By Addie Lawrence
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To stay competitive, CPGs need to understand the trends that are shaping the industry. What are the major themes underscoring 2020? The rising influence of AI and machine learning on analytics, the need for better insights, and increasing consumer expectations.
Ensure your technology is up to date and your strategy is set to capitalize on these trends.
1. CPGs will take advantage of AI and machine learning to inform decision-making.
It’s estimated that AI and analytics could add as much as $13 trillion to total output by 2030, increasing the annual rate of global GDP growth by more than one percentage point.* These projections for 2030 are rooted in AI advancements that have already started. CPGs will continue to invest in AI in 2020, specifically in regards to decision-making.
AI and machine learning are revolutionizing the way CPGs can use data to make business decisions. CPGs are combining first-party data with syndicated sources, and to make the most of these investments, they’ll look to advanced technology like AI to uncover actionable insights.
In other words, CPGs have tons of data at their fingertips; now, they need help understanding what the data can tell them about how to find growth and what actions they should take to drive the business.
AI provides CPGs with fast data analysis that generates actionable insights, all without the help of a data analyst. Machine learning algorithms can identify performance drivers from hundreds of thousands to millions of data points, so CPG professionals know which factors most impacted their results.
In 2020, CPGs will continue to invest in AI-driven analytics because of the advantages it provides. AI pinpoints the “why” in the data, so decision-makers know where to focus their efforts for the best ROI. Even now, CPGs can leverage AI to understand brand health, market share, trends, performance, and “what if” scenarios.
The use cases for AI will continue to grow, and CPGs will become more comfortable with the automation enabled by this technology.
*McKinsey Global Institute: The Coming of AI Spring
2. CPGs will invest in AI-powered innovation analysis.
Innovations are expensive endeavors for CPGs. To succeed, CPGs need to move quickly and accurately; once a new product hits the shelves, there’s a very short window to adjust strategy to either course-correct or capitalize on opportunities.
In 2020, CPGs who invest in AI-powered analysis can reap significant rewards. First, AI can assist with innovation planning by helping CPGs identify growing segments. Second, centralized analytics can assist with cross-functional collaboration by assembling relevant data from every department into a single source of truth.
Once innovations are launched, AI provides CPGs with a fast and deep understanding of performance. It takes time to build distribution, and AI can help fill in the gaps without sacrificing the quality of the analysis.
CPGs who leverage AI for innovations can be more agile, acting during the launch instead of waiting until year-end to get a report on performance, essentially leaving money on the table.
3. The role of CPG category managers will shift.
In 2020, retailers will be well-equipped with syndicated data sources like Nielsen. Plus, they’ve invested in their own data scientists and analysts who build reports and generate insights. As a result, retailers are looking for new insights that they can’t produce themselves.
CPG category managers can fill in that gap and bring new value to the table. Specifically, category managers need to tell a different data story.
Category managers can, for example, leverage data sources across marketing channels. By engaging in social listening, category managers can better understand how consumers talk about products and adjust their strategies accordingly. This kind of analysis will become more critical to the category manager role as retailers continue to invest in their own analytics resources.