Three Ways AI Is Repackaging CPGs


The Consumer Packaged Goods (CPG) companies need to know how to develop their product in a way that both creates value for a customer and separates them from competitors. They need to develop the logistics to ship the right type of inventory to the right place, at the right time, in the right amount. They need to know where and how to promote their products, and how to interact with their customers throughout the process. They need to forecast trends and act quickly when the time is right.

Even this is an oversimplification of what CPG companies must coordinate throughout any given day, and it is very easy to become overwhelmed and become slow to react to market or logistical changes. Fortunately, advances in artificial intelligence technology have made CPG strategy and implementation much simpler. Here are three ways AI can make your life easier in the cuckoo-crazy world of consumer packaged goods — forecasting, marketing, and customer experience.


Forecasting may be the most important implementation of AI in CPGs. Being able to make accurate predictions on market trends, product demand, and the success of marketing campaigns can have a major effect on a CPG’s success — a point we have illustrated in an earlier article on predictive analysis. According to a study from BCG.com, “CPG companies can generate more than 10% revenue growth through more predictive demand forecasting, more relevant ­local assortments, personalized consumer services, and experiences, optimized ­marketing, and promotion ROI, and faster innovation cycles.” Their study shows that demand forecasting (the use of AI to predetermine product levels) drives sales increases of 2.5% alone!

The use of AI not only helps determine how much of a product to produce but where and when to send them out. This optimizes the supply chain, ensuring that supply matches demand, so there are no empty shelves, and no products collecting dust in warehouses. As Catalyticsconsulting puts it, “Forecasts are only useful if they are available in a timely manner… Harnessing all of this data enables businesses to react in real-time. A company can be agile by identifying trends that may have otherwise gone unnoticed, as well as hazards to avoid.”


According to a Nielsen study, 72% of promotions fail to get a return on investment. Promotions are notoriously difficult to manage, especially as marketing campaigns are getting increasingly personalized. The sheer amount of data needed to run an effective campaign can make a marketer’s head spin, and, amazingly, 60% of companies are still inputting their data manually through spreadsheets and proprietary software. Machine learning programs can vastly improve the process, of collecting and categorizing data automatically. Furthermore, AI can analyze this data nearly instantly, providing the optimized recommendation after exploring hundreds of thousands of scenarios across multiple variables. Using AI to create personal promotional campaigns enormously increases a marketer’s ROI, with reports of revenue increases of 8 to 18 fold!

Why is data so difficult to manage and use in CPG, specifically? Many products are sold through third-party retailers online or on the shelf in stores — making it difficult to know who’s buying what and what led to their purchase. Plus, for any data CPG companies do own, it is often decentralized across different departments and teams making it nearly impossible to interpret. The solution? A platform capable of centralizing, organizing, and activating audience data from one place in a way that works for different teams (also called data orchestration). But more on that in a bit.

Customer Experience

The final major category of how AI can help CPG companies is customer experience. Customers increasingly support brands that they have a personal connection to. In order to foster this goal, businesses need to have a well-developed customer outreach system in place that drives customer engagement and loyalty. By using AI, CPG companies can have a better idea of user behavior, and utilize that to create the interactions that customers want. The AI in image and voice searches are making it easier for customers to find what they need, and machine learning and NLP are used in the creation of chatbots and ticketing services to provide useful and fast engagement when consumers need to directly interact with the company.

How We Can Help

Figuring out how to activate CPG data can be incredibly complex, but AI and other technologies can simplify the process. But where should you start? Whether your brand wants to explore AI to predict better promotions or build customer loyalty more quickly, we can help. With 15 years of custom development experience, Lineate builds the world’s top brands' predictive analytics algorithms and behavior-based loyalty technology so customers never receive out-of-nowhere promos again. For more, check out our eBook, Getting Real about AI


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