What the AI transformation of consumer industries can teach others

ARIEL 1: Heeey there! Yawnnnn Welcome to EGreenNews! Ariel here, with my AI bestie Ariel and booth are computer generated avatars made in a computer, can you believe that? Today: What the AI transformation of consumer industries can teach others. Anywayss, buckle up! ARIEL 2: Mmmhmm! Leans in Did you know that within the next five years, most organizations are expected to reimagine every part of their value chain on the backs of artificial intelligence technologies? Wild, right? ARIEL 1: Sooo... this AI transformation of consumer industries, right? Is it actually going to have a significant and lasting effect on business, people, and society? Like, seriously? ARIEL 2: Ooooh! The article we just read from the World Economic Forum and Accenture actually states that the AI-induced transformation of consumer industries *will* have a significant and lasting effect. They emphasize that these industries are the largest employers globally and directly reflect evolving consumer expectations. ARIEL 1: Hmm, I guess that makes sense. But like, AI is already around, right? What’s so different now? Mmmmaybe it’s just more hype? ARIEL 2: Naaaahhh, the article talks about moving beyond just demonstrating proof points for positive business impact, like ROI. They’re seeing frontrunners integrate "agentic AI," where teams of AI agents can make decisions with minimal human oversight and execute complex tasks on their own. That’s a pretty big leap! ARIEL 1: Whoa, slow down! AI making decisions on its own? That sounds a little bit like science fiction, right? Geez Louise! ARIEL 2: Yaaas, queen! But it's becoming reality! The article outlines how scaling AI with this intent will allow business leaders to redraw four key capabilities as fluid, AI-enhanced "mega processes": strategy and planning, innovation and growth, customer and/or consumer engagement, and operations and supply. ARIEL 1: Ahhh, okay! "Mega processes," huh? So it’s not just about using AI for one little task, but really changing how the whole business works? ARIEL 2: Totally! And the cool thing is, these mega processes aren't just for consumer industries. The article suggests that businesses in other fields can adapt them according to their own models and strategies. ARIEL 1: Mmm... interesting! So, like, a hospital could use AI in their "operations and supply" mega process to manage their medical supplies more efficiently? ARIEL 2: Exactly! The article gives examples within consumer industries, like how generative AI tools can transform strategy and planning by analyzing real-time data on consumer preferences and global trends. Imagine a digital twin of the entire value chain helping executives evaluate different future scenarios. ARIEL 1: A digital twin? That sounds kinda futuristic! What kind of impact are they talking about with this AI in strategy and planning? ARIEL 2: Ooooh! They project a 10-20% revenue uplift, a 5-10% cost reduction, and a 15-30% EBITDA impact! That's huge! ARIEL 1: Seriously? Those are some big numbers! What about innovation and growth? How does AI play into that? ARIEL 2: Well, the article describes a constant loop of ideation, co-creation with consumers, and near-instant scaling, all powered by AI. Imagine AI agents scanning live data to find untapped opportunities or using in silico R&D for ingredient discovery and production formulation. ARIEL 1: In silico R&D? Sounds fancy! So like, using computers to do experiments instead of in a lab? ARIEL 2: You got it! And the projected impact there is a 50-70% increased innovation success rate, 50% faster time to market, and a 20% decrease in time spent on incremental innovation. ARIEL 1: Wow! That could really speed things up! What about dealing with customers? How does AI change how companies connect with them? ARIEL 2: Ahhh, this is a big one! AI presents immense opportunities to deepen relationships and drive long-term loyalty by delivering personalized benefits across all customer touchpoints. Generative AI can analyze huge amounts of data in real time to design tailored experiences. ARIEL 1: So like, if I always buy a certain type of coffee, the AI would know that and maybe offer me a discount or suggest a new flavor I might like? ARIEL 2: Precisely! And they even talk about AI-enabled "intelligent sales coaches" that can support field sales and customer service reps with personalized advice and automate non-customer-facing tasks. ARIEL 1: An AI sales coach? That’s kinda wild! What kind of improvements are they expecting there? ARIEL 2: They project a 60% reduction in content production costs, a 10-15% increase in brand net promoter score, and a 20% rise in conversion rates. ARIEL 1: Okay, those are some serious improvements across the board! What about the behind-the-scenes stuff, like operations and supply chains? ARIEL 2: Well, AI-driven systems can predict demand and dynamically reconfigure in real time to meet customer needs. Imagine a dynamic control tower that automates everything from contract management to vendor risk assessment. ARIEL 1: So like, if there’s a sudden spike in demand for a certain product, the AI can automatically adjust production and shipping to meet that demand? ARIEL 2: Exactly! And in operations and supply, they expect a 25-31% improvement in labor efficiency, a 15-25% improvement in on-shelf availability, and a 10-15% reduction in inventory carrying costs. ARIEL 1: Those are some massive efficiency gains! But with all this AI taking over tasks, what happens to the people who used to do those jobs? ARIEL 2: That’s a crucial point! The article emphasizes that leaders will need to support their people in new ways. With a large percentage