Can a CPG company use AI to directly influence a consumer’s purchase?

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Companies across all sectors have jumped on the bandwagon in using this technology but what impact does this have on consumers?

AI – aka Artificial Intelligence. When I think of these two words I always imagine the robot from iRobot working with Will Smith or Alicia Vikander in Ex-Machina and remember how she kills her designer at the end (oops spoiler).

However, for those of us who are familiar with the term in a business sense, you’re probably aware that an AI solution thankfully isn’t a robot that might abominate and collapse the human race. At least, not yet.

Artificial Intelligence is an area of Computer Science that involves the creation of technologies that work like humans, but do not necessarily have to act like humans. These are technologies that learn over time as they are exposed to more data and our Capgemini research; Turning AI into concrete value: the successful implementers’ toolkit found they typically fall under three categories:

  1. Natural Language Processing (e.g. Chatbots / Voicebots)
  2. Biometrics (e.g. image/video analysis, voice recognition)
  3. Technology Foundation (e.g. Machine Learning)

We have heard about the impact it has on retail consumers but do CPG companies also have the power to use AI to influence consumer purchases?

The answer is yes. Our Capgemini research has shown that AI has the power to influence sales, boost operations, improve customer engagement and insight generation. In particular, there are four areas where CPG companies are already using AI to build brand reputations and relationships directly with the customer:

  1. Tailored Products
  2. Personalised Services
  3. Pricing, Promotions & Forecasting
  4. Customer Service

Tailored Products

CPG firms are now marketing directly to consumers by aiming to provide tailored products. L’Oréal has entered the Facebook Messenger chatbot trend with an AI gifting service in Canada. The Messenger Bot asks the users questions about their friend and then devises the right beauty gifts for them.

To implement such a solution L’Oréal worked with Automat Technologies Inc. to develop this idea. They have shown they are not afraid to experiment with emerging technologies to improve their customer experience offering and they are not the first beauty provider to do this.

Sephora and Modiface have also implemented AI into their social media strategy by using Modiface’s facial recognition and visualisation technology to allow Sephora customers to upload a photo in Facebook Messenger whilst in conversation with a Sephora Visual Artist, and then provide a recommendation on compatible shades in Sephora’s inventory.

The beverage industry has also worked on tailoring products for their consumers in a similar fashion. Diageo has been using AI to match its consumers to their perfect blend of whisky through Facebook Messenger using the ‘Whisky Matcher.’ Based on flavour preferences, the application finds the right single malt Diageo whisky blend, providing a revolutionized customer experience for the average whisky drinker.

 Personalised Service

Whether it be personalised marketing or a mobile application, the services CPG companies offer are now evolving with the use of AI.

Both Coca Cola and Quartz have partnered with DigitasLBI Hewlett Packard Enterprise in a bid to allow AI through software algorithms to generate its latest adverts and marketing. For Coca Cola, the algorithms are already capable of choosing the music that features in its adverts and it will soon begin to trial on content creation.

Under Armour will be using IBM Watson for its fitness and health mobile applications. Through a new version of its Record app, the data collected from activity, sleep and nutrition will now allow suggestions to be made to improve performance. IBM Watson is a key player in the cognitive business solution market.

Pricing, Promotions and Forecasting

Advances in Artificial Intelligence have been coupled with advances in analytics and therefore pricing. Big data, supported by the implementation of machine learning allows systems to have better capabilities in pricing and forecasting.

 PepsiCo have already implemented artificial intelligence for all their SKUs (Stock Keeping Units) to provide better forecast accuracy. Their team who previously conducted forecast accuracy is now done by AI and allows smarter commercial decisions on pricing for the consumer.

Coca Cola will soon be implementing the ‘smart digital vending machine.’ The data generated by this is hosted in the cloud which will make it possible for prices to be adjusted dynamically, automatically introducing discounts and promotions based on sales data, timings and location.

Customer Service

CPG companies have been using AI Machine Learning in their contact centre CRM to assist contact centre colleagues answer customers’ queries. The machine reads the customer case, typically an issue with a product/brand which has come into the CRM system – let’s take a customer email, for example.

The machine cleverly reads the customer’s email before the adviser gets to it and it uses historical case data to select the most appropriate knowledge article from the CRM knowledge base to provide the customer with an answer. This saves the adviser time in reading the customer issue and searching for the right knowledge article to solve the case manually.

In the same way the machine helps advisers, advisers also help the machine to learn. If the machine has made a strong positive match to a knowledge article for a case, they click a button to let the machine know this was right, so it can record this choice for future use.

If it’s not a great match to an article, they help the machine avoid repeating similar suggestions by recording the poor choice. So, the machine keeps learning and becomes smarter each time.

This is an extremely valuable use case because it not only saves the customer time spent waiting for a response, it also gives advisers much more time to deal with more complex customer issues and to focus on truly engaging with customers instead of doing time consuming, low value, repetitive tasks. It reinforces that AI in a customer service environment, assists advisers rather than replacing them.

Our Capgemini research found that 4 out of 5 organisations said AI has infact generated new roles in the business. It’s encouraging for organisations to know that employee roles and responsibilities can be optimised by AI and improve the employee experience as well as the customer experience.

Airlines have also been using AI bots on their websites to interact with customers who need standard information before travelling – take luggage allowance and seats together as an example.

Customers can ask the bot for this information and they communicate the responses in an instant message format, as if they were live chatting with an adviser. It’s a much more fun and personal way to communicate with customers especially when it’s static or generic information.

It makes a better and more interesting customer experience than scrolling through lists of text FAQs which is far from personal or engaging. KLMs customer service efficiency improved by 35% as a result of using AI technology to interact with customers.

AI can also reduce the volume of simple queries coming into the contact centre – if customers get what they need from the bot they won’t have a need to interact with the contact centre, it leaves more time for advisers to focus on solving complex customer issues.

Research from our Capgemini AI Toolkit Report found that 75% of organizations using AI enhanced customer satisfaction by more than 10%. And, the better the customer experience, the more brands can expect repeat custom, ensuring continuous engagement with consumers.

The power of AI is truly revolutionary, and we are only at the beginning of the journey. How CPG companies continue to empower their brands with this technology remains an important question and the full potential of AI is still evolving.

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