Harnessing AI for Business Transformation in Consumer Goods
The consumer goods industry is gradually embracing artificial intelligence (AI) and generative AI, with 71% of leaders reporting AI adoption in at least one business function, according to a 2024 McKinsey global survey. However, to gain a competitive edge and unlock AI’s full potential, these companies must scale their efforts across their value chain.
This article provides guidance on three key areas where AI can make a significant impact, drawing on Amazon Web Services’ (AWS) experience with top global consumer goods players. These insights will help consumer goods leaders define strategic objectives and identify priority areas for transformation.
Streamlining Supply Chain Operations
AI-backed analytics can identify patterns at remarkable speeds, enabling organizations to be proactive and ensure transparency—crucial for sustainability and regulatory compliance. Hyper-automation at scale allows AI systems to self-correct processes throughout the supply chain, including manufacturing, warehousing, and transportation. AWS services like Amazon SageMaker Canvas and AWS Supply Chain generate accurate forecasts using historical data, predicting product demand and volume to improve demand forecasting and planning while optimizing manufacturing.
For instance, More Retail Ltd. (MRL), one of India’s top four grocery retailers, collaborated with Ganit as its AI analytics partner to forecast demand more accurately. They built an automated ordering system, overcoming manual judgment bottlenecks. As a result, MRL increased its forecasting accuracy from 24% to 76%, reducing fresh-produce waste by up to 30%. In-stock rates improved from 80% to 90%, and gross profit rose by 25%.
Consumer goods companies can also use AI to analyze large amounts of data rapidly, identifying and mitigating risks such as weather delays, equipment downtime, and quality issues. AI can assess supplier performance and reliability, providing optimization recommendations. By leveraging scalable data and AI services, organizations can increase supply chain visibility, improve sustainability, ensure product availability, optimize inventory, and cut costs.
Managing Channels More Efficiently
AI helps consumer goods companies optimize promotional campaigns and product placements by analyzing historical sales data and additional sources like stock levels, weather forecasts, and consumer trend information. AWS services such as Amazon Q in QuickSight aid in-store product positioning and future promotional efforts. For companies selling directly to consumers, AI offers AI assistants, virtual try-on opportunities, and personalized recommendations.
Rufus, a generative AI-powered shopping assistant trained on Amazon’s extensive product catalog and customer reviews, answers customer questions and provides comparisons and recommendations based on conversational context. This enables customers to make informed purchasing decisions and navigate the Amazon Marketplace more efficiently.
For companies with both online and offline presence, collaborating with retailers is essential to provide a unified commerce experience. AI optimizes efforts, freeing staff to focus on enhancing customer experience and improving collaboration with retailers to maximize revenue growth across all sales channels.
Innovating Faster and Hyper-Personalizing Customer Experiences
Consumer goods companies can use AI to enhance innovation capabilities and deliver personalized customer experiences. Sentiment analysis, social listening, and predictive consumer trends can generate new product ideas. AI-generated packaging design and automated A/B testing can significantly shorten new product development cycles.
Adidas trained a stable diffusion algorithm on 150,000 shoe images to generate new shoe designs with specific criteria. When Adidas China needed product background and model images customized for the native market, it used Amazon EC2 and Amazon SageMaker to create photorealistic models, reducing time to market and costs.
Companies can maximize marketing effectiveness and grow customer loyalty through augmented real-time customer insights powered by Amazon Personalize and Amazon Q. AI-driven personalization and chatbots in customer service, supported by Amazon Q in Connect, can reduce spend while improving customer experience.
Conclusion
To build customized experiences, accelerate content creation, and optimize marketing, consumer goods companies must adopt a robust data strategy. Access to high-quality, comprehensive data is essential for delivering personalized, timely, and relevant products and marketing campaigns. By strengthening data-driven partnerships across the value chain and investing in the right technological infrastructure, such as cloud services by AWS, companies can unlock valuable insights and better understand, engage, and serve their customers.
Discover how AWS can help transform and modernize your business with AI by connecting with an AWS representative or AWS consumer goods Partner today.
