How Artificial Intelligence Is Impacting CPG Companies
By Ray Petrick, Vice President of Sales, Boiron USA
Interest in AI is growing fast. Companies are experimenting and trying new ways to utilize AI in their business models to stay ahead of the curve and be at the forefront of the revolution.
The digital transformation of the retail industry has been accelerating for the past four years. Social and digital marketing and the omnichannel have changed the way manufacturers reach and service their consumers. This is in large part due to advanced and predictive analytics that help CPG companies make data-driven decisions.
AI in retail has empowered businesses with high-level data and information that, if leveraged into improving retail operations and new business opportunities, will have a profound impact. The CPG industry is leading the way — globally. AI in CPG is expected to grow in value from $39.2 million in 2022 to $283.5 million by 2032.
However AI is still foreign to many companies. Most are not sure how to best implement AI to successfully maximize its potential and, more importantly, to create value and growth. But for those who invest in AI and the necessary resources they will have access to more data for analytics, higher personalization, and improve marketing strategy with personalization — all a game changer for companies of all sizes!
To illustrate the thoroughness of AI, see the very detailed answer assembled by ChatGPT to this author’s question: “With AI, will CPG companies have access to more data and analytics?”
“With AI, businesses in the Consumer-Packaged Goods (CPG) industry can tap into a vast array of data sources to gain deeper insights into consumer behavior, market trends, and product performance. Here's how AI can revolutionize CPG analytics:
- Data Integration: AI can integrate data from various sources, including sales transactions, social media interactions, customer reviews, and IoT devices. This comprehensive dataset provides a holistic view of consumer preferences and market dynamics.
- Predictive Analytics: By leveraging machine learning algorithms, AI can analyze historical data to predict future trends and demand patterns. This enables businesses to optimize inventory management, production planning, and marketing strategies.
- Personalized Marketing: AI-powered analytics can segment consumers based on their preferences, purchase history, and demographics. This allows businesses to deliver personalized marketing campaigns and product recommendations, increasing customer engagement and loyalty.
- Supply Chain Optimization: AI algorithms can optimize supply chain operations by forecasting demand, identifying potential bottlenecks, and optimizing transportation routes. This helps CPG companies reduce costs and improve efficiency.
- Competitive Intelligence: AI can analyze competitor data, including pricing strategies, product launches, and consumer sentiment. This enables businesses to stay ahead of the competition and adapt their strategies accordingly.
- New Product Development: By analyzing consumer feedback and market trends, AI can identify opportunities for new product development or product improvements. This helps businesses innovate and stay relevant in a rapidly changing market.
Overall, AI-powered analytics offer CPG businesses valuable insights that can drive growth, improve efficiency, and enhance customer satisfaction.”
In conclusion, social and digital marketing, the omnichannel, the last mile, and now artificial intelligence will make a winning difference. Those who understand and leverage this new world will create a distinct competitive advantage in the marketplace.