Why Your CPG AI Initiatives Need Better, Granular Data Now

In the current, dynamic world of consumer goods and consumer packaged goods (CPG), Artificial Intelligence (AI) has moved beyond being a futuristic concept to a present-day imperative for brands of all types and sizes.

From optimizing supply chains to personalizing consumer experiences, the promise of AI is vast. However, for many senior leaders in data, analytics and insights, business intelligence, sales, marketing, and finance, AI initiatives often hit a wall. The promise remains just that—a promise—primarily because the foundational element for true AI power is often missing: granular, accurate retail data.

You've heard the buzzwords: machine learning, predictive analytics, generative AI, LLMs. You've likely invested in data scientists and AI platforms. Yet, if your AI isn't delivering the transformative results you anticipate, it's time to look deeper—into the very fabric of your data. This isn't just about having more data; it's about having the right data, at the right level of detail, and with unwavering accuracy.

The AI Promise vs. Reality in CPG: A Data Deficiency Story

The allure of AI in CPG is undeniable. Imagine:

• Predicting consumer demand with near-perfect accuracy, eliminating costly stockouts and overstocking.
• Crafting hyper-personalized marketing campaigns that resonate with individual consumers, driving unprecedented engagement.
• Optimizing trade promotions to maximize ROI, rather than merely throwing money at the problem.
• Identifying emerging market trends before they become mainstream, giving you a crucial first-mover advantage.

These aren't pipe dreams; they are achievable realities when AI is fed the precise, granular data it needs to learn, analyze, and predict.

The stark reality, however, is that many CPG companies are still grappling with fragmented, siloed, and often inaccurate data. An Infosys study revealed that 61% of CPG companies have either not started any generative AI initiatives or are still in the experimentation stage, with only a mere 4% having generated business value from it. This significant gap between ambition and achievement often boils down to data quality.

Think of AI as a brilliant student. You can provide this student with the most advanced textbooks and the best teachers, but if the core information they're given is incomplete, inconsistent, or simply wrong, their output will be flawed. As a report from Argano aptly states, "Bad data quietly sabotages AI initiatives from the inside out—leading to inaccurate predictions, wasted investments, and lost trust among users."

Common data deficiencies plaguing CPG AI initiatives include:

• Aggregated Data: Relying on weekly or monthly roll-ups of point-of-sale data at a regional or chain level, rather than daily, item-level, store-level sales and inventory.
  
  
• Siloed Information: Marketing data, sales data, supply chain data, and financial data residing in disparate systems, unable to "talk" to each other.
  
  
• Inconsistent Formatting: Retailer data arriving in a multitude of formats, requiring manual cleaning and harmonization—a time-consuming and error-prone process.
  
  
• Missing Data Points: Gaps in historical data, competitive intelligence, or promotional performance.
  
  
• Lagging Data: Insights based on last week's (or last month’s) data, rather than real-time or near real-time information, rendering predictions obsolete before they can be acted upon.

The Granular Difference: Fueling AI with Precision

This is where granular, daily data becomes the true differentiator. Granular data means getting down to the nitty-gritty:

• Daily, item-level sales and inventory data from every single store, for every single SKU.
• Detailed promotional data (start/end dates, mechanics, display types) linked directly to sales performance.
• Competitive pricing and promotional activity at a local level.
• External factors like local weather patterns, demographic shifts, and even social media sentiment, all correlated with specific product performance.

When AI models are trained on this level of detail, their ability to identify subtle patterns, predict nuanced shifts, and generate actionable insights skyrockets. For example, rather than a generic demand forecast for "chocolate bars" in "the Northeast region," granular data enables AI to predict the precise demand for "Dark Chocolate Almond Bars (SKU 12345)" in "Store #789 in Pittsburgh, PA" on a specific day, factoring in local events and competitor promotions.

How Retail Velocity Provides the Granular Foundation for AI

This is precisely where Retail Velocity provides the competitive edge. Our VELOCITY^® retail data platform is purpose-built to tackle the data challenges that hinder AI adoption in CPG. We transform fragmented, messy retail data into a clean, harmonized, and accessible single source of truth, making it AI-ready from day one.

Here’s how Retail Velocity provides the daily granular data essential for unlocking true AI power:

1. Automated Data Ingestion & Harmonization:

• The Problem: CPG companies receive data from countless retailers, distributors, and third-party sources, each with its own format, nomenclature, and delivery schedule. Manually cleaning and integrating this data is a monumental task, consuming valuable IT and analyst time and introducing errors. This "data prep" often accounts for 80% of an AI project's effort, leaving little time for actual analysis.
  
  
• Retail Velocity's Solution: Our VELOCITY^® platform automates the collection, cleansing, harmonization, and normalization of all your retail data – daily POS, inventory, promotional activity, syndicated data, demographic information, weather patterns, and more. We integrate unlimited third-party data streams and internal data (ERP, inventory, orders, shipments, trade spending) to create a unified, consistent dataset. This eliminates data silos and ensures that your AI models are working with a truly "clean, honest, daily data" foundation.

2. SKU- and Store-Level Granularity:

• The Problem: AI's power lies in identifying micro-trends. If your data is only available at a high level (e.g., brand, regional, or chain sales), your AI can only make high-level predictions, missing critical localized insights.
  
