CPG Partner Conversations: Tredence Helps CPGs Leverage AI/ML Solutions

Consumer packaged goods (CPGs) are transitioning from a post-pandemic surging consumer demand for many products (driving revenues and profitability) to experiencing inflationary pressures (a tightening from the consumer and steep costs). CPG firms are utilizing more data to drive business decisions ranging from marketing, advertising and product innovations. They are using new materials, adding functional attributes, and transforming packaging to meet sustainability mandates to take cost out of products.

CPG firms are looking to build audiences using data clean rooms and measure campaign effectiveness. That’s essential because CPG firms need to optimize spending across all channels where every dollar counts. Ecommerce, which now represents 10% or more of CPGs’ business in the United States, is growing fast. Amazon Web Services (AWS) has seen the use of clean rooms take cost out of marketing operations while still achieving revenue targets through greater productivity and effectiveness.

In the latest installment of our CPG Partner Conversations blog series, we talked to Sagar Balan, Chief Business Officer for Consumer Packaged Goods at Tredence. Tredence is an AWS Partner and as a data science and engineering company Tredence helps CPG organizations to solve last mile challenges with data and artificial intelligence (AI)—capitalizing on emerging technologies like generative AI.

AWS: Help our readers understand your vantage point. What’s the space you play in, and what type of CPG executives are you interacting with?

Sagar Balan: We work with senior leaders charged with transforming the business at eight of the world’s top 10 CPG firms by revenue. We typically interact with C-suite leaders, including CIOs, CTOs, and CDOs; heads of supply chain services, marketing, and growth management; and country managers.

While CPG firms have long competed on product innovation, they can now harness more opportunities to get closer to their customers, improve pricing strategy and execution, and automate the generation of marketing campaigns and concepts. They also seek to mitigate supply chain risks by proactively anticipating them and developing alternative strategies, from sourcing to logistics.

To accomplish these goals, Tredence partners with CPG firms to develop first-party data and use publisher data clean rooms to increase their advertising effectiveness with retail media networks. We provide tools that enable CPG teams to optimize cross-price elasticity across strategic and tactical prices. We implement supply chain control towers (SCCT) so that CPG teams can proactively anticipate disruptions, model impacts, and use optimization engines to select the best alternative. SCCT have been a great funnel for organizations using data-driven decisions to reduce cost, introduce innovative technologies (such as generative AI) and deliver a better customer experience.

Finally, we provide generative AI accelerators and frameworks that CPG firms can put to work to begin driving significant business value with key use cases. For example, the team has been working with Amazon Bedrock to deliver rapid data insights on CPG customers to drive RGM [Revenue Growth Management].

AWS: Many companies across the CPG space have been managing through unprecedented disruption. What have been the biggest challenges your consumer goods customers are facing during this recent period?

Sagar Balan: The pandemic revealed the importance of developing better first-party data and identifying early signals of changing customer demand. CPGs rely on this information to decide where to place product innovation, marketing, and advertising dollars.

Data-driven marketing at scale is the starting point CPGs can leverage to understand how consumers think about solving personal challenges, whether looking for organic and sustainable products, a type of functional performance, quality or price of goods, or more.

Search provides early signals of consumer interest and trends that CPGs can tap into using Amazon Marketing Cloud data and drive decisions such as promotions or Ads. Amazon accounts for 47.9% of all U.S. retail spend, dwarfing its competitors. CPG firms can combine different data from search, social engagement, ratings, and reviews to create deep insights into consumer wants and needs.

Amazon Marketing Cloud data clean rooms enable CPGs to stitch together signals and conversions from different retailers, brick-and-mortar and ecommerce channels, and other sources to build custom audience segments. Amazon Marketing Cloud provides more robust functionality than other retail media networks, including attribution and measurement. CPG teams can optimize marketing campaigns and price and promotion strategies to lower their cost of customer acquisition.

AWS: How do you see CPG firms leveraging AI and machine learning (ML) in response to these market dynamics and changes in consumer expectations?

Sagar Balan: The market is only speeding up, requiring that CPG firms respond faster. At the same time, there is an incredible wealth of information available to CPGs, whether it is first-party data, retail media network insights, or data from alternative sources.

