Consumer goods companies must embrace AI or risk failure: GlobalData

The reality of adopting AI involves tangible financial and security risks.

Consumer goods companies should grasp the full scope of artificial intelligence (AI) requirements or face potential failures, GlobalData warned.

According to the report, consumer goods firms must quickly accept failure in AI initiatives to comprehend technical, financial, and organisational prerequisites accurately.

It noted that rapid advancement of AI and Generative AI has generated significant hype, yet understanding the costs and benefits of AI applications remains lacking.

“Industry professionals remain bullish about AI’s potential to disrupt numerous industries (including consumer goods),” said Rory Gopsill, senior consumer analyst at GlobalData.

However, he stressed the importance of acknowledging the limitations and risks inherent in AI technologies. 

Gopsill cited instances such as chatbot failures leading to financial and reputational repercussions for Air Canada and DPD in the first quarter of 2024, cautioning against unwarranted AI hype.

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The reality of adopting AI involves tangible financial and security risks, including high training costs and data sensitivity concerns. Failure to address these risks could lead to breaches or project abandonment.

“Consumer goods companies need to be aware of these (and other) risks when choosing to develop AI applications. If they are not, their AI initiatives could fail with serious consequences,” said Gopsill.

Failure to do so could result in detrimental consequences such as data breaches, disproportionate development costs, compromised AI quality, or project abandonment, he noted.

“Fostering a culture of transparency around the risks of AI will help drive industry application and protect consumer goods companies and customers from the potential pitfalls of this evolving technology,” the consumer analyst said.