Data – and, crucially, how it’s used – can be a game changer for CPG companies. And one of the best ways to use data at scale and drive profitable outcomes is through Artificial Intelligence.

Absolutdata CEO Anil Kaul and Chief Customer Officer Rohit Nagpal were recently featured on The CPG Guys. During this episode, the conversation centered on recognizing the need for AI in CPG and retail, the value AI brings, and why it’s so imperative to invest in AI right now.

Below are some of the points discussed in the podcast; you can listen to the full episode on Buzzsprout.

About The CPG Guys

The CPG Guys podcast is hosted by eCommerce and consumer loyalty gurus Sri Rajagopalan and Peter V.S. Bond. It centers on helping brands and retailers connect with customers online, in physical stores, and across other channels. For more info, visit CPGguys.com or catch the podcast on Stitcher, Apple, Audible, Spotify, Buzzsprout, and other popular podcast sites and apps.

Why Is AI Important to CPG and Retail?

AI is the branch of computer science that studies how humans think and behave and then builds machines to replicate that ability. AI’s subfields include things like audio processing, computer vision, language processing, and machine learning.

In CPG and retail, there are a lot of repetitive activities. And there are areas where a lot of information needs to be brought together to make a decision. Areas like these is where AI shines – automating processes, analyzing data, and figuring out the insights. For CPG and retail, AI one of the best ways to use data and automation at scale.

How Does the CPG Industry Use AI to Connect with Consumers?

Marketing is about understanding and meeting consumer needs; it’s not just about selling a product. AI helps you understand and treat each customer as an individual; you can provide them what they need, and you can deliver it in a way that’s best suited to them. This can make the consumer experience very positive, which really brings value to CPG companies.

How Has AI Helped Specific Brands or Retailers?

At Absolutdata, we’ve worked with a lot of CPG clients; you can find numerous examples of AI applications in CPG and retail on our website. We’ll just focus on two here.

The foodservices division of a Fortune 100 beverage company needed to ensure their sales plans across categories and SKUs were data-driven – from regional all the way down to an outlet level. We created a specialized recommendation engine with deep neural networks, collaborative filtering, and other data models. This enabled salespeople to approach each account with very specific recommendations at the product, assortment, and location levels. As a result, there were increases in revenue, incidence supporting, and consumption growth value across categories.

It’s important to note that something like this had never been done before; it was one of the four use cases listed by BCG as an example of innovation with AI. We’re now working with this client on extending AI to other areas in the company. (Read the case study.)

The other example is about using digital twinning to streamline and enhance product launches. (If you’re not familiar with digital twins, see this article about digital twins’ application in retail.) Essentially, this entailed combining all of the data on the marketplace, the consumer, and the product to create an extremely detailed model.

Digital twins allow you to simulate the real-world response to certain decisions. Using the digital twin reduced our client’s timeframe by over 60 percent and slashed costs by 50 percent. You could say it cut the whole process in half.

In short, AI is bridging the gap between insights and action. Instead of just giving people information, it’s providing actionable recommendations and a way to try them out on very realistic models to forecast their effect.

How Can AI Impact Revenue Growth Management (RGM)?

RGM is about finding the combination of the right technology, the right data sets (sales, marketing, consumer, campaign, etc. – the exact mix depends on your objective), and the right recommendations – not just the data output, but what that data and recommendation will lead to.

AI helps enhance RGM decisions across pricing, assortment, trade optimization, digital transformation, and other areas. There are three distinct advantages to using AI in RGM: it’s integrated, scalable, and actionable. Plus, many RGM models are self-learning; they will self-adjust as they are used and create their own performance improvements.

Finally, Explain What AI Does for Brand Health and Equity.

First, let’s talk about measuring your brand health. The first step is to pick the objectives you want to achieve.

Then you need data – lots of diverse sets of data – to do justice to brand equity. We have a lot more data now than in the past: social data, digital habits, etc. Overall, you’ll look at:

  • Brand perception – What do consumers think?
  • Brand recall – How memorable is your brand?
  • Brand attributes – How do people interact with the brand? Are they engaging with it, talking about it on social media?

 

Keep in mind that the closer your customer experience is to the brand promise, the healthier your brand equity is. That’s the main objective.

Then you bring it all together, decide what you want to do, and dive into the data to determine how to reach that goal.

What AI has done here is sped up this process and made it forward-looking. Traditionally, brand health measurements have been about how the brand is doing. But that’s already happened – it’s the result of actions we’ve already taken. What we should focus on now is what can be done to get your brand to do better. AI can help find areas for improvement. It can make it easier and faster to understand what’s happening and why. And perhaps most importantly, it can help you determine what exactly you can do to drive a positive change.

Listen to the Podcast for More Insight into AI in CPG and Retail

There were additional questions explored during this podcast episode, including ones specific to Absolutdata’s expertise in AI. To listen to the entire podcast (and check out other episodes), visit The CPG Guys‘ page.

Authored by: Richa Kapoor, Senior Manager, Marketing at Absolutdata

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