Economic Realities Spark Change In Business Strategies For CPG and Retailers: EY

Supply Chain’s Starring Role 

Supply chain transformation has become a key strategy enabler in recent years. According to the survey, 40% of retail and CPG leaders say creating a more efficient supply chain is a core part of their business strategy, second only to direct-to consumer/omnichannel (42%). 

Another 35% say supply chain resilience in their top three areas to invest most in the next year. When it comes to technology, 21% say digital supply chain is where they plan to increase investment, ranking only behind AI/ML (31%)

Tyson Foods is just one many CPGs and retailers looking to foster a more connected, end-to-end supply chain ecosystem. In a recent conversation with CGT, Adam Clark, Tyson’s VP of IT business shared services,  outlined how it is using control tower capabilities for supply chain logistics and inventory management to generate automated, near-real-time insights that are easy to consume, actionable, and used to fuel decision-making. 

P&G has also worked to expand its collaborative abilities, launching a supply chain services platform for retailers to increase collaboration, sustainability, and competitiveness

GenAI-Driven Growth 

In news that won’t come as much of a surprise, the vast majority (99.6%) of executives say they are experimenting with AI. 

Breaking it down to the use case level, more than 2 in 5 leaders (41%) say their company is implementing AI in the consumer experience through employee virtual assistants. 

Kraft Heinz is one of the most recent adopters of gen AI for this purpose, detailing at NRF 2024 that it is building an internal generative AI app, KraftGPT, for employees to obtain quick insights into product sales. 

CPGs such as Colgate-Palmolive and Johnsonville have also taken strides in developing genAI copilots for their organization.

In addition, almost a third (32%) of respondents say they are implementing the technology for product purchase reminders. 

Unilever is just one CPG giant tapping into similar tools, rolling out a frictionless, digital app that allows retailers to easily stock up on ice cream whenever needed, based on out-of-stock detection, location data-optimized delivery, and real-time inventory insights. 

Of the companies experimenting with GenAI, 29% say they are doing so to remain on the cutting edge of innovation. 

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