Practical Applications of Artificial Intelligence and Machine Learning to Fuel Growth for CPG Companies

The concept of artificial intelligence (AI) has been around for centuries as philosophers and thinkers pondered the possibility of creating machines capable of thinking and functioning like humans. The advent of computers in the early 20^th century finally placed the promise of AI within reach. However, computer scientists realized they needed enormous amounts of data and computing power in order to utilize AI in meaningful ways. At the turn of the 21^st century, with the advent of cloud computing and social media, both the compute capacity and data were finally available to deliver on the promise of AI and machine learning (ML).

AI and ML Become Meaningful Technologies in the Early 21^st Century

And here we are in 2021, generating more data than computer scientists could have imagined back in the 1950s when AI first occurred. In fact, according to Forbes magazine, we produce 2.5 quintillion bytes of data each day. Analyzing even a small fraction of that data is overwhelming for humans. This is why AI and ML can be tremendously beneficial with helping companies optimize operations. And this is especially true for CPGs as they navigate challenges like fragmentation, increased competition, changing consumer buying habits, and disruptions such as the COVID-19 pandemic.

If you’re scratching your head wondering how a CPG company can utilize AI and ML, then you’re not alone. While many CPGs have embraced the AI and ML innovations, many other companies are still trying to understand the best implementation methods for the technologies. This post will share some strategies for utilizing AI and ML to increase revenue, make better decisions, reduce costs, and fuel growth.

Boost Sales with Personalized Product Recommendations

If you’ve ever bought an item on Amazon and seen a list of recommended items, then you’ve experienced AI and ML technologies in action. An algorithm is programmed to recommend products complementing the item(s) that you’re buying in order to encourage consumers to buy additional items that they may not have realized they needed or wanted. This is a perfect example of utilizing an AI-based solution, Amazon Personalize in this case, to boost sales.

Improve Decision-making with ML-based Demand Forecasting

One of the most powerful capabilities of AI and ML technologies is the ability to analyze petabytes of data very quickly—an impossible task for a single person or even a team of people. When considering demand forecasting data, with historical information, variable data like prices and discounts, as well as external information such as weather and social media commentary, there’s simply too much data for the human brain to assimilate and understand. Many innovative CPGs are utilizing Amazon Forecast, an ML-based demand forecasting solution, in order to improve forecast accuracy to make better decisions about product allocations at different retailers, transportation for deliveries, and sourcing component parts and materials.

Reduce Call Center Costs with AI-driven Contact Center Platform

Cutting costs is always a top priority for CPG companies. With AI and ML technologies that can automate repetitive processes, speed up workflows, eliminate the human-error factor, and detect safety issues or product defects, companies can significantly reduce costs. CPG companies, such as Subway and the Slice Pizza app, are utilizing Amazon Connect to automatically route calls to the right agent with the appropriate knowledge and skillset based on a prediction of the caller’s needs. CPG companies can reduce the average handle time by as much as 15% and reduce agent training time by a full week.

Accelerate Scalability and Growth with Efficiencies from AI and ML

A connected, cloud-based technology platform lets CPGs implement processes enhanced with AI and ML technologies in order to fuel growth and scale with efficient processes. For example, this can be done to help an emerging CPG brand with a small workforce automate inventory processes in order to manage, stow, pick, pack, ship, and deliver inventory with ML-based quality control models and computer vision solutions.

While I’ve shared several strategies that CPG companies can implement in order to innovate and optimize operations with AI and ML technologies, there are many more strategies and use cases than I can’t cover in this blog. There’s also much more information that you should know about AI and ML so you can assess your organization’s needs and challenges in order to determine how best to utilize these technologies. I encourage you to read our new ebook, How Large CPG Companies Can Act with the Agility of a Start-Up, to learn more about AI and ML as it specifically pertains to the CPG industry.

If you’re ready to implement AI and ML technologies in your company, AWS is here to help. Contact your account team today to get started.