AI, Assortment Planning, and Supply Chain: What to Know
Supply chain disruptions continue to impact retailers, and they keep coming. From the Omicron variant to worker shortages, each disruption stacks up. Container shipping costs have even risen as much as 212%!
With unpredictable markets, keeping inventory stocked has become harder than ever. The pandemic has highlighted how traditional retail planning is not good enough. Retailers need a method to achieve success in such a market.
AI modeling, assortment planning and selection, and agile contingency plans are powerful tools. Breaking free from supply chain disruptions is possible with these tools. Continue reading to learn more about the new paradigm in retail planning!
When growing a customer base, availability is critical. If a store doesn't have the product a consumer wants, they'll shop elsewhere. When a lack of a product becomes a trend, those customers will leave for a store with the availability they need.
In the US, grocery stores struggle to keep food items in stock. Many retailers are hoping for a light at the end of the tunnel but continue to face setback after setback. Common issues include:
- COVID and its variants causing sickness and worker call-outs
- Transportation issues due to logistical issues
- Heightened demand for truckers but not enough workers
- Weather constraints
- Changed shopping habits
Despite hopeful projections from economists and analysts, the current issues affecting retailers remain. And as more stores lean into omnichannel distribution, the supply chain stretches thinner.
Omnichannel Experience Pressures
The globalization of the world economy brought about new opportunities for retailers. So too did the concepts of multichannel retailing with the advent of the internet. Businesses could move their inventory through online channels, no longer limited to brick-and-mortar.
Multichannel distribution focuses on casting a wide net to reach more customers. Omnichannel focuses on creating consistent customer experiences for existing customers.
Seamless experiences aren't about social media interaction or web services alone. It's also about the shopping experience. Stark inconsistencies with products and availability harm a retailer's reputation. Maintaining a consistent experience is necessary for today's market.
The pressure has never been more significant to provide customers with satisfactory experiences. Keeping the right mix of products on the shelf with holding power and supply has never been easy. And the disruptions in the supply chain have made that even more difficult.
Supply Chain Issues
Issues from the bullwhip effect to overstuffed ports continue to hamper the market. Some of these issues have begun to clear up. Yet the pandemic has only highlighted how fragile the supply chain is.
The supply chain is one of the biggest concerns for suppliers and retailers alike. Businesses need to insulate themselves from these adverse conditions.
Yet most retailers still use 'gold standard' plans and procedures. These old forecasting methods don't consider the changing consumer trends. Such reactive operating principles only exacerbate the existing supply chain disruptions. The next negative event could worsen these ongoing issues.
Retailers need to adopt new platforms and tools to succeed and be proactive. Agile planning and flexibility are crucial to transcend the supply chain. Enter the new paradigm in retail planning: Artificial intelligence (AI) simulation. Before I continue, check out this video to set the context of what I'm saying:
AI isn't a meaningless buzzword. It represents a new frontier in capability and flexibility. Training AI models on diverse datasets enable new forecasting, planning, and visualization forms. These potent tools allow for proactive ordering and stocking of any retail business.
At HIVERY we have gone one step further, we are fundamentally changing the way consumer packaged goods (CPG) companies and retailers collaborate with regard to assortment and space decisions with HIVERY Curate. As the video explained you can add your category goals, merchandising constraints, and assortment rules to discover assortment strategies and revenue growth in ways not possible with human approaches.
At one major CPG brand that we have been working with; using a bottom-up approach with their data, we were able to rapidly demonstrate what would happen if they way fully go to store-specific planograms using their existing clusters.
Improving items in-stock begins with bottom-up (ie store-level) assortments and data analysis. Ensuring efficient shelf space use to maximize sales is crucial at every store. This is what we do with AI. Our AI engine is literally learning from the universe of stores.
Speed and Agility
One key feature of AI modeling is its speed and agility. While traditional planning and forecasting often is “moment in time” analysis and static, AI modeling is fast, consistently learning over time as new data is entered. The result: you are able to answer complex strategy questions at warp speed and simulate any market (eg COVID) or product (e.g. new innovation) event.
Omnichannel pressures to create that seamless experience are only growing. HIVERY Curate removes that headache, identifying the best assortment strategies to take by quantifying them and comparing outcomes. Your job is to ask the question, enter your goals and constraints, and let HIVERY Curate show you the impact of that decision.
Reactive planning leaves you behind the curve, not even catching up. With Curate, you can plan across a range of possibilities and scenarios with unlimited strategy simulation. Running predictive scenarios allows you to be proactive instead of reactive. Tuning your processes and creating stocking plans will mitigate supply chain disruptions.
The New Paradigm
As mentioned above, we are fundamentally changing the way consumer packaged goods (CPG) companies and retailers collaborate with regard to assortment and space decisions. Your business needs that competitive edge to rise above.
Contact me today for more information on Curate! From live demos to answered questions, we're here to help!