A study by the Boston Consulting Group concludes that CPG and retail companies, for the most part, have neglected to fully deploy AI broadly across the demand-generating processes they consider most strategic.
In a survey, 46% of retailers named offer-to-assortment AI deployment, focused on better curated product offerings, as their top priority, and only 34% have scaled significantly in that function. Almost half of CPG executives polled identified idea-to-market as the most strategic process for artificial intelligence, and only 11% have scaled AI in this space.
The report — “BCG’s AI in CPG and Retail: How Winners Are Pulling Ahead” — indicated 75% of CPG respondents polled remain in AI pilot mode or exploration mode, while only 18% are scaling AI to strategic effectiveness. Retailers exist in an essentially two-speed world, in which 45% are scaling AI impact while 40% have barely begun, BCG stated. The business services firm added 15%, a group it calls “Explorers,” who are in a middle ground where they’ve gained but still aren’t up to speed.
Across both sectors, more than half of companies fall short in AI scaling because they do not formally measure the ROI of their AI investments, BCG said. The report added that companies developing a comprehensive framework that integrates AI into demand-generating processes can drive 180 to 360 basis points of cumulative EBIT in the retail case and 220 to 350 basis points in the CPG case.
“The reason that some CPG companies and retailers are pulling ahead isn’t necessarily that they started from a stronger position,” said Nicolas De Bellefonds, BCG’s global AI lead and a coauthor of the report. “They set higher ambitions, mobilize their organizations around a few focused priorities with discipline and effectively manage their data and technology ecosystems.”
