# Harnessing Causal AI with Howso to Transform Retail, CPG, and Telecom

John Emmert

October 29, 2024

Causal AI

## Unlocking Cause-and-Effect Insights with Howso's Causal AI

In today’s data-driven economy, industries like retail, consumer packaged goods (CPG), and telecommunications face enormous pressure to adapt quickly and intelligently to shifting customer preferences and market dynamics. The traditional machine learning (ML) techniques used to achieve these insights have limitations, often working on abstracted data that can introduce biases, lack transparency, and experience data drift over time. But with Causal AI, which seeks to uncover not just correlations but the actual causes behind patterns in data, companies can now make more accurate and actionable decisions. This is where Howso comes into play. By operating directly on data without layers of abstraction, Howso’s causal approach minimizes these issues, providing unbiased, transparent, and stable insights that organizations can rely on.

Let’s explore how Howso’s Causal AI solutions are transforming the retail, CPG, and telecom industries.

### 1. Retail: Elevating Customer Experience and Personalization

Retailers are tasked with delivering increasingly personalized experiences to retain customer loyalty in a competitive market. Traditional ML can find common shopping behaviors, such as products frequently purchased together, but causal AI through Howso goes further by pinpointing the direct factors influencing customer choices.

Imagine a retailer interested in optimizing its loyalty program to increase repeat purchases. Rather than merely identifying which customers are more likely to engage with the program, Howso’s Causal AI solution isolates the exact offers, product placements, or store features that genuinely influence customer actions. Because Howso operates directly on the data without adding layers of interpretation, our insights are highly reliable, unbiased, and explainable, enabling retailers to make precise adjustments in real time.

Moreover, Howso’s Causal AI can address complex supply chain challenges by identifying the true causes of issues like stockouts and excess inventory, factoring in seasonality, customer demographics, and location-specific preferences. By understanding these causal dynamics, retailers can refine supply chain processes, leading to better stock availability, reduced losses, and an improved customer experience.

### 2. Consumer Packaged Goods (CPG): Optimizing Product Placement and Promotions

For CPG companies, understanding what actually drives purchases is essential for effective product placement, pricing, and promotions. Where traditional ML methods may suggest patterns, Howso’s Causal AI dives deeper to reveal the underlying causal factors that lead consumers to act. This allows CPG brands to optimize their strategies with precision and transparency.

Take a brand launching a new line of beverages. With Howso’s causal insights, the company can uncover the true conditions that drive successful promotions, such as timing, price points, and the most effective distribution channels. By focusing on the actual causes, rather than superficial correlations, Howso helps brands design campaigns that generate a higher return on investment and stronger customer connections. Thanks to Howso’s alternative approach to AI, we operate directly on the data, so there’s no risk of data drift or hidden bias impacting the insights—everything remains consistent and clear.

Furthermore, CPG brands can use Howso’s Causal AI to preemptively address potential quality issues or product recalls by isolating the root causes of such challenges. This ensures that companies can enhance product quality, uphold customer trust, and reduce operational risks in a highly competitive market.

### 3. Telecommunications: Improving Customer Retention and Reducing Churn

In the telecom industry, reducing customer churn and enhancing retention are top priorities. Causal AI’s strength lies in going beyond simply identifying which customers are likely to churn; it helps companies understand why they are likely to leave. Howso’s solution is particularly effective here because it operates directly on the raw data, resulting in highly explainable, transparent insights that telecom providers can trust to shape their strategies.

For example, telecom companies can use Howso’s Causal AI to uncover the real drivers behind customer dissatisfaction, such as network coverage, pricing adjustments, or customer support interactions. By knowing these root causes, telecom providers can design interventions that directly address customer pain points. A provider might discover, for instance, that improving network reliability in certain regions has a greater impact on retention than blanket discount offers, enabling more efficient and effective resource allocation.

With Howso, telecom companies can also optimize marketing efforts by pinpointing the causal factors driving customer acquisitions and loyalty. This deeper understanding allows for better budget allocation and offer personalization, ultimately leading to higher customer satisfaction and better returns.

### **Why Howso’s Causal AI Solution is Uniquely Positioned**

Unlike traditional ML technologies that can introduce abstraction, data drift, or bias, Howso’s Causal AI solution works directly on the data itself, without unnecessary layers. This direct approach brings several key advantages:

– **Reduced Bias and Drift:** By avoiding abstraction layers, Howso’s approach minimizes the risk of bias and model drift, ensuring that insights remain stable and accurate over time.

– **High Explainability**: Howso provides a clear, transparent view of causation within the data, so companies can easily understand and trust the insights that drive their decisions.

– **Actionable Precision:** By identifying the real causes behind patterns, Howso empowers companies to take targeted actions that have a true, measurable impact on their goals.

### If you’d like a deeper dive into how Howso can help your organization leverage the benefits of Causal AI, schedule time to chat with a Howso expert here.