Artificial intelligence in the Consumer Industry | Consumer Products | Deloitte Netherlands

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AI's potential for consumer products companies

Improve efficiency and enhance customer experience

It’s hard to understate the impact of artificial intelligence (AI) on the consumer products industry. Never before could companies gain so much insight into their customers – and use that knowledge to create intelligent solutions. Adopting AI is necessary to grow your company and stay relevant. But how to start?

Unlocking value from data and knowledge

You can think of AI as a vehicle to unlock value from data and knowledge, says Naser Bakhshi, Director Artificial Intelligence at Deloitte. “By combining data and knowledge in algorithms and tools you can develop cognitive solutions that generate real value,” Bakhshi explains. You could also describe AI as the next level of insights, and a way to make better and faster decisions, adds Patrick Schunck, partner and consumer products industry expert. “Ultimately you can get a better understanding of your customers through AI. Allowing you to tailor your services and products, facilitate growth and differentiate yourself from the competition.”

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AI use cases for the consumer products industry

The figure below explains possible use cases of AI for the consumer products industry. They are arranged based on the four categories associated with cognitive technologies: robotic process automation (RPA), language technologies, machine learning, and computer vision.

Use cases

Creating a relationship with the customer

Hyper-personalisation is one of the hot topics and strategic themes in today’s consumer market, says Bakhshi. “If you look at sports and apparel companies or big retailers, it’s all about creating a relationship with the customer as a segment of one. That’s why consumer products companies should embrace AI: it’s the only way to get a fact-based understanding of your customers.”

Take for example health apps from sports companies, which collect data around exercise behaviour. With the help of AI, that data can be connected and compared. “A model can then generate personalised advice, for instance about the best nutrition for you, based on your habits, behaviour, taste and activities,” explains Bakhshi. This is already happening for the athletes of a big Dutch football club and a professional Dutch cycling team. “There are retailers, fashion companies, health companies and of course tech companies involved,” Bakhshi explains. “It’s the start of a totally new eco-system combining different companies together, made possible by AI.” 

Keeping up to stay relevant: AI as a must

Artificial Intelligence may not become the new standard overnight, but it is a very fast-moving technology, says Schunck. It’s not so much a choice if you want to use it, but rather when you will start to do so. “Companies really need to embrace AI in order to still be competitive and relevant in a couple of years. And yes, this is an impactful change, pivotal even,” Schunck says. “AI is a game-changer. It’s an important part of the daily life of consumers, and should be a part of the daily life of the business. That’s why we want to show companies the art of the possible and guide them through a fundamental structured process.”

To help companies explore how they can leverage AI, Deloitte developed the AI-driven business models, says Bakhshi. “It’s an end-to-end methodology approach to help organisations from the ‘I’m interested in how AI could deliver value’ phase all the way to developing prototypes and scaling up the solutions.” The approach explores business questions, identifies use cases, checks whether an AI solution is feasible and, finally, if the organisation is ready to use AI.

Why Deloitte?

Adopting and leveraging AI is part of the digital transformation of a company, says Schunck. “At Deloitte we have all the insights and expertise to make this move happen.” Deloitte can bring in depth knowledge about AI itself, and about the legal, organisational, change-management and tax aspects that come with it. “When you apply AI it’s not just a stand-alone piece of technology with two geeks around it,“ says Schunck. “To make use of these additional insights, you’ll also need the right governance and the right people.”

Deloitte holds the strong belief that AI starts with people and should serve people. “You need to make sure your organisation is capable of working with AI and educate your people to trust the technology,” says Bakhshi. “That’s why we also create journeys to demystify AI, show how it impacts people in their daily lives, and augments their activities. Because in the end, that’s what AI is all about: augmenting, not replacing.” 

Artificial intelligence in practice: what are major companies currently doing?

Until recently, flavours and aromas were tested using chromatography and spectrometry techniques that were tedious and time-consuming. Developing a new flavour using these techniques potentially took 8 to 24 months. Enter ‘The Beer Fingerprinting Project’, Carlsberg’s latest research project that deploys AI-based sensors to rapidly detect flavours and aromas of beer. This sensor technology for flavour determination can reduce the time taken to innovate and develop a new beer flavour by up to 30 percent. Carlsberg hopes to use this technology to bring new beer flavours to the market faster than before. Success of this project can open doors for similar uses in other diverse industries, including the pharmaceutical and food industries.

Carlsberg tests AI to develop new beer flavours

Estée Lauder deploys a patented AI-based facial recognition programme to develop a chatbot that helps online customers to choose and purchase their ideal lipstick. The chatbot is accessible on Facebook Messenger and allows online and mobile users to interact with Estée Lauder’s select lipstick brands. In addition, the chatbot administers a quiz to customers and then provides them with personalised shade recommendations.

Estée Lauder uses a chatbot to help consumers discover their ideal lipstick

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