CPG’s or consumer packaged goods are, by their nature, replaced or replenished by customers regularly. CPG items like food, beverages, clothes, tobacco, makeup products, and other household items need to be frequently replenished.
Consumer packaged goods remain in constant demand, which has led to the rise of several CPG companies in recent times. Because of this, the established CPG companies are struggling to stay afloat in the marketplace. The customers can switch their brand loyalties easily due to the multitudes of options available in the market. Hence, they are facing a downfall in revenue and profit.
However, by using AI for consumer-packaged goods services, CPG companies can scale up sales and profitability. It can help CPG companies to understand consumer behavior and also effectively manage the inventory levels. Hence, artificial intelligence can overcome the common pitfalls and devise new customer-oriented, long-term marketing strategies for CPG companies.
According to the latest study trends in the CPG market, the implementation of AI can help these companies to generate more than 10% revenue growth. AI and advanced data analytics can help the CPG companies to improve their productivity through predictive demand forecasting, more relevant ?local assortments, personalized consumer services, and optimized ?marketing strategies.
Listed are the Three Ways AI Can Enhance the CPG Retail Experience
Effectively Optimize Sales and Promotions
With the rise of e-commerce, an overwhelming fraction of customers rely extensively on digital marketplaces to supply CPG goods. The digital consumer now has more agency than before in customizing their choices while purchasing packaged goods online.
Hence, a CPG company needs to develop an enticing in-store promotion if they wish to retain their customers. However, it is difficult to carry out these promotions as it is subjected to high failure risks.
Implementing the AI solution can help the CPG companies to optimize the in-store promotions. If CPG companies want to maintain their agility and improve their profit, high intelligence AI-powered solutions are needed. It needs to implement the AI and ML tools that can interpret and analyze the historical sales data. With this, the CPG companies can understand customer behavior. AI solution helps the CPG teams to understand the crucial trends and opportunities with which they can effectively optimize their sales performances.
Increase Understanding of In-Store Customer Behavior
A customer’s in-store behavior helps the company to analyze and to determine the loopholes in the management system. To improve physical retail performance, retailers can use an AI-powered video analytics system. With this, they can keep a vigilant eye to understand the interaction between their customers and the in-store goods and displays. This will help to augment the capabilities of the sales member to make improved use of sales data. By observing the customer’s behavioral patterns, they can determine which of the brands is performing well. The incorporation of data and operational analytics powered by AI tools can help to observe the behavior of the customers at a particular shelf. How much time a customer spends on a product and other similar observations can help the CPG team to increase the profitability of the company.
Manage Inventory Levels
AI-based systems can help the CPG team to determine the quantity of product that is necessary and needs to be restocked. Stores have varied shelf space, and an ill-planned inventory decision can scale down its performance. AI can help the CPG team to mitigate the risk of displeasing the customers by helping the team to understand the present inventory situation of their stores. With this, the CPG teams can take a visionary approach to prepare the shelves for better customer satisfaction.
The CPG system administrator can teach the AI and ML algorithms about the changing sales and inventory data. With this, it will become easier to determine the optimal inventory levels for different products across the chains of stores, and the companies can reduce the inventory holding charge. Real-time analytics will help the companies to analyze the optimal service levels, demand variations, suppliers? lead time, and also the batch size. Better inventory management has the potential to bring down logistics costs, improves asset utilization and inventory performance.
AI tools can be used for demand forecasting, demand sensing, and inventory planning/management, which can help the CPG company to make a positive impact in the marketplace. AI and ML tools can be used to optimize and improve the CPG retail experience. It will help the CPG companies to plan and replenish the supply chain inventory. This will help to meet the customer service from time to time and will improve the cash flow and profit margin. Better management is important to improve the productivity and profitability in this sector.