Australia’s Consumer Goods Leaders Prioritize AI Amid Economic Woes
▼ Summary
– 85% of Australian consumer goods leaders say AI agents will be essential to compete within two years, with 83% expecting them to boost sales.
– 99% of Australian CG leaders cite economic policy shifts like tariffs as impacting their sourcing, operations, and margins.
– Only 41% of trade promotions in Australia deliver positive ROI, but AI-driven personalized offers outperform loyalty programs by nearly 15 percentage points.
– 59% of Australian CG leaders find it harder than ever to maintain consumer loyalty, with 74% of consumers switching brands in the past year.
– Companies in Australia are increasing investment in personalization (67%) and boosting spend on social media (63%) and digital ads (51%) to connect with customers.
Facing a challenging economic climate, Australian consumer goods companies are aggressively adopting artificial intelligence to secure growth and maintain a competitive edge. Recent data indicates that over half of the sector’s leaders believe achieving profitable growth has become significantly more difficult. In response, a decisive 85% are convinced that autonomous AI agents will become indispensable for competition within the next two years, with a similar proportion expecting these systems to directly increase sales.
The industry is grappling with volatile consumer confidence, complex distribution networks, and diminishing returns from conventional strategies. This environment makes effective customer engagement more critical than ever. Nathan Alexander, CIO of McPherson’s, notes that the findings validate their approach of using social engagement to build brand awareness and enable more tailored messaging. He explains that by leveraging a unified technological ecosystem, they are deploying Agentic AI to enhance productivity, speed up decision-making, and accelerate value creation, ensuring their brands forge deeper consumer connections while achieving solid commercial results.
For these business leaders, AI represents both their primary challenge and their most significant opportunity this year. The conviction in AI’s potential is strong, with 89% of Australian leaders anticipating increased corporate investment in AI agents. Beyond simply driving sales, these tools are expected to revolutionize creative functions, from designing and optimizing trade promotions to developing new products, effectively positioning AI as a dual-purpose engine for both profitability and innovation.
Jane Brown from Salesforce ANZ observes that the message from the industry is unambiguous. With customer loyalty becoming increasingly fragile, businesses must act swiftly to integrate AI agents to stay relevant. She emphasizes that Agentic AI is poised to be a cornerstone for Australian enterprises as they overhaul customer service models and empower internal teams to deliver sophisticated, modern shopping experiences.
External economic pressures are also taking a toll. An overwhelming 99% of Australian consumer goods leaders report that shifts in economic policy, such as new tariffs, are adversely affecting their sourcing, operations, and profit margins. Companies are reacting by altering their supply chain strategies, redesigning product packaging, or moving operations. While raising consumer prices is generally seen as a last resort, mounting margin pressures may soon force their hand.
The profitability of traditional trade promotions has largely stagnated, presenting another hurdle. In Australia, only 41% of these promotions yield a positive return on investment, suggesting that old methods may have reached their limit. However, a promising alternative has emerged: AI-driven personalized offers. This data-centric tactic is delivering the strongest results of any promotion strategy, outperforming traditional loyalty programs by nearly 15 percentage points.
After years of rapid expansion, growth through Direct-To-Consumer channels and loyalty programs is slowing. A majority of leaders find it harder than ever to retain consumer loyalty, a fact underscored by data showing 74% of consumers switched brands in the last year. As the customer journey fragments across an ever-growing number of channels, brands are pivoting towards personalization, social media, and AI to connect with customers more effectively.
This strategic shift is reflected in budget allocations, with 63% of Australian companies increasing their social media spend and 51% boosting digital advertising. Furthermore, 67% of leaders are investing more heavily in personalization technologies. According to Michelle Grant of Salesforce, the era of relying on broad price increases and generic promotions is over. Success now demands precision—harnessing data, strategic trade promotions, and agentic AI to transform every stage of the supply chain into a revenue-generating opportunity.
(Source: ITWire Australia)
