While AI will undoubtedly transform the tech world, it will also have an impact across a variety of industries and have a lasting effect on the stock market itself, contends an article in Barron’s.
Among the wide array of industries AI will transform are consumer staples, with some of those changes already happening, wrote Jefferies analyst Kevin Grundy in a recent note that is cited in the article. Large caps are already investing in “key areas…including digital, supply chain, and advertising and promotional spend optimization,” Grundy portends, with companies adopting AI tech at a rapid pace while those that aren’t could “risk falling behind.” Of course, larger companies have more money and more resources to invest in AI and pour money into projects to harness its capabilities. But AI offers such a wide range of possibilities that companies that choose to ignore it do so at their own peril.
AI could also transform how consumers interact with different brands, offering more intricate and personal virtual try-ons for online shoppers. The technology may also improve targeted marketing techniques, using a shopper’s browsing history to give highly personalized recommendations and promotions. Companies will be able “to offer deals to increase chances of conversion when, for instance, a consumer leaves an aisle without making a purchase or takes an item out of a digital cart,” Grundy writes, according to the article. As AI tech advances, companies will be able to understand consumers’ needs better, which will in turn result in higher sales. AI will also improve operations and inventory management overall, especially at production facilities, leading to a reduction in the kind of supply-chain issues that have plagued businesses since the pandemic.
Consumer staples companies that have been the most forward-thinking in their adoption of AI include Procter & Gamble, Molson Coors Beverage, Constellation Brands, Hostess Brands, Estee Lauder, and Ulta Beauty, as well Church & Dwight, Celsius Holdings, Mondelez International, Lamb Weston Holdings, and BellRing Brands, the article highlights.