Exploring the Latest with AI and Machine Learning in the Consumer Products Industry
Artificial intelligence (AI) and machine learning are having a disruptive impact on the consumer products industry, changing not only what types of products appear on retail shelves, but also how those products are brought to market and eventually delivered to consumers. As a result, more than nine in ten businesses have ongoing investments in AI and machine learning, implementing it into nearly every aspect of the consumer product lifecycle. With AI and machine learning constantly increasing their reach in the consumer products industry, there are a few main considerations for companies to implement these technologies effectively. In this piece, we explore the latest with AI and machine learning in the consumer products industry.
AI-POWERED PRODUCTS
A visible way to see the impact of AI on the consumer products industry is via the introduction of products that directly make use of language recognition and computer vision – both of which are only possible with the introduction of machine learning algorithms. Common products in this category include AI-powered virtual assistants, such as Amazon Echo and Google Home. Already, products that you use every day may already integrate elements of machine learning without you even realizing it, including Facebook (photo recognition) and Netflix (personalized movie recommendations based on past viewing behavior). This type of recognition and recommendation functionality is quickly extending to more and more consumer products.
A NEW ERA OF PERSONALIZATION AND CUSTOMIZATION
Consumer products categories seeing a great uptake of AI-powered personalization include the food and beverage sector and the apparel and fashion sector. For example, consumer products brands are using sophisticated AI algorithms to analyze various taste, aroma, and flavor profiles of products, and then coming up with new beverage or food products that have combinations of similar tastes, aromas, or flavors. Similarly, Sephora, a consumer products brand renowned for its personalization initiatives, uses AI to offer customized products based on the customer’s skin tone. Eventually, through applications such as these, the goal is to usher in an era of ultra-personalization, in which consumers no longer need to purchase mass-market goods that are completely identical to all other goods.
MANUFACTURING, LOGISTICS, AND DELIVERY
At the manufacturing level, AI and machine learning are also impacting the consumer products industry. For example, AI is being used at manufacturing plants for quality control and supply chain optimization. Today’s modern logistics chains are so complex that humans are now using AI for what is often referred to as “augmented decision-making.” Thanks to AI algorithms, managers now have much greater supply chain visibility and can then analyze the best processes to automate. This leads to faster time-to-market, as well as lower costs for consumers.
Going forward, look for even more efficiencies in shipping and logistics. For example, Amazon has a patent for “anticipatory shipping,” which is a way of getting an order prepared for delivery before a product has even been ordered. By using AI algorithms to study user behaviors, Amazon can make very informed guesses about which items in your shopping cart will actually end up as part of your final order. Seeking to avoid a repeat of the widespread headache caused by supply chain disruption in recent years, 40% of businesses are using AI for inventory management and 30% are utilizing it for supply chain operations. Expect these percentages to keep rising as AI continues to develop in the consumer products industry.
MARKETING AND PROMOTION
Finally, AI is playing an important behind-the-scenes role in how consumer products are marketed and advertised to consumers. Companies are constantly seeking ways to strategically automate their marketing, and AI offers organizations opportunities to do so thoroughly and efficiently. The easiest way to see this is with eCommerce, where every step of your customer journey is being studied and analyzed so that you can be shown ads, messages, and promotions that have the highest likelihood of getting you to purchase something. Coca-Cola has quickly become an industry leader in AI marketing, partnering with Open AI’s ChatGPT to conduct an interactive, customer-driven marketing campaign. Consumers should anticipate rises in immersive marketing strategies like Coca-Cola’s through increased use of AI.
THE FUTURE OF AI IN THE CONSUMER PRODUCTS INDUSTRY
As can be seen, AI and ML can play a variety of roles within the entire customer experience. They are impacting manufacturing and logistics, marketing and promotion, and even customer service. Going forward, these technologies will continue to have a dramatic impact on the success and growth of consumer products companies.
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This piece was originally published by Crescence in 2019 and has been updated to reflect the latest market innovations and considerations.
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