The surge of artificial intelligence (AI) in finance, commerce, and payment sectors has accelerated the shift from analog and manual processes to automated digital solutions. Consumer packed goods (CPG) are now at the forefront of the digital transformation wave. With the help of AI, the traditional strategies of CPG marketing are transforming, offering new insights and capabilities.
In the CPG industry, digital transformation hasn’t only changed product marketing methods but also redefined consumer engagement, data analytics, and the overall marketing mix. AI and Machine Learning (ML) are revolutionizing facets of the business from supply chain management to personalized marketing. According to Lesley Salmon, the chief digital and information officer of Kellanova, ML algorithms help analyze extensive data to enhance inventory management, demand forecasting, and production planning.
Kellanova, a recently spun-off global snack brand from Kellogg’s which includes Pringles and Cheez-Its, uses digital tools for various purposes. These range from data-driven personalized offers and employee collaboration to improved ecommerce conversions. AI has enhanced data analytics, allowing the brand to research eating habits and explore direct-to-customer (D2C) opportunities.
In 2023, 24% of all brands and 55% of CPG brands added a D2C channel, stated the Harvard Business Review. CPG executives, including those from Mondelez, CocaCola, and ColgatePalmolive, believe that digital transformation and data from digital marketing efforts continue to reshape strategies and tactics.
Analytics firm Quantzig noted that CPG businesses are using data analytics and AI to develop direct connections with consumers. This transition is not just about digitalization; it aims to revolutionize customer experiences, product offerings, and market strategies.
However, the highly competitive digital landscape also poses challenges. With competition transitioning from product and pricing to algorithms, consumer preferences, and technological advancements, brands must continually adapt their tactics.
Brands like Mondelez are using AI to enhance data that informs consumer engagement, business decisions, and promotions. Gustavo Valle, Mondelez’s president for North America, said that AI in marketing should considerably increase marketing ROIs while reducing the cost of traditional creation.
Multiple brands echo this approach. For instance, Coca-Cola is optimizing data for marketing and marketplace intelligence, while ColgatePalmolive is developing a data culture. Unilever is leveraging AI-driven data and digital processes to alter everything from product design to marketing to supply chain.
In conclusion, while digital transformation provides opportunities for CPG marketing, it also poses challenges that brands must deal with to remain relevant and engaging in a rapidly evolving market.
Source: CPG Marketing Embraces New Models for Digital Transformation.
