AI 101: Automating the Mundane

Join Nicholas Wegman, Ph.D., Senior Director of Artificial Intelligence and Alex Barnes, Senior Director of Product Management, in a three-part series that demystifies the science behind Artificial Intelligence (AI) and reveals how it can increase your margin. Taking an insightful journey into its history and present-day market trends, they will discuss why AI may—or may not—represent an ideal solution for every business.

With all the buzz about AI, it can sometimes feel like we've stepped out of a sci-fi movie and into a new reality. AI has been a captivating area of research and development since the 1950s, with its advancements rapidly evolving over time. Now aided by immense compute power, it is far more accessible than ever before. ChatGPT stands as a testament to this progress--it's the fastest-growing AI in history, with 100 million users in the two months since its launch. 

But what exactly does this revolutionary technology do? In short, it equips machines with abilities that previously could only be performed by humans, enabling computers to learn from experience, adjust new inputs, and carry out human-related tasks such as recognizing speech or images, translating languages, and playing games. AI can also be applied to business decision-making processes by automating mundane tasks or analyzing large datasets quickly and accurately. As the discussions around AI applications have progressed from academia to social media to the world at large, more businesses are looking at where it might boost their productivity—and enhance their bottom line. As well as the ethical concerns about what the complex, opaque systems may do that can cause societal harm than economic good.   

One of the most impressive aspects of AI technology is its ability to analyze large, complex data sets with a level of accuracy and precision that exceeds human capabilities. The insights that AI can provide feels like magic. However, the foundation and origins of AI can be traced back to linear algebra, calculus, probability, and statistics; subjects that have been around for hundreds of years. These subjects combined with modern computing power allows AI systems to process large amounts of data and train models in a reasonable amount of time. This makes AI systems faster and smarter, so they can be used in medicine, finance, transportation, and more. 

AI-powered demand forecasting is becoming increasingly popular in the retail and CPG sectors, as it offers predictive insights into future customer behavior and spending habits. For both retail and CPG industries, many companies are leveraging AI technologies for tasks such as automated customer service, product recommendation systems, inventory management, and fraud detection. 

Let's delve a little deeper into AI-powered demand forecasting and planning. AI algorithms can quickly analyze large datasets to identify complex patterns which can be used to anticipate changes in demand accurately. They can also detect subtle trends in customer buying behavior, such as seasonal variations or changes in preferences over time, allowing retailers to adapt their product offerings accordingly. 

AI is a revolutionary technology that has the potential to transform the retail and CPG industries in profound ways. Consider a scenario where a buyer or a buy planner no longer needs to navigate multiple data inputs from various sources and remember numerous passwords. With AI-powered tools, these professionals can streamline the buying process by automating data collection and analysis. Similarly, AI can help buyers manage in-season markdowns more effectively by analyzing sell-through rates and other key metrics, freeing them from the tedious task of manually inputting data into spreadsheets. For supply chain managers, AI can provide more accurate demand forecasts by analyzing historical data and market trends. These AI-powered tools not only expedite mundane processes but also enable companies to make informed, data-driven decisions with minimal effort and cost. 

For one of our CPG clients, AI-powered demand forecasting and planning technology proved to be instrumental in addressing a major issue affecting their Mucinex category, a collection of products for colds and flu relief. Through its ability to manage an abundance of data from various sources, the AI demand planning technology drastically simplified complex tasks such as aggregation and evaluation – ultimately revealing that the company was losing considerable profits due to high promotion costs without being able to compete with other brands on price point. By collaborating closely together using this newfound insight provided by AI solutions, analysts were enabled offer invaluable strategies around optimizing promotional performance whilst driving sales success within the category.  

By automating mundane tasks and analyzing data quickly and accurately, businesses can save time and money while improving their efficiency with AI. 

In our next article in this series, we'll take a deeper look at the data science behind AI and how it leverages a wealth of existing information into improved business outcomes. In the meantime, feel free to contact us to learn more about our AI-powered solutions for retailers and CPGs.