1.2 AI adoption-in-action use cases Within consumer industries, the environment is highly dynamic as companies explore the possibilities of AI technologies. However, each company is on its own unique journey of AI-driven transformation. Many are actively identifying opportunities to demonstrate proof points for positive business impact, including return on investment (ROI). Others are raising the bar on innovation, enhancing consumer engagement through hyper-personalization and improving customer service operations. In the retail sector, some are uncovering high-potential new revenue streams. The following are just a few examples of adoption in action: Navigating the early stages of AI adoption Many companies struggle with fragmentation in their AI efforts, launching numerous uncoordinated initiatives without aligning them with a strategic vision. To overcome that challenge, some have established an AI task force or AI leadership office, responsible for mapping the AI transformation journey, identifying priority applications, creating employee training frameworks and ensuring responsible adoption. Mexican retailer Coppel developed an AI capability framework to kickstart its transformation journey. The framework helps executives identify use cases to prioritize in areas including supply chain management, retail operations, customer service and credit risk assessment. By mapping the impact of 185 AI technologies and tools against 160 retail and financial services sub-domains, the company continuously evaluates the pace of AI evolution and its domain impact. This analysis is then transformed into AI application agendas that inform business decisions, identify synergies and ensure a structured, long-term approach to AI implementation. Research and development Combined technologies and unique partnerships are already demonstrating significant potential for value delivery – making innovation faster and better. GenAI is accelerating the time to market for early adopters in consumer goods by 25-50% within the R&D functions. For instance, Unilever is revolutionizing its research and development (R&D) by collaborating with Microsoft to transform material discovery, ingredient formulation and product development while drastically reducing timelines and unlocking new possibilities for consumer goods innovation. Microsoft’s Azure Quantum Elements is accelerating the scientific discovery process by combining advancements in high-performance computing, AI and, in the future, quantum computing. This allows Unilever scientists to analyse vast numbers of molecules, optimize ingredient ratios, predict outcomes using simulations rather than physical manufacturing and enable cost-effective innovation.11 Nestlé is revolutionizing product innovation with a proprietary genAI-based tool that presents a range of concepts in a little over a minute, drawing on information from more than 20 Nestlé US brands and real-time market trends. The tool has accelerated Nestlé’s product ideation process from six months to six weeks.12 Marketing Some businesses are also using “synthetic consumers” (digital twins) to test new propositions and accelerate time to market. Meanwhile, beauty company L’Oréal is among those businesses using AI to develop and deliver new customer experiences. L’Oréal is using advanced science, data, AI and genAI to connect more personally with customers and deliver innovations that anticipate each customer’s needs. In doing so, the company is shifting its mantra from “beauty for all” to “beauty for each”. This move is enabling the company to develop a host of augmented products, smart devices, mobile apps, online platforms and digital services, from new AI-powered assistants and diagnostic tools to handheld devices that help people enjoy salon-quality hair colouring at home.13,14 Sales Mumbai-based Welspun Living, a flagship company of Welspun World and a global leader in textiles and home solutions, has optimized its sales operations by integrating AI-powered tools and real- time data platforms to boost distributor and dealer performance across its over 20,000 retail stores in over 500 districts across India. A centralized data platform now aggregates sales data and synthesizes key performance indicators, enabling sales teams, field managers and regional leaders to monitor performance and provide targeted recommendations. Mobile applications equipped with AI-driven algorithms further enhance the process by analysing photographs of store shelves to evaluate product placement and visibility. This analysis assesses Welspun’s shelf share against competitors, helping the company improve brand visibility and optimize marketing investments. As Puesh Rajiv Ajmani, President and Global Chief Digital Officer of Welspun Living, explained, “These insights have driven a 7-10% increase in top-line revenue for distributors and dealers within just a few months, showcasing the success of Welspun Living’s digitally enabled sales strategies.”15 AI-derived insights have driven a 7-10% increase in top-line revenue for distributors and dealers within just a few months. GenAI is accelerating the time to market for early adopters in consumer goods by 25-50% within the R&D functions. Transforming Consumer Industries in the Age of AI 11

Transforming Consumer Industries in the Age of AI 2025