A critical component for retailers is: how to buy? When should products be added? What’s the best way to distribute product to stores, or to warehouses? These questions are essential to a retailer’s success and ensuring that they are buying at the best cost, at the best time and for the best channel in order to drive profits and meet business goals.
- Read Patrick’s blog, Straight talk on how a perpetual inventory system can dramatically improve store operations efficiency
- Learn more about AI and its role in retail demand forecasting in the Demand Forecasting Viewpoint
- Read Video Transcript
Retailers today really face a challenge from, you know, low cost retailers coming into the market and new entrants to the market, as well as a deflationary economy in the staple goods, that really poses a challenge for grocers especially, as they need to find a way to reduce cost, optimize their supply chain, to be able to, you know, really get any margin out of the business. So, it’s really critical to focus on moving products from the vendor down to the selling node, whether that be the store or whether that be an Ecommerce outlet, and really having an optimal, supply chain that drives your margin there.
An important component that a lot of retailers really don’t consider when trying to figure out how to buy, is what’s the best way to distribute or allocate product down to their stores, or to their warehouse nodes. So, ensuring that that process is integrated in with the replenishment process, making sure we’re factoring in for buying at the best cost, at the best time, for the best channel, is critical in driving a profitable omni commerce environment.
One of the things that merchants and supply chain managers have today, that maybe they didn’t have ten years ago, was the capability to use machine learning and demand forecasting, you know, kind of artificial intelligence to really drive the decision-making process from a buying perspective, and then also down into assortment and ultimately into what we’re selling in our stores. So being able to take advantage of those capabilities, as well an end-to-end supply chain, you know, really focusing not on one individual node, not the retail site, not the warehouse but looking at it in a holistic picture, is something that buyers and supply chain managers really need to consider as they look at how to do business and, you know, this environment.
Symphony is in a great place for providing technology to retailers that can really focus on the areas of machine learning and artificial intelligence, that drives down error rates from a statistical standpoint, which, you know, ultimately leads to better in stock condition, which leads to more optimized inventory, reducing carrying charges for retailers and really makes the margin game a little easier to play. We’ve seen retailers be able to reduce that error rate by up to about 10% which ultimately can lead to significant reduction in excess inventory, as well as increase in, in stock condition,
Retailers as they look to the future, really need to consider how to bring it all together not only at one segment of their supply chain but looking end-to-end. You know, whether that be in the buying process or in the what’s going on the shelf, what products, prices and promotion to be able to run to drive new consumers into their store. And be able to offer the items that their consumers want, through the channels that they want.