Intelligent Revenue Growth B2B

INTELLIGENT REVENUE GROWTH FOR B2B EMBEDDING AI TO REINVENT RELEVANCE THE POWER OF AI

BUSINESS SITUATION CONSUMERS AREN’T BUYING THE STATUS QUO Consumer goods companies are facing new, profound challenges. For incumbents, it is a time of existential crisis. Growth has stagnated. Consumers are engaging and buying in new ways. Digital disruptors are changing the rules of the game. One thing is certain, future growth doesn’t look like the past. Growth is declining for legacy leaders Eighty-six percent of incumbents are averaging revenue compound annual growth rate (CAGR) of <1 percent. Legacy practices—pulling the levers of product, customer, and channels—aren’t reversing the decline. Liquid expectations are raising the bar As digital brands proliferate, they are setting higher standards. Consumers expect rich, highly personalized experiences with no friction—regardless of business or brand. Digital disruptors are stealing category growth The performance gap between digital disruptors, microbrands, and incumbents is growing. As consumer expectations are increasingly shaped by digitally enabled, direct to consumer (DTC) brands, incumbents’ relevance continues to weaken. A digital “earthquake” in retail is imminent Traditional retailers will continue to lose their grip on consumers, as digital disruptors, like Amazon, vie for dominance at the local level. As a result, consumers are in a constant state of re-appraisal, demanding that businesses remain relevant in every micro-moment between sales and service. As market dynamics are increasingly shaped by digital players and startups who are radically customer centric, incumbents are losing their capacity to attract, engage, and retain customers. INTELLIGENT REVENUE GROWTH FOR B2B EMBEDDING AI TO REINVENT RELEVANCE 2

As digital brands proliferate, they are setting higher standards. Consumers expect rich, highly- personalized experiences with no friction—regardless of business or brand. INTELLIGENT REVENUE GROWTH FOR B2B EMBEDDING AI TO REINVENT RELEVANCE 3

KEY TENSION NEW STRATEGIES INCREASE COMPLEXITY AND RISK Acting like a startup is no easy feat for the big players. Incumbents don’t have the luxury that small brands do to organically test-and-learn their way forward. They need to navigate a significant rise in complexity Incumbents in all aspects of their business in order to innovate, need to navigate incubate, and scale with speed, precision, and predictability. Personalization will require real-time a significant rise insights and more digital interactions with customers. in complexity in Customized products will require new manufacturing all aspects of their capabilities. Localization will require many more business in order to stock-keeping units (SKUs). innovate, incubate, To manage the complexity, they need to become and scale with data-driven organizations. They need to gather insights speed, precision, across all functions to identify new opportunities, break silos that produce generic experiences, and and predictability. enable the workforce to work smarter. They need to unify everything from demand generation, to purchase, to servicing. And, they need to do it in a cost-effective manner to unlock capital for continuous innovation. INTELLIGENT REVENUE GROWTH FOR B2B EMBEDDING AI TO REINVENT RELEVANCE 4

INSIGHT MICROBRANDS ARE MODELING NEW GROWTH STRATEGIES Large consumer goods and services (CG&S) brands can learn something from their small, but mighty competitors. Digital disruptors and microbrands are creating new opportunities to grow by getting closer to the customer. To do so, they focus on individual consumers, customizing products, and adapting to local opportunities. They are: • S uper-personal in how they interact – They understand the individual, not a segment, to tailor the portfolio, message, and activation for each and every moment. • Super-granular in how they deliver – They obsessively map the market to localize product and execution, outlet by outlet, aisle by aisle. • I ntelligent and integrated – They leverage data to make decisions and unify operations. In the process, they debunk category myths, create new ideas, and create premium customer experiences. As such, they are reinventing consumer relevance, identifying pockets of growth, and developing new brands, products, and services to fit all needs, occasions, and locations. INTELLIGENT REVENUE GROWTH FOR B2B EMBEDDING AI TO REINVENT RELEVANCE 5

