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Consumer Markets

AI for consumer markets in 2021: delivering for the business, overcoming obstacles

Retailers and consumer packaged goods (CPG) companies are increasingly deploying artificial intelligence (AI): computer systems that can sense their environment, think, learn and take action in response. And the vast majority of those who have invested report substantial benefits — now.

Bar chart titled
How far along retailers and CPGs are with AI
Consumer-facing companies
All companies
We have processes fully enabled by AI with widespread adoption
%
%
We have started implementing limited AI use cases
%
%
We have a few promising proof of concepts and are looking to scale
%
%
We have tested a few proof of concepts with limited success
%
%
We don't use AI currently but are looking into it
%
%
Q: To what extent is your company looking to integrate AI technologies into its operations? Source: PwC AI Predictions 2021. Base: 202

Expectations for this year are also strong: 83% of retailers and CPGs say that AI will become a “mainstream technology” in their companies in 2021. COVID-19 has accelerated AI initiatives in nearly half (49%) of retail and CPG respondents.

The reason for doubling down on AI? It’s delivering, especially for the business.

The consumer experience and more — what AI offers right now

Half or more of retailers and CPGs with AI investments report current benefits in five key areas: creating better consumer experiences, growing revenue, enhancing employee upskilling, improving decision-making and reducing risks. When we combine those reporting current benefits and those that expect benefits within two years, positive responses hover around 90%.

Why such success? AI’s power to make sense of vast amounts of data — much of it unstructured — is often precisely what retailers and CPGs need to give consumers the experiences, products and services they desire. AI can also provide highly accurate forecasts for consumer demand and supply chain resilience. It can “game out” potential go-to-market strategies. And it is critical to powering remote work and upskilling programs, as well as supporting the cybersecurity that makes all such programs possible.

Are retailers and CPG companies getting AI payback?

Getting to scale: top AI obstacles

Yet retailers and CPGs are facing challenges in their AI initiatives — though all have solutions.

The top AI challenges that retailers and CPGs are prioritizing this year relate to operationalizing AI at scale: developing AI models and data sets that can be used across the company, moving AI initiatives from pilot to production and measuring ROI. 

Company-wide AI models and data sets not only provide economies of scale, but they also increase the power of AI by giving the models more data and more opportunities to learn. Moving from pilot to production requires skills and technology as well as a cultural shift, new governance and new ways of working. Measuring ROI can be tricky, since benefits may be indirect: a better decision made or a key employee’s time saved.

Bar chart titled
Top AI challenges for consumer-facing companies
Developing AI models and data sets that can be used across the company
%
Moving AI initiatives from pilot to production
%
Measuring AI's return on investment
%
Training current employees to work with AI systems
%
Recruiting workers who are already trained to work with AI systems
%
Maintaining AI systems that are in production
%
Managing the convergence of AI with other technologies
%
Standardizing, labeling and cleansing data for use in AI systems
%
Making AI systems responsible and trustworthy
%
Making the business case for AI
%
Creating AI-related governance policies across the business
%
Q: What AI-related challenges are the top priorities for your company in 2021? Source: PwC AI Predictions 2021. Base: 202

As you operationalize, it’s important to address new risks. In our survey, about a third of retailers and CPGs (35%) report fully addressing risks and adding necessary controls related to AI data, while 29% report fully addressing possible gaps in AI governance.

Top takeaways

  • Many retailers and CPGs are already AI leaders. With 20% already reporting widespread adoption of processes fully enabled by AI, AI’s time has come. COVID-19 accelerated AI initiatives, which more than 80% of retailers and CPGs say will be mainstream in their companies in 2021.

  • AI is for the business. At retailers and CPGs, the front office is reporting big benefits from AI, with some top initiatives centering on the consumer experience, dynamic scenario planning to forecast demand and supporting new tools for marketing in a post-cookie, post IDFA world. 

  • Scaling up AI is challenging — but doable. Top AI challenges relate to scaling up AI and embedding it in everyday operations. Yet many retailers and CPGs are finding success in operalizationizing AI through a three-part reorganization. 

  • Time for a closer eye on risk. Most retailers have not yet fully updated governance or data policies to enable secure, reliable, responsible AI that inspires trust. Many may also need to analyze and minimize AI bias, since without care, AI models might discriminate against groups of people. 
PwC Consumer Markets

PwC Consumer Markets

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Anand Rao

Global AI Lead; US Innovation Lead, Emerging Technology Group, Boston, PwC US

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Tyson Cornell

Private Consulting Solutions Leader, Chicago, Chicago, PwC US

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