Exclusive Interview with Henrique Aveiro, Director of Machine Learning/AI, Insite AI
by Analytics Insight
August 31, 2021
Major disruptive technologies such as AI and machine learning are known for disrupting different sectors across the world with smart functionalities for human employees. These cutting-edge technologies created a massive impact, especially the post-COVID-19 pandemic in the retail industry. Companies have started leveraging AI and machine learning to revolutionize category management for improving the consumer-packed goods (CPG) managerial ecosystem.
Here is an exclusive interview with Henrique Aveiro, Director of machine learning/AI, Insite AI where he explained to the readers how the company is focused on offering customized AI solutions to disrupt the CPG category management with strategic planning.
Kindly brief us about the company, its specialization and the services/solutions that your company offers, and how your customers get value out of it.
Insite AI is a provider of highly customizable AI solutions for CPG category management and revenue growth management. The company works with the Top 100 CPGs and consumer brands in the U.S. including Nestle Purina, The Boston Beer Company, and R.J. Reynolds, among others, to provide autonomous, completely explainable decision-making, and optimization for the most competitive assortment plans, trade promotions, and pricing possible.
Powering this solution is a proprietary AI platform that provides transparent, predictive data and analytics with tangible, explainable recommendations with granularity down to an individual SKU on a shelf in a single store location. Insite AI is a customizable, end-to-end, cloud-based platform, therefore, it helps CPG brand leaders to make data-informed, strategic decisions that help maximize profitability and strengthen relationships with their critical retail partners.
Can you explain the historical pitfalls around AI/ML solutions in the CPG industry? Where have been the biggest gaps inhibiting success?
For years, the CPG industry and its category and assortment managers made decisions through a combination of planning software, manual analyses, and years of historical knowledge and gut instinct. The majority have continued to rely on these methods, either because they are skeptical of more sophisticated technology like AI and ML or are limited by overall buy-in from the C-Suite to adopt new methods that won’t always demonstrate immediate value.
Much of that skepticism has been driven by empty promises of what AI can really do. For many CPGs that have actually leveraged AI, the majority have used off-the-shelf technology that’s essentially given them a one-size-fits-all approach. More often than not, these— what are known as “black box” solutions— are rigid, limited in capability, and are ultimately inefficient in empowering CPG executives with rich intelligence and recommendations to make the most informed decisions for their businesses. Lacking a customized, purpose-built solution that’s unique to each of their own brands and specific needs, the results have unfortunately been subpar and disappointing. So, the industry continues to rely on cyclical data and educated guesses that could otherwise be significantly elevated if transformed using a more tailored, advanced technology approach.
What can AI/ML really do for CPG brands if implemented and used correctly? What are the biggest benefits?
For CPG brands, one of the most important elements to their business is strategic planning. Whether that’s in terms of shelf optimization, assortment, pricing, promotions— each change they make has a potential direct impact on end results. While things like planograms and older software may have at one point been helpful in guiding their decisions, the landscape has become increasingly challenging to navigate amidst ever-shifting consumer behaviors, disrupted supply chains, and shorter windows for decision-making than ever before.
If used correctly, AI can not only funnel and analyze billions of data sets to show key industry trends, insights, and forecasting— it can actually make smart recommendations on what to do with that data once unlocked. It can therefore rid CPGs of guessing and provide an accurate view of opportunity or risk, generate predictive recommendations in real-time, gain intelligence on how products will sell at specific stores and the downstream effects of decisions like adding or removing products (SKUs), and understand how competitor product changes will affect overall demand.
In order to be successful though, stakeholders should be asking three important questions to vet AI solutions upfront and ensure that they’re leveraging the best option for their brand:
1. Is the solution specifically designed for price and assortment optimization?
2. Is this going to help solve my particular business problems?
3. Will this protect the intellectual property which serves as my company’s strategic competitive advantage?
After asking these questions, companies should also make sure that they’re choosing the right solution provider to partner with to help analyze and understand the data that they’re seeing. Without the proper collaboration, these solutions end up being more expensive, challenging and deliver poor results.
How does Insite AI address these challenges directly for your customers?
The key fact for the company is that it is not just about a software platform, the team combines deep CPG and AI subject matter expertise with a collaborative approach for customers. Insite AI provides a solution that is built within their own secure environment using their organizational, market, and customer DNA. The platform analyzes billions of data points to simulate possible primary and downstream effects from every proposed change to the product range, space trade-offs, pack configurations, changing prices, or offering trade promotions, among other options in long-range innovation and strategic planning.
How is AI/ML evolving today in the industry as a whole? What are the most important trends that you see emerging across the globe moving forward?
While the world has emerged from 2020 and started to experience some semblance of previous “normalcy” – the reality of supply chain disruption, commodity shortages, inflation, and evolving shopper behaviors is still being felt across the globe and has continued to pressure CPGs and retailers alike. Having technology that improves operations, streamlines processes, cuts costs, and strengthens decision-making through data and analytics will be central to success, and emerging technology like artificial intelligence and machine learning will only become more essential to the process as the industry moves forward.
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