Where AI/ML Creates Value in Consumer Goods & Retail and Where It Needs Help

Summary: Especially in consumer goods and retail the value of AI/ML is only part of the story.  AI/ML will increasingly need to integrate with helper technologies to deliver maximum value.  Up your game in IoT, 5G, and robotics to ensure you’re giving your operating team all the best options for their investment.

When I come across interviews with business leaders talking about technology trends I always try to pay attention to how much they seem to know about AI/ML.  For example, very few have yet to pick up on the importance of Platform Strategy.  Still, many times I get a lesson about thinking a little beyond the narrow confines of what AI/ML can do.  It’s not the only tool in the toolbox.

So I was interested in CBINSIGHTS recent report encapsulating what 11 really smart senior execs in consumer goods and retail had to say about what technologies and trends would change their sector over the next 3 to 5 years.

Before we get to the meat of it, a little about the 11 folks interviewed.  All are execs or investors in senior roles focused on innovation in their brands.  Three are VC investors, 8 are operating execs.  Five of the CPGs are in the food & beverage segment, one in fashion, two in electronics.

You would expect all of these folks to focus on the retail consumer and how to reach them.  Specifically how to stand out and differentiate from competitors on the shelf or the ecommerce site.  Also, since these are all manufacturers, I expected to see some focus on supply chain.

Their observations fall into two broad categories seen from the data science side of the fence.  There are a few needs which AI/ML can traditionally fill on its own.  However the bigger lesson for data scientists is that most of what these individuals foresee involves AI/ML blended with an additional technology.  Here I’m talking about 5G, robotics, and specialty devices.

When asked by our operating execs how as data scientists we can help, I think we’re all more than a little prone to think narrowly about standalone AI/ML, especially since our personal knowledge of these other technologies may be thin.  Here were some consistent themes among the interviewees to help you think more broadly.

Finding important outliers is a core strength of AI/ML.  Whether it’s from web logs or register data blended with external data we just need to be aware that these outliers can be important.  Victoria Treyger of Felicis Ventures observes:

“Traditional CPG products are designed with a one-size fits all approach that assumes the 15-year-old girl and her 39-year-old mother will buy the same products and shop in the same way….Expect dramatic growth in clean products, brands for underserved segments, and new distribution approaches.

Clean products will become mainstream in categories from deodorant to beauty and vitamins and supplements.