Leverage Artificial Intelligence in CPG Products to Generate Value  

April 26, 2018

A 2017 PwC survey that focused on artificial intelligence (AI) reinforced what many sci-fi enthusiasts have long understood: the promise of AI is compelling across many aspects of society. As AI technology has improved to make the fictional possible, consumers are increasingly comfortable with the idea. The PwC survey found that almost 60% of people think that AI will help us lead more fulfilling lives, and more than 40% of respondents already use AI-enabled digital assistants (e.g. Siri, Alexa), with higher adoption by millennials and business decision-makers. As consumer adoption increases, CPG companies will need to incorporate AI in their products and business processes to remain competitive. 

CPG products that leverage AI successfully are those that go beyond offering data to support decision-making. Connected products like my grill thermostat that connects to my smartphone are useful, but provide limited value. They may be lauded in technology magazines and purchased by tech-forward early adopters, but they struggle to reach mass market adoption. Products that combine connectivity with AI to help consumers make decisions will be the winners in the marketplace. Consider two examples: the robotic vacuum cleaner and the smart thermostat. 

The first automated robotic vacuums were developed more than 10 years ago. Consumers can interface with them through mobile apps to check the status, or start or stop operation, but their movement and function has largely been random and time-bounded. Some have done well in the market, but they are far from ubiquitous. They have not yet crossed the chasm to mass adoption. 

In comparison, smart thermostats have been available in the market for half as long (less than 5 years) but have seen stronger growth to reach a level of adoption similar to robotic vacuums. The difference is that smart thermostats go beyond just connecting to your smartphone; they leverage AI to help consumers make decisions. An example is Nest’s Airwave technology that analyzes system performance and minimizes use of the air conditioning compressor to save energy, while still reaching the target temperature quickly.  

If you’re thinking about a new CPG product, don’t just stop at making a connected device. Creating the robot or adding Bluetooth connectivity is a good first step, but it provides limited value. Challenge your team to think beyond connectivity and consider how they will leverage AI to help consumers make decisions or act. This will enhance the value of the solution you provide and increase your chances of success.  

If you’re not sure how to apply AI to your product concept, consider starting with a stakeholder mapping exercise. Think about not just the user, but all the other stakeholders in the system. Consider the different ways your solution could provide value to each stakeholder, and then prioritize the areas where you may be able to leverage AI to generate value. Keep your stakeholders and the decisions they need to make in mind throughout your development process and your product will be more likely to make it across the chasm to mass-market adoption. 

 

About the Author

Cary Strickland leads our consumer packaged goods work and brings to our clients his extensive experience helping product development teams find the right partners, assess technology options, or evaluate their competition for developed and emerging markets. He has expertise in technology scouting, landscaping and evaluation, market opportunity analysis, and technology-inspired ideation and human-centered design. He has also managed projects in infrastructure and construction, industrial coatings and chemicals, food, and packaging; his international experience includes Japan, Saudi Arabia, and the Philippines. When not musing on innovation excellence he plays guitar and bass.

Cary has an M.E.M. in Engineering Management from Duke University, a B.S. in Chemical Engineering, and a B.S. in Paper Science Engineering from North Carolina State University.

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