The world of shopping is constantly evolving – particularly for consumers. They are offered more opportunities to save money, presented more options and selections to shop from, and are provided with multiple methods for obtaining their purchases. While there have been continuous improvements and innovations to the consumer experience, there have only been minor adjustments to the demand forecasting and S&OP processes, which continue to fall short.
This bitter pill is only made worse by the fact that CPG companies spend between 11% and 27% of their revenue on trade promotions. And with as many as 60% of companies still using highly manual processes to manage their promotions, this combination of inefficient planning and ineffective retail execution highlights a glaringly unaddressed opportunity for improvement.
Companies in other industries have already turned toward using emerging technologies, such as cloud computing, IoT and AI, to help develop an advantage over their competition. Amazon, Facebook, Google, and Apple are all examples of industry leaders that have leveraged artificial intelligence to gain an edge.
However, these companies have invested significantly in researching, developing, and deploying their AI solutions. Amazon spends more than 10% of its revenue on IT, whereas retail and CPG manufacturers only invest 1%-2%. So it should come as no surprise that large scale CPGs are lagging behind in AI adoption. With an increase in competition, now is as good a time as ever for companies to move forward with their digital transformation.
With few companies on this journey and even fewer seeing results, the roadmap is very unclear. That said, they all start with the same set of questions:
While this starting point may look intimidating, there is hope. Rubikloud can help you answer all of these questions with our Machine Learning Value Assessment (MLVA). We use your actual data to identify the largest financial impact use case AI can have on your business within a matter of weeks. At the end, you are provided with a detailed maturity assessment that will help you begin your AI journey.