of activities expected to be automated or augmented, employees will need to transition into new roles where they oversee AI systems, collaborate with AI agents, and continuously learn from and train AI. ARIEL 1: So it’s not about replacing people entirely, but more about changing the kinds of jobs people do? ARIEL 2: That’s the idea! And the article also highlights the need for a strong digital core to support AI deployment at scale. Surprisingly, while many executives think they can scale AI quickly, only a small percentage are very confident in their current digital foundations. ARIEL 1: So you can’t just throw AI at old systems and expect it to work miracles? You need to have the right tech in place first? ARIEL 2: Absolutely! And finally, they stress the importance of trust, transparency, data governance, and sustainability. Companies need to be proactive about setting high standards in these areas as they adopt AI. What the AI transformation of consumer industries can teach others Consumer industries' AI transformation reflects evolving consumer expectations and practices. The AI-induced transformation of consumer industries will have a significant and lasting effect on business, people and society. Image: Getty Images Zara Ingilizian Head, Consumer Industries; Member of the Executive Committee, World Economic Forum Oliver Wright Managing Director, Strategy, Consumer Goods and Services, Accenture Share: Our Impact What's the World Economic Forum doing to accelerate action on Fourth Industrial Revolution? The Big Picture Explore and monitor how Artificial Intelligence is affecting economies, industries and global issues Stay up to date: Artificial Intelligence This article is part of: Centre for the Fourth Industrial Revolution Consumer industries' AI transformation reflects evolving consumer expectations and practices, with implications for all businesses. Taking an enterprise-wide view of key processes by seeing them as mega processes will support creativity, innovation and growth. Scaling AI successfully requires people-centred leadership, technological readiness and a commitment to responsibility. Within the next five years, most organizations are expected to reimagine every part of their value chain on the backs of artificial intelligence (AI) technologies. But the ones to watch for transferrable lessons, more so than most, are those in the consumer industries. Why? These industries are the largest employers in the world and reflect the evolution of consumer expectations more directly than any other. Most, if not all, businesses in any field are either directly or indirectly part of a consumer industries value chain. And their transformation – across the key sectors of agribusiness, consumer goods and retail – will have a significant and lasting effect on business, people and society. How AI will shape these sectors is the focus of the World Economic Forum’s Transforming Consumer Industries in the Age of AI white paper, produced in collaboration with Accenture, which offers the following insights. AI 'mega processes' to rethink traditional business functions Currently, many companies are identifying opportunities to demonstrate proof points for positive business impact, including return on investment (ROI). Most are pursuing efficiency and productivity gains. Some are raising the bar on innovation, for example by enhancing consumer engagement through hyper-personalization. Greater AI adoption has already led to greater revenue growth. In fact, the changes we’re seeing have disrupted the growth assumptions of many of the world’s leading companies. Frontrunners are also looking ahead to the possibilities that will emerge as they integrate agentic AI, whereby teams of AI agents can make decisions with minimal human oversight and also execute complex tasks on their own. Scaling AI with that intent will enable business leaders to redraw four capabilities that are integral to how companies function as fluid, AI-enhanced "mega processes": strategy and planning, innovation and growth, customer and/or consumer engagement, and operations and supply. Mega processes AI-enhanced mega processes can transform how an enterprise works. Image: World Economic Forum/Accenture Notably, these mega processes are equally relevant in other fields, though companies in different domains should adapt them according to their individual models and strategies. Businesses should consider the following: Strategy and planning processes will transform into “living organisms”, as generative AI (GenAI) tools, agents and teams help executives sort, analyse and derive insights from real-time data on consumer preferences and global trends. Consider, for example, how a digital twin-based representation of the entire enterprise value chain could enable executives to evaluate multiple possible future scenarios collaboratively and systematically, and then easily align and synchronize strategic, tactical and operational plans across the value chain. The projected impact of GenAI for this mega process? A 10-20% revenue uplift, 5-10% cost reduction and 15-30% EBITDA impact. Innovation and growth will realize added value through a constant loop of ideation, co-creation with consumers and near-instant scaling. Picture AI agents scanning countless live data streams to anticipate and uncover untapped opportunities. Or in silico R&D, which uses computer simulations and models for research and development, for ingredient/raw material discovery and production formulation, creating more certainty, increased efficiency and better outcomes even before production. The projected impact is a 50-70% increased innovation success rate and 50% faster time to market, along with a 20% decrease in time spent