Outlook on artificial intelligence (AI) applications in consumer goods and retail: Future innovations

How will artificial intelligence drive the future?

Data science, artificial intelligence, machine learning... History has witnessed the rapid development of a series of emerging technologies in the field of computer science. Since Google launched the Transformer model in 2017, LLM (Large Language Model) has gradually penetrated into daily life scenarios. By the end of 2022, ChatGPT was born. As soon as it was launched, it exploded in the market due to its powerful usage effect and broad imagination space, attracting 100 million users in just two months.

How does artificial intelligence empower consumer goods and retail operations?

After a preliminary understanding of the development and conceptual framework of ChatGPT, the question is what does it mean for CXOs and business executives of consumer goods companies? Let's focus on the consumer goods and retail sectors to take a look. Recently, Roland Berger conducted an in-depth analysis of the cases of global and local leading consumer goods and retail companies that have tried and embraced this technology, and extracted four operating models based on the level of internal automation in R&D, marketing and sales processes and the degree of automation in consumer-facing interfaces:

Fully automated: The entire process of product production and sales is data-driven, with a high level of personalization of products and marketing

User-driven: The company has not yet widely used digital operations, but emphasizes multi-channel and personalized customer interaction

Efficiency gains: The internal business processes of enterprises are highly automated, but less emphasis is placed on interaction with customers/users.

· Traditional dependence: The main business relies more on manual processes, and its influence mainly relies on the deep cultivation and operation of traditional retail channels

How does artificial intelligence stimulate the vitality of the value chain?

In the field of consumer goods and retail, artificial intelligence/ChatGPT can be used in all aspects of the life cycle from R&D, production, management to marketing and sales. In this article, we will focus on its application in R&D, marketing and sales.

In the future, enterprises will face major trends in creative content, media diversity, digital transformation and changes in channel models. At the same time, they will need to conduct end-to-end integration to improve overall operational efficiency through automation, high personalization and dynamic transparency. The changes triggered by these trends also provide brands with unprecedented opportunities for improvement. Brands need to seize opportunities, accumulate strength in advance and embrace changes, including:

• Evaluate AI-driven end-to-end automation opportunities to improve overall efficiency of consumer-facing interfaces

• Clarify the enabling scenarios and cross-cutting business processes involved in AI, and strive to reduce the complexity of overall operations

• Benchmark and improve technology deployment (including concept change, human resources reserve and organizational transformation) to achieve intelligence and automation to the greatest extent

Roland Berger will assist brands in considering the most influential concerns in the future, and inspire consumer goods and retail companies to accelerate the potential of applying artificial intelligence. Starting from the current organization, products, and technologies, we will conduct impact analysis and diagnosis, further formulate artificial intelligence strategies and implementation plans, and ultimately realize the brand's artificial intelligence concept sorting and large-scale empowerment. The key to success in learning, adapting, embracing, and even mastering this trend is: AI research will be a top priority for CXOs, a new source of innovation for enterprises, and a key "liberal art" for business executives in the future (quoting management guru Peter Drucker's concept of "liberal art").

Finally, we believe that Roland Berger’s research in the field of artificial intelligence is only a preliminary exploration. In the future, it will need to work with consumer goods and retail companies to meet the many challenges of an AI-driven future, return to the origins of business capability building and corporate competition, and jointly meet opportunities and challenges.

We look forward to working with consumer goods and retail companies to integrate their core genes and capabilities, jointly build differentiated business strategies, and form a stable business capability model to cope with the dynamic and changing market and consumer needs. Compared with traditional "preaching" top-level consulting, we will participate more deeply in the internal co-creation and collaboration of the company, jointly create methodologies and implement best practice cases, and truly achieve synergy at the first scene!

From: Roland Berger Management Consulting