What the 2020 Toilet Paper Shortage Can Teach Us About AI

Erratic consumer purchasing behavior shook the consumer packaged goods (CPG) —things you buy at the grocery store—industry during the pandemic. As buyers grew more concerned about lockdowns and closures worldwide, they scrambled to fill their homes with the necessities.

Post-pandemic, we look back in humor at the bizarre shortages that came about due to consumer panic. Was your home without toilet paper, or did you scramble to find the last few rolls at the grocery store? Frantic consumers upset the rhythms of the CPG industry in 2020, and the fight for toilet paper alone proves that we cannot always predict what consumers will do. Who would’ve thought that toilet paper would be the hottest commodity during a worldwide pandemic centering around an illness that mostly affects the respiratory system?

The landscape of the CPG industry transformed at that moment. After months of shortages and supply-chain disruptions, CPG companies must adapt and generate new ways to meet consumer demand. Fortunately, AI-driven technology expedites this process and helps companies meet consumer demand, cater to consumer concerns, and personalize the consumer experience. 

Anticipate Consumer Demand to the Smallest Detail

CPG companies suffered during the pandemic because they were unable to accurately anticipate consumer demand. This is especially problematic for large-scale companies with thousands upon thousands of products. Artificial intelligence bridges the gap for CPG companies by pinpointing the items consumers want, but the specifics about those items. Leading technology solution employs artificial intelligence to make accurate forecasts about consumer demand, down to various sizes and colors of a single product. This prevents loss and maximizes profits by ensuring that inventory isn’t wasted.

In their , Deloitte predicted that supply chain resilience will be the key factor to success within the industry. The success of the supply chain directly impacts how quickly the product will be in the hands of the consumer, and thus, whether or not the company will be able to meet demand.

With accurate forecasts, made through the help of AI, companies can determine exactly which materials will be required to create the products consumers desire. This specificity creates a stronger supply chain because companies can prepare for demand ahead of time.

AI Makes CPG Sustainable

Consumers want to work with brands that have a value system. In particular, , and it is driving their purchasing power. Consumers want to know which brands care about the environment and are making efforts to ensure sustainability. This is especially true in the CPG industry because consumers consider the effects of their everyday purchases. Forecasting through artificial intelligence automatically builds sustainability into the CPG business model by reducing the number of wasted products. Accurate forecasts ensure that supply meets demand, and waste is minimized no matter the product or season.

Consumers Get Personalized Connection Through AI

Companies already collect data about consumers to maximize the efficacy of marketing efforts, but this is falling short. Consumers now expect personalized recommendations, product launches, and experiences that cater to their unique needs and interests. The market is saturated, but connecting with customers can set a company apart. 

The future of the CPG industry requires that companies invest in personalization for this purpose. Artificial intelligence makes this investment easier. Current artificial intelligence offerings do everything from indexing consumer behaviors on a broad scale to creating personalized profiles automatically as each customer interacts with a brand. This helps companies predict their customers’ future wants and needs—enabling them to handle the supply chain more effectively—and it provides the basis for a targeted marketing strategy rather than overloading customers with content that doesn’t speak to them.  

The 2020 toilet paper shortage demonstrated the shifts happening in consumer demand, in the CPG industry, and beyond. This isn’t new information, but it’s still critical.  Companies must be ready to meet the demand of consumers. If they are not, they will miss opportunities to capitalize on unique moments in society—like the rush to buy toilet paper at the beginning of the pandemic—because they are unprepared. A detailed understanding of consumer demand will help companies reduce waste, meet consumers’ unique needs, and personalize the purchasing experience so that they can generate a loyal customer base.