technology capabilities, and modernize their core systems if they want a shot at thriving in this competitive landscape.”

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Leading companies were found to spend 60% more of their revenue on innovation, consumer, and customer services than their lower-performing counterparts, using AI technology to support everything from pricing optimization to predictive revenue growth management.

Gaps in talent and restrictions within the operating model can stifle digital transformation, so the top quartile of companies surveyed expanded their tech teams three times faster than the bottom quartile companies. Even among the leading companies, only half achieved 80% of their digital transformation project target, showing that outperforming through digital advantages can still be challenging.

Bain & Company suggests that companies focus on five key imperatives to take advantage of the new wave of digitalization. These include using AI to improve decision-making, establishing personalized two-way touchpoints, utilizing generative AI and digital twins to achieve hyper-efficiency and agility, creating a real-time transparent data river, and aligning foundations to scale quickly.

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