The Triple-A Approach: How Retailers and Consumer Product Companies Can Unlock AI Value 

By Romit Bhatia, Associate Partner for Data and Technology Transformation at IBM Consulting

As a retail and consumer product executive, you’ve likely invested significantly in AI capabilities across your organization – perhaps your marketing teams are generating hyper-personalized content, your IT teams are automating code generation, or your HR function is streamlining recruitment. And you undoubtedly have ambitious AI plans on the horizon. In fact, a recent IBM Institute of Business Value (IBV) study, found that retail and consumer products executives expect to expand AI significantly throughout all areas of the business, from brand-defining activities to back-office operations. 

But now the boardroom questions are inevitable: Where’s the return? How do we measure success? Is AI truly driving shareholder value?

You’re not alone navigating these questions. Despite widespread belief that AI will fundamentally transform their business, many retail and CPG leaders struggle to connect AI investments to tangible business outcomes. The challenge isn’t that AI isn’t delivering—it’s that we’re measuring its impact incorrectly.

Moving Beyond Traditional ROI Metrics

For retail, traditional ROI calculations can often miss the mark, failing to capture the full impact of AI on the business. That’s because AI’s influence extends far beyond the bottom line, shaping intangible aspects like customer satisfaction, employee engagement, and brand reputation.

Consider these two real-world examples. One leading consumer product company leverages AI across their entire value chain through a formal Responsible AI framework, a unified technology platform with reusable services, and by fostering an AI-fluent culture through training and responsible practices.  A major retailer is using AI agents to handle live phone calls and chat interactions with customers in their call center operations. These AI agents successfully handle millions of customer interactions at just one-tenth the cost. 

The question isn’t whether AI drives value—it’s how to measure and maximize that value in ways that directly impact your business performance.

The Triple-A Approach: Finding AI Value for Retailers 

To effectively measure AI ROI in our industry, we need a fresh approach. From my experience working with leading retailers and CPG companies, there are three key dimensions of AI ROI that your business should consider: Accuracy, Adoption, and Amplification.

“Embedding AI in your brand’s DNA”, January 3, 2025, https://www.ibm.com/thought-leadership/institute-business-value/en-us/report/ai-retail-cpg

1. Accuracy

This dimension focuses on measuring how precisely AI drives business outcomes that matter to you: 

• Develop specific metrics: Create metrics such as forecast accuracy, recommendation relevance, and error rates. For example, measure how accurately AI predicts demand for products, which can reduce overstock and stockouts.
• Implement regular evaluations: Conduct periodic assessments of AI models to ensure they remain accurate and relevant. This can involve comparing AI predictions with actual outcomes and adjusting models as needed.
• Use real-time data: Leverage real-time data to continuously update AI models, ensuring they reflect current market conditions and consumer behavior.

2. Adoption

This dimension measures how thoroughly AI tools become embedded in your organization’s daily operations:

• Monitor usage metrics: Track the number of users, usage frequency, and feature adoption across different departments. For instance, measure how often dynamic pricing models are used in sales or how frequently personalized marketing campaigns are deployed.
• Encourage widespread use: Promote the use of AI tools through training programs and incentives. Ensure that employees understand the benefits of AI and are motivated to integrate it into their daily workflows.
• Analyze user feedback: Collect and analyze feedback from users to identify barriers to adoption and areas for improvement. This can help refine AI tools and make them more user-friendly.

3. Amplification

This dimension captures how AI enhances capabilities across your entire business ecosystem:

• Assess customer satisfaction: Use surveys, reviews, and social media analysis to gauge customer satisfaction with AI-driven personalized experiences, such as virtual try-ons and tailored recommendations.
• Measure employee engagement: Track metrics related to employee engagement, such as job satisfaction and productivity. Evaluate how AI automation of repetitive tasks allows employees to focus on more strategic activities.
• Monitor brand reputation: Analyze brand sentiment through social media, customer feedback, and market research to understand how AI initiatives are influencing brand perception.

Applying the Triple-A Approach in Your Business

To demonstrate AI’s value to stakeholders and shareholders: 

• Showcase productivity improvements: Demonstrate how AI applications have led to productivity gains, such as automating manual tasks, streamlining processes, and enhancing decision-making. For example, measure the time saved through AI-driven inventory management or the accuracy of demand forecasting.
• Integrate tangible and intangible benefits: Combine metrics from all three dimensions to provide a holistic view of AI ROI. This includes both direct financial impacts and broader benefits like improved customer satisfaction and employee engagement.
• Communicate results: Regularly report on AI ROI to stakeholders, highlighting successes and areas for improvement. Use clear, data-driven insights to demonstrate the value of AI investments.

Next steps for Executives 

Retail and CPG companies stand at a critical crossroads: continue down the path of incremental innovation or seize the opportunity to transform their businesses and unlock new levels of growth. To begin your Triple-A journey:

1. Identify High-Value Use Cases through IBM Garage frameworks that focus on navigating retail and CPG pain points.
2. Explore AI’s potential ROI for your specific business challenges by using specialized retail and CPG assessment tools.
3. Foster a culture of experimentation where you promote a mindset of continuous innovation, where teams are encouraged to explore new ideas and take calculated risks with AI.

If you’re a retail and CPG leader and you want to start seeing meaningful, measurable value from AI investments, it’s time to think differently about success. Learn more about how IBM Consulting can help guide your team.