  
• Retail Velocity's Solution: VELOCITY^® ingests daily, item-level and store-level supply and demand data from all your retailers. This means you can track the performance of a specific SKU in a particular store, understand local out-of-stocks, and identify hyper-local sales opportunities. This granular detail is paramount for AI algorithms to detect subtle patterns and make hyper-accurate predictions. For instance, an AI model can identify that a specific diet soda sells significantly better in stores near gyms, a micro-trend invisible with aggregated data.

3. Real-Time & Near Real-Time Insights:

• The Problem: In fast-paced retail, last week’s (or last month’s!) data is already old news. AI models need fresh data to provide actionable insights for current market conditions. Lagging data leads to reactive decisions, not proactive strategies.
  
  
• Retail Velocity's Solution: Our cloud-based platform delivers near real-time data accessibility. This constant flow of updated information means your AI models are continuously learning and adapting to the latest market shifts, allowing for dynamic adjustments in forecasting, pricing, and promotional activities. You can spot exceptions and emerging trends much faster than you can with traditional systems.

4. Enabling AI-Powered Use Cases:

• The Problem: Without properly structured and granular data, implementing high-impact AI use cases in CPG becomes a complex, often insurmountable, challenge.
  
  
• Retail Velocity's Solution: Our platform is designed to provide accurate POS and inventory sell-through data inputs for key enterprise applications, machine learning, and AI solutions including:

• • Market Demand Planning: AI-powered demand forecasting thrives on detailed historical sales, inventory, and promotional data. With VELOCITY^®, CPG companies can feed their AI models the precise information needed to predict future demand with unprecedented accuracy, minimizing stockouts and optimizing inventory levels. McKinsey & Company highlights that "digital supply networks are redefining operations by integrating real-time data across the supply chain," which is crucial for improved agility and forecasting accuracy.
    
    
  • Trade Promotion Optimization (TPO): AI can analyze granular data on past promotions (what worked, where, and when) to optimize future campaigns. VELOCITY^® enables AI to analyze the impact of every promotion at an SKU and store level, allowing you to maximize promotional ROI.
    
    
  • Market Mix Analysis: Understanding the true impact of marketing spend requires correlating granular sales data with specific marketing initiatives. Our platform helps AI models precisely attribute sales lift to various marketing efforts, optimizing your overall marketing mix.
    
    
  • Pricing and Promotional Analyses: AI can dynamically adjust pricing and promotions based on real-time competitive moves and consumer demand, but it needs precise data to do so effectively. VELOCITY^® provides this detailed input, allowing AI to recommend optimal price points and promotional tactics.
    
    
  • Hyper-Personalization: While often seen in direct-to-consumer models, CPG can also leverage AI for hyper-personalization, particularly through retailer collaborations and targeted advertising. With granular sales data, AI can identify individual consumer preferences and purchasing behaviors at an unprecedented level, allowing for "a segment of one" approach. For instance, Coca-Cola famously used AI-driven analysis of its Freestyle machine data to identify a popular combination (Cherry Sprite), leading to a new standalone product. This level of insight is only possible with granular consumption data.
    
    
  • On-Shelf Availability: AI, powered by granular inventory and sales data, can detect phantom inventory, zero sales patterns, and potential out-of-stock scenarios, enabling proactive replenishment strategies and ensuring products are consistently available.

The ROI of Data-Driven AI

The benefits of fueling your AI initiatives with granular data are not theoretical; they translate directly to your bottom line:

• Increased Sales: More accurate demand forecasting leads to better stock availability, reducing lost sales from stockouts. Hyper-personalized marketing and optimized promotions drive higher conversion rates.
  
  
• Improved Supply Chain Efficiencies: Reduced inventory holding costs, minimized waste from expired products, and optimized logistics through more precise demand signals.
  
  
• Enhanced Trade Promotion ROI: Maximizing the return on a significant marketing spend by knowing exactly what works and why, store by store, SKU by SKU.
  
  
• Reduced Stockouts: Proactive identification and mitigation of inventory issues ensure products are on the shelves when consumers want them.
  
  
• Optimal Decision Making: Moving from gut-feel to fact-based, data-driven decisions across sales, marketing, supply chain, and finance.

Consider what companies that have successfully embraced data-driven AI are achieving. P&G has reported a 10% growth in U.S. sales, a 17% increase in ROI, and 15% total media savings by leveraging neural networks and proprietary algorithms. Unilever, by utilizing AI-powered predictive analytics, achieved a 30% increase in the success rate of new product launches. These aren't just incremental gains; they are transformative shifts.

Your Path to AI-Powered CPG Excellence

The journey to unlocking true AI power in your CPG organization begins with a robust data foundation. Investing in advanced AI models without ensuring the quality, granularity, and accessibility of your retail data is akin to building a skyscraper on sand.

Retail Velocity's VELOCITY^® retail data platform offers the crucial first step, providing the clean, harmonized, and granular retail data that your AI needs to thrive. It enables your senior-level teams in data, analytics and insights, business intelligence, sales, marketing, and finance to move beyond data wrangling and into strategic decision-making.

Don't let fragmented, aggregated, or outdated data hold back your AI ambitions. The future of CPG is intelligent, agile, and data-driven. Is your data ready to fuel that future?

Discover how Retail Velocity can empower your AI initiatives with the clean, granular data you need for optimal decision-making. Contact us today to learn more and schedule a demo.