OPPORTUNITY A DATA-DRIVEN, AI-POWERED PATH TO NEW GROWTH Intelligent technologies, like artificial intelligence (AI) Companies will and machine learning, are providing companies with develop a powerful a new capability to harness the power of their data new capability to and master this complexity. retain and expand their They can capture and process vast quantities of data customer base, reduce with great granularity in real time to meet individual costs, differentiate customer needs. AI will enable companies to become hyper-relevant with everything they do. And, it will competitively, and empower them to identify and deliver on countless drive new growth. new growth opportunities. THE INTEGRATION OF AI WILL HELP: Unify across • Diagnose – AI helps leaders rally around the consumer and functions and improve drive integrated efficacy by revealing how actions impact key performance performance indicators (KPIs) across the business, not only within each function. • Prescribe – Algorithmic recommendations have the capacity to “see” beyond interim improvements to predict innovative actions that meet end goals. Discover new • Understand – AI will provide granular insights about opportunities individual consumers by processing vast sets of structured for growth and unstructured data from 1st and 3rd party sources. • Target – AI helps identify micro-segments and priority demand spaces (e.g. new occasions, category sub- segments, and servicing opportunities) to develop new business models, and optimize product, pricing, promotion, and packaging practices. INTELLIGENT REVENUE GROWTH FOR B2B EMBEDDING AI TO REINVENT RELEVANCE 6

Digitize operations to • Automate – AI enables business process redesign by automating most manual, repeatable, and high-volume increase efficiency and unlock working capital activities. And, it learns and optimizes over time to drive ongoing improvements. • Unlock – By pushing more activities down to the execution layer, AI drives margin enhancement, and lowers the cost base to unlock capital for funding the digital business. • Empower – Employees can maximize their time and value by delegating executional tasks to AI, and focusing their energy on analytical and strategic initiatives related to innovation, and competitive differentiation. Create 1:1 hyper- • Sense – AI’s use of unstructured data (e.g. photos, video, relevant experiences audio, etc.) provides new consumer insights by identifying within an integrated individual needs based on their context. ecosystem • Comprehend – Natural language processing will help machines better infer what human communications are intended to convey. • Act – AI creates 1:1 relationships by building experiences in real time, including personalized recommendations, customization, promotions, and value-add services. • Learn – Machine learning enables continuous improvement by understanding and adapting to a consumer’s preferences, intentions, and behaviors across the ecosystem. Using AI to unify around the consumer and reinvent relevance, companies will develop a powerful new capability to retain and expand their customer base, reduce costs, differentiate competitively, and drive new growth. Furthermore, AI will help them set ever-increasing standards of performance by continuously optimizing interactions and transactions—creating a self-perpetuating path to growth. Explore how Accenture is helping clients reinvent relevance and unlock new growth opportunities. Visit www.accenture.com/ai-for-business-transformation INTELLIGENT REVENUE GROWTH FOR B2B EMBEDDING AI TO REINVENT RELEVANCE 7

CONTACT ABOUT ACCENTURE Harsh Kar Accenture is a leading global professional services company, Managing Director, Applied providing a broad range of services and solutions in strategy, Intelligence – Products (CG&S) consulting, digital, technology and operations. Combining [email protected] unmatched experience and specialized skills across more than 40 industries and all business functions—underpinned by the world’s largest delivery network—Accenture works at the intersection of business and technology to help clients JOIN THE improve their performance and create sustainable value for CONVERSATION their stakeholders. With approximately 449,000 people serving clients in more than 120 countries, Accenture drives innovation @AccentureAI to improve the way the world works and lives. Visit us at www.accenture.com. ABOUT ACCENTURE APPLIED INTELLIGENCE Accenture Applied Intelligence helps clients apply new data science and intelligent technology across their business, and into every function, so they can transform their business and achieve new outcomes at speed and scale. Recognized as a leader by industry analysts, the company helps clients create new intelligence using artificial intelligence, machine learning, proprietary algorithms and app-based solutions, all powered by the Accenture Insights Platform. We collaborate with a powerful alliance and delivery network to help clients operationalize within any market and industry with a focus on speed to value. Combining expertise across industries, analytics, technology and design, Accenture is uniquely qualified to drive new business outcomes with precision, at scale. Visit us at www.accenture.com/appliedintelligence. This document makes descriptive reference to trademarks that may be owned by others. The use of such trademarks herein is not an assertion of ownership of such trademarks by Accenture and is not intended to represent Copyright © 2018 Accenture. or imply the existence of an association between Accenture and the lawful All rights reserved. owners of such trademarks. Accenture, its logo, and High This document is produced by consultants at Accenture as general Performance Delivered are guidance. It is not intended to provide specific advice on your registered trademarks circumstances. If you require advice or further details on any matters of Accenture. referred to, please contact your Accenture representative.