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by Mansi Srivastava

July 18 2024 | 02 min read

A story of fulfilling KPIs Vs. Creating a REAL impact

A confectionery brand in South India faced a familiar challenge: low sales at a key retail outlet. While this issue was not unique, but what happened during the course of solving this issue is really interesting. The brand strategically placed a visi cooler at the store’s entrance and introduced an AI-driven tool to ensure planogram compliance. The salesman visiting the store was required to regularly verify compliance using this tool, resulting in a significant sales surge within weeks.

However, sales eventually declined. Despite the tool indicating consistent compliance, the real issue emerged only when a new salesman took over the store. He discovered that the store owner had moved the visi cooler to the back due to rain, causing the sales to drop. Unlike his predecessor, who followed KPIs without question, the new salesman used his intuition, diligence and REAL intelligence to uncover the root cause.

This story underscores a vital lesson: artificial intelligence must be complemented by real intelligence. Without the keen insight and proactive problem-solving of individuals, even the most advanced AI tools can fall short, reducing their impact to mere KPI fulfillment.

AI is the need of the hour; but real intelligence makes every minute count

AI has undeniably numerous use cases in the FMCG industry. These use cases significantly reduce human workload while ensuring up to 99% accuracy in the results. Some key areas where AI is extensively utilised include:

Predictive Analytics: Companies use AI to analyse vast amounts of data to predict trends, customer preferences, and buying patterns. This helps in making informed decisions about inventory management, marketing strategies, and product launches.
Supply Chain Optimisation: AI-driven solutions optimise supply chain processes by predicting demand accurately and automating inventory management. This reduces operational costs and enhance overall efficiency.
Personalized Marketing: AI algorithms analyse consumer data to create personalised marketing campaigns, enhancing customer engagement and driving sales.

Despite the emerging use cases, Elad Gil, a notable entrepreneur, investor, and advisor in the tech industry who co-founded Mixer Labs (later acquired by Twitter, where he served as a Vice President), recently stated that 99% of AI companies are unlikely to succeed, but the 1% that do could become quite significant. You can read the full article on Elad Gill’s insights here.

Currently, everyone is racing to integrate AI, but experts observe that only 1% of companies will thrive, and those will be the ones utilising RI with AI, and not purely AI.

Embracing Real Intelligence

Real Intelligence emphasises the importance of human skills and judgement in areas where AI falls short. Here are some ways FMCG companies are integrating Real Intelligence into their operations:

Consumer Insights: While AI can process data, understanding the deeper motivations behind consumer behaviour often requires human intuition. FMCG companies are investing in qualitative research methods, such as focus groups and ethnographic studies, to gain richer insights into consumer needs and preferences.
Example:Procter & Gamble (P&G) has a dedicated consumer insights team that conducts in-depth interviews and home visits to understand how people use their products. In an article celebrating their 100 years of delivering breakthrough results with data, P&G highlights their culture of home visits to understand customers’ consumption patterns.
Problem-Solving and Adaptability: Humans are better equipped to handle unexpected challenges and adapt to changing circumstances. Real Intelligence is critical for navigating complex, unstructured problems that AI might struggle with.
Example: During the COVID-19 pandemic, many FMCG companies had to pivot quickly. People at these companies made plans, reallocated resources, and developed new strategies to cope with unprecedented disruptions. This is real intelligence.
Product Suggestion: Many beauty brands have incorporated AI and VR technologies to allow customers to visualise how makeup will look on their faces. However, these AI tools do not account for specific skin conditions or problems. In contrast, beauty advisors in stores can examine your skin and provide personalised product recommendations.
Example: L’Oréal uses AI on its online platforms to offer customised product suggestions and virtual try-on experiences. Yet, they also maintain beauty advisors at various outlets and shopping malls who can recommend products tailored to your skin type. According to an article by L’Oréal, they have trained over 8k women to become beauty advisors at their stores or start their own beauty business.

The Synergy of AI and RI

The future of the FMCG industry lies in the synergy between AI and RI. By combining the analytical power of AI with human creativity, experience, and judgment, brands can achieve a more holistic approach to innovation and customer engagement.

While AI will continue to play a critical role in driving efficiency and innovation, the irreplaceable value of human intelligence is being recognized and integrated into business strategies. This harmonious blend promises a future where technology and humanity work together to create more meaningful and impactful outcomes in the FMCG sector.