As the wave of artificial intelligence (AI) sweeps through the payments, commerce, and financial services industries, new definitions are needed. AI and digital transformation belong in the same sentence, as AI is enabling and accelerating the momentum from analog and manual processes to automated digital processes. And one industry that is at the forefront of this latest round of transformation is consumer packaged goods (CPG).
As brands navigate this new realm, the strategies that once defined the space are being reshaped by the capabilities and insights provided by digital tools and platforms. This transformation has not only changed the way products are marketed, but also redefined consumer engagement, data analytics, and the overall marketing mix for FMCG brands. AI in CPG businesses is part, but not all, of digital transformation.
“AI and ML [machine learning] We are revolutionizing many aspects of our business, from supply chain management to personalized marketing,” said Keranova, Chief Digital Information Officer. Leslie Salmon.
“Machine learning algorithms help analyze vast amounts of data to optimize inventory management, demand forecasting, and production planning. We also use generative AI to and enhance customer engagement through personalized recommendations.”
If the brand Kellanova doesn't sound familiar, that's because it's a global snack brand that recently spun off from Kellogg's, which also includes Pringles, Cheez-Its, and Nutri-Grain. In a recent interview, Salmon detailed the array of digital tools brands are using for everything from employee collaboration to data analytics to personalize offers and improve e-commerce conversions.
She was careful to point out that AI has added new capabilities to data analysis, developed research on dietary habits, and provided continuity for brands that continue to explore direct-to-customer (D2C) opportunities.according to harvard business review, 24% of brands across all categories added D2C channels in 2023. 55% of these were in the CPG category.
Salmon is just one of several CPG executives looking to spice up the direct-to-consumer market again. Mondelēz, Coca-Cola, and Colgate-Palmolive are among her participating companies, all with a clear understanding that digital transformation and the data collected from digital marketing efforts continue to change strategies and tactics. Participating in
“The move to D2C, backed by data-driven insights, heralds a major transformation,” says the analytics firm. Kwanzig. “Freed from the limitations of traditional supply chains and intermediaries, FMCG businesses are leveraging the power of data analytics and AI to establish direct connections with consumers. It's not just about adapting; it's about revolutionizing customer experience, product delivery, and market strategy. CPG In this digitally transformed era, the company is fundamentally redefining consumption, production, and customer relationships. , paving the way into uncharted territory.”
Digital transformation offers opportunities for FMCG marketing, but it also brings challenges. The digital environment is highly competitive, and competition is shifting from pricing and products to algorithms, consumer preferences, and technological advances. Brands must remain agile and continually adapt their strategies to remain relevant and appealing.
For example, Mondelez's use of AI is centered around consumer engagement, enriching data to inform decision-making across the business, and adding insights to promotions and loyalty programs.
“Ultimately, our approach to AI in marketing should deliver significantly higher marketing ROI at a fraction of traditional production costs,” he said. Gustavo Valle, President of North America for Mondelēz. “We are also building capabilities with AI models that act as the brain and transform and adjust marketing more broadly across different dimensions.”
Valle's approach was echoed by several other brands. Coca-Cola Company CFO john murphy Data is a “never-ending optimization” to update marketing and market intelligence, he said.
Chief Analytics and Digital Officer, Colgate Palmolive diana schildhouse Talk about building a “data culture” within your company. Unilever uses AI-driven data and digital processes to transform everything from product design to marketing to supply chain. Combine R&D and supply chain data with manufacturing simulation to quickly respond to real-time trends and market changes and scale innovation faster than the analog world allows.
“I strongly believe that science and technology play a central role in innovating for a better future.” Alberto Prado, Head of R&D Digital & Partnerships at Unilever. “The combination of digital and cutting-edge science allows our team to advance our field in decades rather than years.”
