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Why CPG Brands Should Embrace AI-Driven Market Research To Stay Ahead of Consumer Trends


The insights from AI-powered market research keep leaders in the consumer packaged goods space ahead of today’s dynamic customer relationships. Traditional research imposes many challenges, from time-consuming data collection and analysis to labor-intensive channel management. With artificial intelligence–based market research, CPG brands can expect to improve campaign performance while reducing costly, resource-intensive processes. 

One CPG market survey reported a 29% increase in brands using AI for at least one function this year, and that number will only rise as tools become more accessible. Adopting AI isn’t just about leveraging the latest technology, it’s also about giving businesses stronger tools to connect with customers.

Read on to learn more about the benefits of AI-powered research and which tools your CPG brand should consider adopting.

Optimized Marketing Campaigns

According to McKinsey research, CPG companies deploying an AI engine for data-driven marketing experience a 3% to 5% growth in net sales with a 10% to 20% increase in efficiency. Most brands have historically faced challenges in collecting consumer information, especially first-party data, at scale. It would take humans considerable time and effort to form insights from a large volume of cross-channel data that an AI engine can digest and organize in minutes.  

Shoppers are more informed and selective than ever, which means CPG brand marketing must follow suit. Machine learning technology allows companies to understand audience preferences for sustainability, convenience or another virtue for more precise customer segments and management. Tailoring email marketing, personalizing product suggestions and enhancing digital ads for these groups helps campaigns stand out against generic marketing messages. These metrics can also provide insight into the most profitable distribution channels, allowing marketers and automated ad campaigns to allocate resources appropriately.

More Efficient Research Methods

Focus groups and surveys are essential to the CPG industry, and AI can facilitate efforts to help brands understand their consumers. AI’s advanced natural language processing capabilities fuel market research — and because this tech understands colloquialisms, regional dialects and grammatical errors, little is lost in translation.

Brands utilize moderator bots to facilitate online discussions before CPG product launches for more efficient, timely market research. AI-powered tools can assist with questionnaire creation, transcribing audio recordings and other time-consuming tasks. The algorithms also identify patterns and key themes within large data sets to identify connections across focus groups and draw comprehensive conclusions. 

Advanced Product Development and Testing

Shoppers no longer need to purchase items to see how they will fit or look in their homes. CPG brands can harness AI and augmented reality (AR) experiences to improve product testing well before production. Machines monitor virtual try-ons and real-time visualizations to give brands instant feedback on the product or packaging before it hits store shelves.

When designing new consumer goods, businesses can lean on AI to simulate various user scenarios to gain a better understanding of testing and engineering needs. These machines can also validate ideas in the early stages to determine if there’s room in the market for another version. When balanced with human creativity and expertise, AI can help teams streamline the development cycle without sacrificing product or package quality.

Improved Consumer Understanding

AI-based social listening tools grant CPG companies instant access to market research on consumers’ brand perception. Humans can’t scour review sites, social feeds and the web for brand mentions and product reviews efficiently, but AI can effortlessly analyze millions of messages daily. These assistants flag critical communications and interpret tone to conclude whether conversations are positive or negative. 

Keeping an eye on social channels helps companies predict customer desires and inform future product development and marketing decisions. When online conversations shift to affordability, CPG brands can launch promotions or adjust marketing to better communicate product quality. If shopper complaints are on the rise, CPG brands can get ahead of the conversation by launching PR campaigns for damage control or addressing the issue with product improvements.

Proactive Marketing Strategies

Estimating sales and trends isn’t new for CPG brands, but now they can use predictive AI and machine learning to execute these tasks. Forecasting often requires large batches of data that may be challenging for humans to interpret efficiently. AI can track and monitor shifting trends and discover correlations in behaviors to identify emerging customer preferences that humans might have overlooked. This provides CPG brands deeper insights to understand purchase intent and customer churn for strategic acquisition and retention.

