CPG Partner Conversations: Fractal.ai
The COVID-19 pandemic created unprecedented disruption, and in a matter of days, our world turned upside down. As shelter-in-place lockdowns, mask mandates, and social distancing rules took hold, new patterns of shopping quickly emerged. Arguably, no other industry felt the dramatic impact of the pandemic more than consumer packaged goods (CPG). However, leaders are forging ahead with resilience, tenacity, and innovation. We’re engaging in conversations with executives from AWS CPG Strategic Partners to hear their thoughts on leadership and innovation as they manage through this disruption and beyond. We hope you enjoy our blog series. If you have questions or suggestions, please post a comment.
As we continue our blog series, “CPG Partner Conversations: Leadership During Unprecedented Disruption,” we chatted with Amitabh Bose, Chief Practice Officer of CPG and Retail at Fractal.ai, a global leader in artificial intelligence and analytics for Fortune 500 companies. With a vision to reshape business and simplify human decisioning through science and data, Amitabh provided insights about the future of the CPG industry through the pandemic and beyond. Spoiler alert—cloud is critical!
Q: AWS—Help our readers understand your vantage point. What’s the space you play in, and with what type of CPG executives does Fractal.ai interact?
A: Amitabh Bose, Chief Practice Officer of CPG and Retail, Fractal.ai—The Fractal CPG practice helps create measurable business impact through digital transformation. The CIO is our immediate client, and the business leadership is our secondary clientele.
Q: AWS—CPG companies have been managing through unprecedented disruption. What have been the biggest challenges for your customers?
A: Amitabh Bose—Demand supply and cash flow management have been the top two challenges during COVID-19.
Q: AWS—How do you see CPG firms adjusting their current operating environments to changing market dynamics and consumer expectations?
A: Amitabh Bose—There is an unprecedented surge towards digitization. We see these current focus areas:
- Integrated business planning while working at home: This involves demand supply orchestration; cash flow, resource, and human capital safety planning; adapting supply lines; and running production lines—all from a home office.
- Revenue management: There have been many challenges, including pivoting the portfolio to demand categories, streamlining the product assortment by as much as 50%, as well as developing pack x channel mix for a growing ecommerce channel and pack x price formats for shelter-at-home consumption.
- COVID-19 adjusted demand planning and scheduling: This has been the single most important focus in the industry to pivot resources to meet demand.
- The switch to digital and personal marketing: Media spends are back, but many CPG companies have switched to digital media.
Q: AWS—The CPG industry is incredibly resilient. As you look toward the new normal, what role does technology and the cloud play for CPGs? How do you see technology enhancing the way CPGs make, move, or market their products?
A: Amitabh Bose—All the operating responses I mentioned previously require a cloud environment. Working from home is yet another factor driving CPGs to switch to the cloud.
Even as markets in the US and Europe prepare for the second onslaught of COVID-19, CPGs need to shift to digital environments to avoid further disruptions. Cloud plays a major role in digital technologies as an environment and also as a platform to develop AI applications for business operations using demand sensing and IoT signals that won’t risk human life.
Q: AWS—With the current CPG industry disruption, how is your company innovating to respond to changes?
A: Amitabh Bose—At Fractal, we have been investing in transformative solutions to enable business operations, which allows us to help our clients manage through challenging times.
To enable integrated business planning from the home office, we utilized data lakes in the cloud and adapted the UI/UX to suit business user personas. This helped our clients’ transition from an office environment to a home environment, without dropping the ball on business operations. Employees didn’t need to take time to learn a new tool or interface.
We plugged our open-source AI forecasting engine, Foresient, into client AWS environments, and we rapidly tuned it to COVID-19 demand planning. This change enabled the joint business planning between our CPG clients and retailers to create unified demand planning conversations.
We are currently on the journey to crash the boundaries between business functions—the CIO organization, the CFO revenue management organization, and the customer development organization—to develop a unified way of managing revenue for better business outcomes during times of disruption. A client cloud environment makes this solution possible.
In emerging markets, we developed a sales order recommender system for a major player in the confectionary industry to drive market coverage and sell-ins, with a demonstrated ability to grow business between 4-6%. We are currently scaling this solution in a cloud environment for a million stores under direct store coverage in India, and we plan to replicate this solution in other APAC markets.
Q: AWS—There is much talk about a “new normal” going forward. What does this “new normal” look like to you, and how do you think the CPG industry will look three years from now?
A: Amitabh Bose—DTX (Direct to consumer, disintermediation) is the new normal for the CPG industry.
There are three tiers of experimentation underway in this space:
- Consumer 360: The shift from mass marketing to personalized targeting and engagement with consumers. We are working with clients to build internal capabilities for programmatic media buying and retargeting to reduce reliance on media partners and gain media efficiencies. This involves setting up a customer data platform for programmatic media and consumer interaction.
- Pivoting the portfolio towards a majority ecommerce business: This involves selling and streamlining the brand portfolio to shrink SKU assortment to compete on hero SKUs.
- Reimagining the business model for a direct-to-consumer business: This requires a CRM-focused business, very much like Amazon’s flywheel model that removes intermediary brokers, distributors, and resellers.
Q: AWS—What makes you excited for the future of CPG?
A: Amitabh Bose—The industry is experimenting with a DTX model—alternate approaches that focus on customers and cut out disintermediation. Its first principle is problem solving, and we are excited to be a part of this transformation.
Thanks for chatting with us, Amitabh. We appreciate your insights and expertise.
If you have questions for Amitabh, Fractal.ai, or AWS, please comment on this blog.
Amitabh Bose (Ambo) is a business transformation leader, driving Fractal’s growth and stature to become the No. 1 global provider of digital transformation to the CPG and Retail industries through AI engineering and design. He spent the early part of his career in sales and marketing with P&G and PepsiCo and joined the analytics industry in 2005. Since then, Ambo has played several roles that encompass incubating and integrating start-ups and leading global analytics practices for publicly listed technology and business services firms globally. Ambo is a keen student of AI, behavioral sciences, and their application to transform the industry. He envisions the industry transforming to decision run and believes Fractal is uniquely placed to drive this wave.