CPG firms are using discriminative AI and ML models, that excel at explicitly learning the decision boundary between different classes, to drive to insight faster, explore different options, and make the best choices. They want to use data models and other accelerators that can be customized and implemented within weeks, providing speed to value.

Now, generative AI promises to unlock more productivity from CPG teams and drive growth by providing digital co-pilots and chatbots to guide work and automate content and imagery creation. CPG teams can use generative AI to create brand and product imagery, develop marketing campaigns and content, and personalize customer imagery and messaging. Imagine shopping on Amazon for your pet and receiving a marketing message that uses your pet’s name and an image that looks just like it. CPG firms will likely explore ways to personalize marketing, while making it privacy-compliant, consumer-friendly, and not invasive.

AWS: The CPG industry is incredibly innovative. What AI and ML use cases do you see CPG firms leveraging to innovate? How do you see technology enhancing the way they make, move, or market their products?

Sagar Balan: Many CPG firms are still exploring generative AI to see which use cases drive the most significant impact for their firms. Beyond branding and marketing, CPG firms can use generative AI to create customer personas and synthetic data for training. They can generate new product ideas; optimize procurement, production, and supply chain processes; and improve equipment maintenance and worker safety. The list is truly endless.

Generative AI can help remove barriers to innovation that have existed before: guiding ideation and digital workflows, providing content and imagery in a just-in-time manner, and enabling continuous improvement. When CPG firms begin operationalizing generative AI capabilities at scale, which they can do with partner accelerators, the pace of innovation will pick up. At the same time, CPG firms will become operationally excellent, using new AI capabilities to out-perform in the market.

AWS: With access to AI and ML and new generative AI capabilities, how is your company working with CPG innovators to leverage these new technologies?

Sagar Balan: Tredence provides end-to-end services for CPGs that want to use discriminative and generative AI to create new business value. We work with CPG firms to prioritize use cases, develop minimum viable products, and then scale. We offer CPG-specific data models and other accelerators, data and LLMOps [large language model operations] architectures, and service catalogs that CPG firms can implement at pace. We also provide MLOps/LLMOps capabilities so that CPG teams can keep their focus on innovation while gaining the peace of mind that their data, analytics, and recommendations are accurate.

AWS: How do you think the CPG industry will look three years from now?

Sagar Balan: The economy is hard to interpret right now. Consumers are pulling back on spending and seeking value with their purchases. As a result, CPG firms are increasing promotions. They’re also accelerating their efforts to create first-party data, responding to regulations that limit what CPG firms can track, store, use, and share.

In this new normal, CPG ecommerce penetration will increase as they develop more first-party data. CPG firms will leverage retail media networks to make their promotion budgets work harder to win and maintain consumer business. They’ll also use supply chain control towers to anticipate and minimize disruptions due to geopolitical and other risks. Finally, CPGs will continue to focus on sustainability, whether bringing new solutions to market, transforming product materials and packaging, or reducing waste.

It seems clear that business disruption is the new normal, and CPG firms need to build the resiliency to navigate fast changes in the market and use them to thrive.

AWS: What makes you excited for the future of CPG?

Sagar Balan: At Tredence, our brand identity and strategy is to go “Beyond Possible.” All of the challenges that CPGs are now facing today seem “beyond possible.” Yet, CPGs are adapting quickly in an era of turbulence, rising to meet the challenge of fast-moving consumer demand, navigating geopolitical risks, creating first-party data, and achieving greater bargaining power with retailers. We partner with CPG leaders and teams to achieve the “beyond possible” for their business.

AWS: Thanks for chatting with us, Sagar. We appreciate your insights and expertise.

We hope you enjoy our blog series. If you have questions for Sagar Balan, Tredence, or AWS, please comment on this blog. To learn more about Tredence, get in touch using their contact page.

Contact an AWS Representative to know how we can help accelerate your business.

Further Reading

• CPG Partner Conversations: GE Digital uses AI to drive energy optimization
• CPG Partner Conversations: AI-powered planning with Anaplan for better business results
• CPG Partner Conversations: Composable commerce leader Spryker – CPG’s future now

PARTNER SPOTLIGHT

At Tredence, we bridge the gap between insights delivery and value realization by enabling last-mile adoption of data science. We do this through speed. Speed to action through accelerators. Speed to action through industry and functional expertise. Speed to scale through deep Data & AI partnerships.