CPG sector is having a constant accumulation of data thanks to the Internet of things (IoT) and traditional business data. With all this information at disposal, a lot of CPG companies don’t know how to exploit and turn them into potential investments. But AI and especially the field of Machine learning is taking all this data as a sheer opportunity that can transform and improve everyday business.
What is Machine Learning (ML)?
As expert.ai states, machine learning (ML) is an application of artificial intelligence (AI) that provides systems the ability to automatically learn and improve from experience without being explicitly programmed. Machine learning focuses on the development of computer programs that can access data and use it to learn for themselves.
Machine Learning and CPG common grounds
CPG sector has unique characteristics that are a convenient area of work for Machine learning. According to Analytics India Magazine, enormous data volumes with a very large number of transaction records, the short shelf life of the products, large base of consumers make CPG the ideal candidate for ML. Machine learning can process large datasets and extract lucrative reports that can give a complete insight into a particular segment of the business. Besides that, Machine learning can bring order to retail shelves. CPG companies often face detrimental situations such as understock, overstock, the market share that has not been respected by retailers, and other series of situations that are characteristic of non-optimal execution. All these problems can disappear using solutions provided by Machine learning technology. So, Machine Learning can optimize in-store execution, supply chain and thus decrease expenses and drive sales. It can also be used to boost the effectiveness of marketing campaigns.
With help of Machine Learning, CPG companies can improve their whole business by focusing on more productive elements and determine priorities by leaving ML to handle the job with piles of data that in a traditional way would take days and indispensable human error.
“The Boston Consulting Group conducted a joint study which argues that by using AI and advanced analytics at scale, CPG companies can generate more than 10% revenue growth through more predictive demand forecasting, more relevant local assortment, personalized consumer services and experiences, optimized marketing and promotion ROI, and faster innovation cycles.“
In conclusion, it is time for the CPG sector to start adopting new technologies that in the long-term can generate immense benefits and provide commercial profitability.