Scaling at Speed: How Colgate-Palmolive Uses AI to Globalize Product Success
Colgate-Palmolive's strategy for omnichannel demand generation has fueled more targeted personalization that bridges the gap between brick-and-mortar and e-commerce.
During two recent industry conferences, company leadership shared details about how it is using AI in a variety of ways within this approach, leaning on data clean rooms, digital twins and intelligent promotions to get products in front of consumers, no matter where they shop.
"The omnichannel demand generation is really built around not developing your media just for brick-and-mortar. Don't develop your media just for an e-commerce platform. Develop for the moments that matter," Noel Wallace, CEO and president, said at CAGNY. "It's independent of where people are shopping."
From Ideation to Optimization
Wallace said that it begins with using AI to test out ideas, such as with its Colgate purple toothpaste innovation — a product that helps temporarily whiten teeth by combatting yellow hues with purple tones.
"We start to test these ideas with AI, and we refine them down to the bigger ideas that we can launch around the world," said Wallace.
Once it moves into the incubation phase, a product can be tested using digital twins and panels, validating internal data against market insights and showing Colgate what will work and what won't.
"This is where our teams are testing and learning and failing as fast as they possibly can," said Wallace, who added that AI helps scale efforts at a fraction of the cost, creating new efficiencies for the company.
Once the product is set and a campaign is built around it, Colgate uses AI to quickly develop thousands of content assets, customized for different markets and channels.
According to John Faucher, chief investor relations officer and EVP of M&A, who shared comments at the recent UBS event, Colgate used this to quickly roll out content on a global scale for the whitening toothpaste after the initial launch was successful in China.
Post-launch, Colgate uses an AI promotions tool enabled by large language models, shipment data and retailer category consumption data to run billions of scenarios and create a promotions roadmap for retail partners with a specific variable in mind, either volume, sales or margin.
"It will tell us, 'Here's the promotional cadence that you should have to solve for sales or margin or volume,'" said Faucher, who added that while it is a data-intensive and labor-intensive approach, once the tool is ready to go, it just gets better over time as it is fed more data.
He said AI helped answer several questions at an accelerated pace, including "Is the concept right?," "Is the target right?," and "Is the media correct that we're going after?"
While these AI-enabled tools provide the front-end results, their effectiveness relies entirely on the massive structural overhaul of the company’s backend data.
Innovation Driven by a Data-Enabled Organization
At the center of these efforts is a heavy push toward increased data visibility. Wallace said Colgate has been investing heavily in data analytics over the past three to four years, scaling capabilities in just the last year.
The company is using data clean rooms to enable its AI promo and content capabilities.
Colgate's U.S. Hill's business was the first to build a data clean room that marries its owned first-party data with the third-party data of media publishers and combines that with second-party data from key retail partners across the U.S. while maintaining data compliance.
"We're really looking at our data architecture across the entire business and making sure we have ways to really tap into that data and utilize that data much more effectively around the world," said Wallace.
Caroline Chulick, SVP of global growth and innovation at Hill's Pet Nutrition, said during CAGNY that 70% of its U.S. media spend went through this clean room last year, which led to doubled conversion rates for that media.
According to Faucher, this enables the company to target its media more effectively, by demographics or purchase behavior, for example.
"We can even focus on what media works better with different consumers," he added. "And so it creates a very high-level data environment where we can generate significantly greater ROI on that spending."
The key to scalability, said Wallace, is getting the data architecture right.
"Our ability to really consolidate and cleanse the data into an architecture that we can then share with our retailers is paramount to driving the success of that," she said, adding that after the success with Hill's Pet Nutrition, the company is moving the data clean room approach into the U.S. market for Colgate-Palmolive.
