The tremors of the ongoing COVID-19 pandemic are visible across the global supply chain and customer purchasing patterns. Though the world is reopening in different phases, uncertainty still reigns over unprecedented regional outbreaks. The advantage in this scenario lies with consumer packaged goods (CPG) companies using artificial intelligence as a master key to the new normal.
CPG is performing much better than other industries but has seen its share of challenges over the past few months. Consumer demand for certain products (bathroom tissue, flour and other grocery items) shot up and companies struggled to suffice for them with upended supply chains. Simultaneously, the demand for products used at educational institutions and restaurants saw a decline. Moreover, the panic buying led the customers to hoard whatever available, putting long-term ties with the brands on pause.
The Two Big Questions
CPG professionals are aware that it isn’t possible to establish broken supply chains and switch packaging, distribution or other operations magically overnight. So how to manoeuvre with confidence in such a transformed environment? The reply to the following questions holds the key to the new normal:
1. What will consumer behaviour and profiles look like in the new normal?
2. What will the demand pattern be going forward?
It simply means you need to know what, where, and how people will buy and the quantities and frequencies of their purchase. You could have referred to the historical data for some guidance, but with change in dynamics, the pre-
pandemic data about manufacturing, pricing, logistics, etc. holds no water today.
Hence, you need to answer the above questions to predict the future. Now is the time to prepare for demand, channel changes to optimize supply chains accordingly and be on the same lines with consumers. Here AI makes a difference:
Helps Provide Futuristic Answers
If you are seeking an answer to the first question about what consumer behaviour will be, then there’s some good and bad news. The good news is that humongous content is available in the form of articles, whitepapers, blogs, and webinars which have words of wisdom from experts.
The bad news, the sheer quantity of such content makes it difficult for individuals or teams to sift through or focus on the content relevant to the business and product lines. But again, the good part is that AI can process such massive datasets to find out what’s relevant to business, summarize it, and provide insights to aid in better decision making.
Now is the time to prepare for demand, channel changes to optimize supply chains accordingly and be on the same lines with consumers
AI has already highlighted trends to help CPGs navigate. It includes customers’ ‘cocooning’ behaviour which seems to persist beyond the initial lockdown phase. AI forecasted quite early that people waiting for the pandemic to die down were resorting to digital-first buying habits, ordering almost everything online.
The other trend predicted early by AI is the new emphasis on frugality and quality in purchase behaviour. Though the focus on frugality can be inferred from uncertain economic conditions, consumer attention on high-quality experiences while spending on goods and services wasn’t something analysts anticipated. But AI was able to detect signals and render insight.
The Trends and Demands in the New Normal
Another trend, consumer focus on fitness and wellness has implications for CPGs. This is due to a growing preference for contactless delivery systems that the customers can rely upon under current circumstances. But trendlines do change. AI can monitor consumer activity, alert you as trends undergo variations, giving you time to react.
Besides, the demand for AI is not restricted to specific consumer signals. CPGs are building AI models to predict demand in general. AI can assess multiple data sources such as internal company data or the common anonymized information form mobile or text. Using this, AI can forecast drastic changes (if any) caused by a regional outbreak that might set off a shutdown or a reboot that could affect supply chains, production, and demand.
Such insights can help CPG stay nimble in unprecedented situations. To be precise, AI is the master key the decision-makers need to get early access to data on changing customer behaviour, evolving demand patterns, and facts that may affect business. One cannot be sure if the things will go back to the normal again. But, CPGs that chose AI, have the upper hand in the new normal – the one we are currently living in.