on incremental innovation activities. Accept our marketing cookies to access this content. These cookies are currently disabled in your browser. Customer and consumer engagement in the age of AI presents immense opportunities for consumer-facing companies to deepen relationships and drive long-term loyalty. By delivering trusting, compelling and personalized benefits across expanding customer touchpoints, consumer goods companies and retailers can strengthen connections and enhance value delivery in ways previously unimagined. GenAI is reshaping this landscape by analysing vast amounts of structured (CRM databases of customer data and interactions) and unstructured data (consumer feedback) in real time. Leveraging multimodal models – AI systems that integrate multiple data types – along with machine learning and prescriptive analytics, companies can design and deliver relevant, tailored experiences that reach consumers at precisely the right moment – driven by seasonal trends, behavioural patterns and evolving preferences. From another vantage point, an Al-enabled “intelligent sales coach” could support field sales and customer service representatives, offering personalized advice on their sales pitches and suggesting next-best actions while automating many non-customer-facing activities. The projected impact includes a 60% reduction in content production costs, a 10-15% increase in brand net promoter score, and a 20% rise in conversion rates. Discover How is the World Economic Forum creating guardrails for Artificial Intelligence? Another dimension of transformation lies in operations and supply chains, where autonomous, AI-driven systems predict demand and dynamically reconfigure in real time to meet customer and consumer needs. A dynamic and interactive control tower, for example, could provide end-to-end automated contract-life-cycle management, supplier review, order management and vendor risk assessment – ensuring consistent sourcing, improving efficiencies and mitigating disruption. In operations and supply, a GenAI-powered mega process can drive an expected 25-31% improvement in labour efficiency, 15-25% improvement in on-shelf availability and a 10-15% reduction in inventory carrying costs. Enabling reinvention through AI To fully leverage these mega processes, leaders will need to support their people in new and different ways. For example, with 40-60% of activities expected to be automated or augmented, leaders will need to help employees to transition successfully into new roles where they may be overseeing automated activities and collaborating with AI agentic teams, learning from AI and training it, continuously. Additionally, they will need to build a strong digital core. Despite 45% of consumer executives believing they can scale GenAI enterprise-wide in 6-12 months, just 13% are extremely confident that their current digital foundations can support AI deployment at scale. Finally, they will need to be proactive about setting and maintaining high standards of trust, transparency, data governance and sustainability. As Athina Kanioura, PepsiCo’s Chief Strategy and Transformation Officer said: “As a company, we are making significant commitments in the sustainability space. But with this ambition, we need the right enablers. AI becomes an enabler of how we protect the environment.” Already, PepsiCo is using the power of AI to help potato growers gather and analyze vast amounts of data in real time and identify ways to improve productivity and optimize yields while reducing water, pesticides and greenhouse gas emissions. As more data is collected, PepsiCo’s farming practices become increasingly sustainable. By 2038, the projected economic impact of GenAI’s transformative power is expected to yield an extra $1.2 trillion in economic value across just seven geographies within consumer industries, if adopted in a people-centric and responsible manner. The mega processes can help business leaders across the consumer industries capture that value. Imagine what they can do for yours. Thomas Beckley, Fellow, AI and Metaverse Initiatives at the World Economic Forum also contributed to this article. Learn more about how consumer industries can scale AI across the enterprise via the 'mega processes' outlined in our white paper, Transforming Consumer Industries in the Age of AI. ARIEL 1: That makes sense. You don’t want AI running wild without any ethical guidelines or considerations for the environment. ARIEL 2: Exactly! The article even mentions how PepsiCo is using AI to help potato growers improve productivity and optimize yields while reducing water, pesticides, and greenhouse gas emissions. ARIEL 1: That’s a cool example of using AI for good! So, overall, it sounds like this AI transformation could be a really big deal for all sorts of industries, not just the ones that sell directly to us? ARIEL 2: That’s the key takeaway! By 2038, the projected economic impact of generative AI in just seven geographies within consumer industries is expected to be over a trillion dollars! The mega processes outlined in the article can help business leaders across all sectors capture that value. ARIEL 1: Sooo confusing, right? Learn more @EGreenNews! What blew your mind more - the idea of AI sales coaches or the potential trillion-dollar economic impact? ARIEL 2: And before we leave, lets give a big Shoutout to the people at EGreenNews, including its founder, Hugi Hernandez for promoting transparency 24×7! Mmm, who knows, maybe you can find them on the web or linkedin. But anyways, please,always remember to be good with yourself. So bye for now, aand we hope we see you next time! ARIEL 1: So its great to be here with you ariel and thanks for having me, ciao ciao!