The AI revolution is here in retail and consumer packaged goods – but it’s only the beginning
16 May 2018
PwC’s Global Consumer Insights Survey (GCIS) is our biggest global consumer survey, capturing the purchasing behaviours of 22,000 consumers in 27 countries. Beneath the macro shifts like the move towards online and mobile shopping, its detailed findings enable us to join the dots and reveal powerful underlying shifts shaping the future.
Two of my colleagues have already written about our latest GCIS – with Lisa Hooker examining the key highlights, and Craig Skelton zeroing in on consumer trust. In this third blog, I turn the spotlight onto a technology that’s moving rapidly into the consumer packaged goods (CPG) and retail sectors: artificial intelligence (AI).
To date, AI’s most obvious impact is in the home, as growing numbers of shoppers start to use ‘voice commerce’ on AI devices to replenish household supplies and groceries. But AI is also being used increasingly by stores to optimise inventory and improve shelving techniques. It’s also starting to revolutionise logistics & delivery, and the ways in which companies profile and segment customers.
In the next two to three years, as these advances gain pace and scale, the industry’s first movers into AI will see major competitive advantages. In light of this, our GCIS 2018 offers valuable insights into how fast AI is gaining ground, and which consumers will be the most likely early adopters of this technology.
So, what does it tell us? Certainly that the outlook for AI devices is promising. While just 17% of UK respondents currently own AI devices – such as robots or automated personal assistants like Amazon Echo or Google Home – 26% say they plan to buy one. And while 58% say they have no interest in owning an AI device, their views are likely to change as they increasingly become the norm, and devices progress from simple voice commands to understanding context and patterns of behaviour.
What’s less clear is how voice commerce impacts sales. Among UK consumers who own an AI device, 56% say they spend around the same amount on shopping as before, while 11% spend more. Twenty-nine per cent say they spend less. So the jury’s out.
But a look at the profile of early adopters of AI devices provides some useful pointers. They’re most likely to be men aged 18 to 34, more likely to shop and pay regularly via their mobile phones, but are less likely to take steps to reduce online security and fraud risks.
That said, a comparison of the UK and global findings by gender reveals some interesting differences. Globally, 9% of female respondents own an AI device, while 27% plan to buy one. In the UK, 19% of women own one and 24% plan to. This puts AI adoption by the UK’s tech-savvy females ahead of their male counterparts – just 15% of whom own an AI device, with 26% planning to.
Looking forward, AI-enabled robots and personal assistants are just one aspect of the revolution looming across retail and CPG. From smart fridges whose contents users can check from the supermarket, to facial recognition technology that automatically offers assistance, to a consumer struggling to choose between brands, to augmented reality previews of furniture in consumers’ own living space – a flood of consumer-focused innovation is already here, and more is coming.
Also, combined with the Internet of Things (IoT), AI is increasingly impacting not only how consumers place orders, but also how retailers fulfil and deliver them. Autonomous vehicles—ground-based robots or aerial drones—are already managing more and more warehousing and logistics tasks. Are consumers ready to have goods delivered by an autonomous vehicle? More on this in our next GCIS blog on delivery implications with Oz Ozturk.
And while AI holds great promise both for consumer brands and retailers, the challenges differ in each case. For CPG companies, the issue is that customer data is largely still owned by retailers. For traditional retailers, it’s how to use AI to enhance customers’ in-store experience and keep them coming back. For e-retailers, it’s concerns over privacy and security.
But for everyone, the key to using AI successfully will be maintaining the human touch. Those who manage to do this will be the winners in the years ahead.
Our next blog in the GCIS series will be on consumer optimism. To read the full research report, click here.
Join our webinar with the British Retail Consortium on 24th May to find out what technological innovations are needed to adapt to a changing retail workforce.