Faster Ideation

Humans are perfectly capable of brainstorming, but AI’s ideation capabilities create more ideas and solutions for a given problem in less time, giving a marketing team a significant head start. These bots excel at content marketing topics, email subject lines and social media captions, cutting down resources wasted on repetitive tasks. With data on CPG brand competitors, AI ideation tools can identify content gaps to steer content creation for innovative blog posts and articles.

Tools for AI Market Research

CPG brands should perform AI-based market research using machine learning and predictive analytic tools to review user behavior, consumer preferences and cross-channel purchase decisions — then use that information to develop targeted, efficient campaigns and precise visuals. The 2024 CPG Advertising Outlook Report noted that the two top applications for AI are data analysis (41%) and market research (29%), but the exact tech stack for a CPG brand depends on the company’s needs. 

Market research AI tools for consumer goods offer insights, analytics and consultations within many categories, including:

Industry Evaluation Software

If you don’t have an AI tool for analytical market research, it’s time. CPG brands with the right tech can effortlessly dissect customer behavior and sentiment; competitor activity, patents and strategy; and  emerging industry trends without depleting their human resources. The insights gained through AI go deeper than humans can reasonably explore, and it only takes a few clicks to shift the methodology and metrics.

Customer Prediction Tools

Get answers to what design elements grab customers’ attention and which displays demand a second look with AI-based design analysis. Consumer goods companies embracing AI-powered technology for design optimization can test packaging, marketing collateral and in-store signage before it goes to print. Eye-tracking and sensory technologies analyze consumers’ interactions and perceptions of images, packaging and video, and the tools offer design recommendations to enhance packaging performance.

Retail Analytics Systems

CPG brands with placements in retail stores need to understand consumers’ experiences and interactions with their products. AI-driven video analytics, heat-mapping and customer journey tracking software provide real-time data on packaging visibility, store layout and shopper engagement. Intelligent retail design helps companies optimize their physical presence on store shelves and streamline consumers’ paths to purchasing.

Human Intelligence

There are countless excellent AI tools for market research, and some of the best for CPG brands include Vizit and Tobii Pro for design and packaging optimization, CB Insights and NielsenIQ for competitor and industry trends, and RetailNext for in-store analytics. However, none of these can replace human intelligence completely. 

Most applications relying on machine intelligence possess blindspots and lack a nuanced understanding of a company’s products and values. Also, these aren’t fully autonomous (yet), so marketing teams must have in-house AI specialists to properly configure the systems — or call on ad agencies that specialize in CPG and data sciences. Though these tools will expedite complex processes, interpreting research results and validating risks against the company’s goals requires a human touch that machines haven’t yet mastered.

Big data is growing for brands in the CPG industry, and if you haven’t integrated AI into your processes to get ahead of consumer demands, you may soon fall behind. Our ad agency not only specializes in CPG brands, but we also understand the data sciences needed for efficient marketing strategies. If you’re ready to take command of the CPG market with faster tools and higher intelligence, contact our team today.

Cary

Cary Murphy

Chief Strategy Officer

Cary Murphy is our Chief Strategy Officer at Brandon. He has been in marketing for over 30 years, starting his own agency from scratch and growing it into a market leader. He sold his agency to Brandon in 2016 and joined their leadership team, bringing his expertise to a wider audience. He’s also our category leader for B2B and CPG, working with clients such as Nucor Steel, Wastequip, Green Giant, Idahoan Foods, and Victory Beer. He helps clients create brand stories and strategies that increase sales, boost customer loyalty, and generate media coverage. He doesn’t settle for the status quo or conventional wisdom. He finds hidden connections and patterns and turns them into compelling narratives that resonate with customers. Cary is a smart and inspiring leader who challenges and supports his peers to do their best work. He believes that discipline is more important than motivation, and that good habits are more powerful than goals. Cary is a leader who combines talent, experience, and passion, with something else. A skill that he learned and honed over decades of practice and experimentation. A skill that helps him uncover the remarkable in both people and products.

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