Ernst & Young LLP (EY US) announced the release of its second Consumer Products and Retail Executive Pulse, which highlights the pressure that CPG and retail leaders are under to showcase AI proficiency, with a continued focus on technology modernization and innovation investment and identifying new levers for growth.
The Pulse, which surveyed over 250 US executives in the retail and CPG industries, found that 74% of leaders consider their companies to be AI mature (rating themselves a 4 or 5 out of 5). But the anxiety surrounding the pace of AI coupled with where companies are from an investment standpoint, may call that perspective into question. Fifty-two percent still note that the rapid introduction of new and emerging technology keeps them up at night. Plus, strategic investments are just now starting to ramp up as 47% of executives plan to increase investments in GenAI or ML in the next year, which is up from 31% from the Pulse at the end of 2023.
“AI’s incredible opportunity offers CPG and retail executives the ability to mine data, create new efficiencies and streamline operations in ways never before imagined, and at the same time drive new paths to growth and innovation. But AI and GenAI technologies are still emerging and although investment in this area can create differential value, progress can’t happen overnight,” said Rob Holston, EY Americas Consumer Products Sector Leader.
“We’re still seeing many brands and retailers in the use case testing phase, and they have to balance the pressure for progress with the reality of the journey to a responsible, strategic and long-term AI agenda,” continued Mark Chambers, EY Americas Retail Sector Leader.
The use cases for AI are compelling, with 41% of the retailers and brands navigating shrink challenges saying AI and enhanced predictive analytics are the most effective solution, more than any other prevention method. Further, one in three (33%) of executives are using AI to drive more personalization in the customer experience, improve decision support across forecasting and scenario planning and for customer service chatbots. But the opportunity to embed AI to accelerate the strategic agenda could be even bigger.
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