The Future of Intelligence: How AI is Reshaping the CG Industry

First standardization, followed swiftly by automation, and now the era of intelligence. Today, AI is regarded as the next big thing in CPG technology. It offers better insights, the ability to predict consumer behavior like never before and, ultimately, a stronger brand image through enhanced personalization.

AI is not necessarily new to CPG: although some companies are now making their first forays into the technology, a number have been using AI tools like marketing automation software for a while. Yet many CPG companies are unsure about what the impact of AI on their businesses will be.

So, where’s the value in AI for CPG companies today?

In our view, the value comes in the sheer breadth of applications for AI across the CPG space. It can help to provide deeper insights across a huge number of areas, helping both to speed decision making and make it more impactful. It also has the potential to predict consumer preferences and enable new business models. The uses for AI stretch across the entire CPG value chain. If implemented well, AI could prove revolutionary.

Managing Frozen Assets
AI excels at unlocking the hidden value of data, transforming the relationship between man and machine. By taking data held within the business – such as that gathered by the Internet of Things and ERP software – and working to unlock the valuable insight that data holds, AI has the potential not only to help humans manage systems, but to reimagine business processes and models.

There are, for example, millions of vending machines, kiosks and freezer cabinets in the U.S. alone. We envision a future where CPG companies not only monitor location and inventory from these ‘connected’ assets through the Internet of Things, but using AI tools, take the data being gathered and present real time updates on stock outages in critical locations, or monitor products and flag when they are not being displayed correctly. AI can provide asset owners with predictive maintenance schedules, collating data across thousands of cabinets to forecast when units will need repairing or replacing. Deploying predictive analytics can reduce maintenance costs by 30 percent and breakdowns by up to 70 percent, according to Accenture research. 

This Ad is Just for You
AI can take unstructured, social media data and use it to drive new insights into consumer behavior. Adding in data from other sources, AI can take personalized experiences to the next level, based on personal situation, location and views. Personalized advertising means consumers won’t be bombarded with unwanted advertising, simultaneously improving brand perception and reducing costs for CPGs. 

At the first stage, this means more intelligent data crunching to produce better targeted online advertising – but it might not be too long until we see billboards that identify individuals from their smartphone and display ads reflecting their personal tastes.

Next generation engagement
AI can also be used as a customer engagement tool, while putting together sophisticated intelligence that provides new insights. Through a social media campaign known as “#whatsfordinner”, Knorr in South Africa uses AI to recommend recipes based on ingredients that consumers have in their fridges.  Programs like this give CPG companies access to consumer data they’ve never had before, potentially opening the door to brand new business models.

Doing ‘The Robot’
In time, AI will not only improve productivity in asset management and marketing, but also across the core value chain – impacting manufacturing and productivity across the business as AI technology is brought to bear on more aspects of business. 

The good news is also that much of the technology is already out there and ready to be used, albeit in nascent form. The rise of ubiquitous computing, low-cost cloud services and near unlimited digital storage have allowed AI to flourish. As they get serious about AI, CPG companies should define a transformation strategy that keeps up with technology developments, while complementing their existing IT strategy.

AI is about more than just a novel new approach to personalization: developments in cloud infrastructure, IoT technologies and advanced analytics all give AI the power to bring ‘anywhere anytime’ insights to CPG companies, and help them to make vital decisions in real-time.

These developments have the potential to reshape the CPG space. Paying attention to AI now will pay dividends in the future. 

Shantha Maheswari is a managing director leading the Technology Services Industry Program and Innovation at Accenture.