The newly released "EY State of Consumer Products" report, based on a survey of 850+ senior executives and interviews with C-suite leaders globally, warns of a widening "decision gap" in the industry. As artificial intelligence (AI) and retailer ecosystems redefine how demand is captured, the report suggests that consumer products (CP) brands are no longer just competing for consumer attention—they are competing for algorithmic visibility within digital platforms.
Urgency vs. Readiness: 71% of executives agree structural disruption makes rapid transformation essential, but only 21% believe they can currently influence algorithmic product recommendations.
Ecosystem Shift: Over 77% of organizations say partnerships with retailers and digital platforms are now central to their go-to-market strategies.
The Decision Gap: Only 11% of organizations operate sales, marketing, and e-commerce as a unified growth engine.
Data Silos: Only 15% of organizations report using fully integrated commercial data to drive cross-functional decisions.
Human-Centric AI: 61% of respondents prioritize human judgment over fully automated AI decision-making, aiming for an "AI-augmented" rather than "AI-replaced" workforce.
Top Barriers: Governance complexity and unclear decision rights (35%) are the primary obstacles to transformation, outranking technology and data foundations (30%).
A critical shift is occurring in the path to purchase: brands are increasingly selected by algorithms before they are ever seen by humans. The report highlights that success now hinges on algorithmic readiness—the ability of a brand to be "agent-ready" for AI-enabled buying journeys. Despite 47% of executives acknowledging that influencing these algorithms will be critical within five years, readiness remains low.
"Growth today looks nothing like it did a few years ago," says Rob Holston, EY Global and EY Americas Consumer Products Sector Leader. "Most organizations are using AI for optimization and not opportunity... opportunity is created by fundamentally designing how commercial decisions are made and connected."
The report finds that the biggest hurdle is not the technology itself, but the organizational structure surrounding it. Fragmentation remains rampant, with disconnected functions preventing the creation of a "unified growth engine." For transformation to succeed, EY suggests that companies must address foundational issues:
Governance: Clarifying decision rights in an ecosystem-based model.
Leadership Alignment: Ensuring the C-suite is unified on the pace of change.
Integrated Data: Moving past siloed demand signals to a cross-functional data loop.
Despite the rapid expansion of AI capabilities, the consensus among CP leaders is that AI should inform, but humans must remain accountable. The "closed-loop" system envisioned by EY involves AI augmenting human speed and consistency while preserving the trust and ethical oversight that only human leaders can provide.
"Value isn't created in sales, marketing or supply chain in isolation," adds Holston. "It comes from the closed loop between them, enabled by the right people, data and governance."
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