A push to create the most unique and personalised experience for shoppers across multiple channels is the driving factor in the development of AI within the FMCG industry.
That’s one of the key conclusions from the third in a series of masterclasses in partnership with Adobe, hosted by print and features editor at Inside FMCG, Dean Blake, that focused on understanding AI and what it means for the future of the FMCG industry.
Guests, Dr Jessica Pallant, lecturer in marketing at Swinburne University of Technology, and Kathryn Muslayah, former group GM of disruptive businesses and capability at Asahi Beverages, predict that developing personalisation and customisation will drive the deployment of AI during the next five years.
“We are definitely going to see a lot more personalisation, a lot more customisation and a lot more optimisation – particularly with things like experience – really being able to hone opportunities for individual customers,” said Pallant. “It would be interesting to see if AI can then help us in the back end identifying what products people are actually wanting and targeting and producing individual products for people en mass.”
Muslayah agrees, adding that while some of that stuff is already happening, she expects it to be ramped up, with brands looking at how to create the most unique and personalised experience for shoppers throughout the omnichannel – not just online.
“It can be how do we learn about movements in store? How do we learn about what people are looking at on a shelf, and where do we best place products? How do we understand through AI, what customers are doing when they are at a grocery store, at an aisle end, how do we best place products and what messaging really lands well?”
She says that more than just data crunching, AI will help manufacturers interpret the emotional factors and create better experiences for people.
AI can “hallucinate”
A challenge, however, is that generative AI is “hallucinating” at times so companies need to be careful with how they use it while the technology continues to develop and be refined.
“So we should be understanding the subject area enough that we can identify when these hallucinations happen, and then recheck the information ourselves as well,” says Pallant.
“I think that’s a really big caution when it comes to generative AI: we can’t just blindly trust whatever it’s spitting back at us. We need to try and find the original source or verify that information in another way. That’s why I think generative AI is probably going to be most dangerous for the people who are not experts in their field because they won’t be able to pick up on those nuances that someone with a lot more experience will have.”
Artificial intelligence has grown by leaps and bounds in the last few years and it’s poised to disrupt the way many businesses operate from the back-end processes to the way to communicate with customers. Blake quoted research estimating that generative AI alone could add the equivalent of $4 to $6.8 trillion annually, and improve productivity globally.
Pallant cited an example from Amazon that illustrates just why such an ambitious figure is no exaggeration: “Around one-third of Amazon sales actually come from their predictive algorithms – their recommendations of ‘people who bought this also bought that’. I mean, 30 per cent is a huge amount of Amazon’s sales. So as AI improves, the predictive algorithms are going to get better. I think this is a really huge opportunity for brands to invest in. But the predictive algorithms are only going to be as good as the data you put into them, so investing in better quality and more data is going to be just as important as investing in the predictive algorithms.”
Muslayah believes generative AI within the chat space is evolving to become more consumer-friendly enabling businesses to be “more human” in their digital communication.
“It is constantly learning and evolving in terms of how it [responds] to the questions it is being asked. This is a really great way that a lot of businesses in this space – particularly retailers – are starting to gain insight into and use AI through chat-type scenarios.”
While consumers might have been suspicious or dismissive of automated chat on digital channels in the past, an improving experience is helping companies streamline online processes and ensure consumers joining those chats are getting “a real-life experience” as much as possible says Muslayah.
“With anything really simple and basic – that is, consistent questions that people have – rather than having to go through to a call centre or go through to an individual, if you can streamline those processes, you can reduce costs and also create a really good experience for the consumer.”
Should consumers be scared of AI?
Some consumers are still scared by AI, as many were in the early days of the internet, says Muslayah.
“But the internet didn’t destroy the world, it made it better for a lot of people. It didn’t take over everybody’s jobs. Yes, it took over some jobs, but with AI, people need to understand how we can use the technology to our advantage rather than get scared by it.”
While she acknowledges the hype surrounding ChatGPT, she points out it is an open system and there are lots of closed AI systems running behind firewalls that businesses can use. But they must be sure to maintain the right security, to ensure that their data integrity and IP are maintained.
How AI can aid product development
For brands, especially manufacturers in the FMCG space, there are real opportunities to use AI in product development as well.
Various businesses using AI to help companies develop products and identify market opportunities, says Muslayah.
It can help identify customer segments for branding purposes and help create different versions of a particular product for people to look at in focus groups. In that way, for example, it can help simplify the process of innovation and bring things to market faster that will actually succeed, she says.
Other topics covered in the masterclass include whether AI is likely to be regulated, data security and what great examples of AI being used by businesses really stand out.
You can view the full Masterclass – supported by Adobe – here.
- Read about the previous masterclass here: Here’s how Modibodi and Marley Spoon are navigating price pressure
