How to Navigate the Intersection of AI and Pricing

The intersection of artificial intelligence and pricing continues to evolve within the consumer goods industry, impacting several areas of business. Within revenue growth management, CPGs must consider several elements, including corporate responsibility, brand reputation and communicating value to both stakeholders and customers.In a recent CGT Expert Exchange, Joel Cartwright, industry principal of consumer products at Vistex, spoke with Liz Dominguez, senior editor at CGT, about the evolution of RGM into a more transparent and responsible discipline. Their conversation explored the shift toward explainable AI, highlighting how brands can maintain consumer trust by demystifying pricing logic and using dynamic discounting to solve critical sustainability challenges like product waste.Cartwright has nearly 30 years of experience in the consumer packaged goods and consumer products industries, with the last 15 years focused on the software side. His expertise spans sales, sales operations, finance and trade marketing optimization. In his role at Vistex, he supports development, marketing, sales and solution delivery teams with insights on industry-specific trends.When it comes to pricing, he says the utilization of AI is very important to expand on the analysis that a company can do. It allows companies to not just focus on a few causal factors, but open it up to the shopper pricing experience. By expanding that focus to consider the consumer's purchasing behavior within planning capabilities, product churn, product sensitivity and shelf life, companies can better align their promotions to move products through to the consumer rather than have them sit on shelf. This means not just relying on sheer incremental models to determine what the lift will be to say, "Hey, I need to understand where I need to stretch out a promotion longer because of the shelf life of this product because of other impacting factors." AI can better identify buying patterns and consumer trends to promote the product, move the product quicker so CPGs don't get caught with a lot of buydown costs that impact margin. Cartwright says AI is specifically helpful for identifying deal combinations, especially when products come from multiple manufacturing locations. It will drive suggestions and dynamically consider pricing, driving the shopper journey through the store. While AI is still at a point where it's just giving recommendations, as agentic capabilities evolve, human intervention can pull back slightly. Of course, someone will still have to come in to confirm if it's the right decision and if it makes sense based on the analytics that are being presented, but it will help move things along, according to Cartwright.

How to Navigate the Intersection of AI and Pricing

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