Case Study: Personalizing the Beverage Experience through AI at Diageo

Background

Diageo, the London-headquartered global drinks giant, has been venturing into the realm of digital innovation to create personalized consumer experiences. With Benjamin Lickfett at the helm of digital breakthrough innovations, the company has explored the potential of artificial intelligence (AI), sensory data, and other emerging technologies to create unique customer engagements across various channels, including e-commerce and physical stores. From personalized whisky selection to digital gifting, Diageo’s approach is a blend of creativity, technology, and customer-centricity.

Key Takeaways

  • Diageo leverages AI to provide personalized experiences, matching consumer preferences with products through the “What’s Your Whisky?” selector.
  • Through implementing digital technologies in various channels, including e-commerce, on-shelf displays, and visitor centers, Diageo enhances customer engagement.
  • By acquiring Vivanda, a technology company, Diageo aims to expand sensory data and machine learning across all beverage categories.
  • With a focus on responsible innovation, Diageo ensures that new technologies add value and do not reflect biases.
  • Diageo looks toward the future with a keen interest in exploring opportunities in co-creation, 3D printing, and personalized digital overlays.

Deep Dive: Personalizing the Beverage Experience through AI at Diageo

Approach

Diageo’s approach to AI is centered on delivering value-adding, rewarding experiences for consumers. The company believes in a “think-big, start-small” strategy, focusing on consumer-led innovation while running smaller experiments to gain insights and confidence in new technologies. AI is seen not just as a tool for personalization but also as a way to enhance inclusivity and reduce creative bias in design.

Implementation

One of the standout implementations is the “What’s Your Whisky?” platform, using sensory data technology by Vivanda to create personalized flavor profiles. The technology was initially used as an e-commerce tool before being integrated into physical retail spaces and visitor experiences. Additionally, AI was employed for ad formats and ad creation, optimizing media placements.

Results

The results of the AI implementations have been promising. The whisky selector has not only engaged novices but also attracted experts, leading them to try products they might not have considered. The technology has been lauded for its accuracy and value addition, giving new consumers the confidence to explore Diageo’s broader portfolio. It has also paved the way for cross-selling and upselling, powered by data-led insights.

Challenges and Barriers

Despite the successes, there are challenges and barriers that Diageo must navigate. Ensuring that innovations are genuinely consumer-led and value-driven is a complex task. In the field of AI, there is a need to understand and control inputs to avoid reflecting biases present in the web data. The company recognizes the excitement around AI but also acknowledges the need to tread carefully and responsibly, maintaining brand equity.

Future Outlook

Looking forward, Diageo’s focus on AI and related technologies is likely to expand. The acquisition of Vivanda demonstrates a commitment to building capabilities around sensory data and machine learning across various categories. Interest in areas like co-creation, 3D printing, and digital overlays points to a future where personalization and community involvement will play a central role in product creation and design.

Conclusion

Diageo’s journey with AI exemplifies a forward-thinking approach to leveraging technology for consumer engagement. By blending innovative solutions with responsible practices, the company has created personalized experiences that resonate with both new and seasoned customers. The case of Diageo demonstrates the power of AI in enhancing the consumer experience, with careful consideration of ethical implications and a clear vision for future growth. The integration of AI into Diageo’s strategy represents a significant step in digital transformation, showing how traditional industries can embrace cutting-edge technologies to build connections and create competitive advantages.

Sources:
Making it personal – Diageo on using tech to build connections with consumers
Diageo’s GenAI Tool Is Helping to Develop Brand Packaging
How Diageo is using AI to halve the price of 1,000 ad impressions


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