FEATURE
Retailers harness AI and machine learning
to combat soaring inflation and optimize demand forecasting
By : Kristie Davison , Vice President Sales Asia Pacific , RELEX Solutions
Soaring inflation will continue to challenge retailers in the Philippines and around the globe in 2023 . Businesses must find ways to maximize resources and minimize waste as the increased cost of operations , weakened consumer purchasing power , and enduring supply chain disruptions , such as climate change , impact the scarcity of raw materials .
Retailers face a significant challenge in terms of revenue loss due to surpluses and shortages . Particularly in the Philippines , stock replenishment is often done manually or powered by retail solutions with limited capacity . The more distribution channels a company has , the more difficult it is for retailers to understand how much inventory they require .
By incorporating the latest advancements in artificial intelligence ( AI ) and machine learning , companies are empowered to use data-driven demand forecasts that can analyze the impact a range of variables might have on demand to increase the accuracy of predictions , including historical demand patterns , internal business decisions , and external factors . Accurate demand forecasts can be leveraged throughout your supply chain to improve decision-making and outcomes .
For an omnichannel business strategy , it ’ s crucial for retailers to tailor their demand forecasting strategies to each sales channel . Online orders tend to follow a different sales pattern than brick-and-mortar sales . For one , they ’ re often driven by a couple of factors , including easier price comparison on digital platforms or holiday seasonal orders that are usually placed online well ahead of time , followed by a wave of procrastinators rushing to brick-and-mortar stores for last-minute purchases .
Through the integration of AI and machine learning , retailers can accurately anticipate demand at the store , sales , and fulfillment levels , ensuring that the appropriate inventory is available where and when it is needed . This approach not only enhances the customer experience but also optimizes resource allocation and pricing strategies , which are essential for outpacing competition and tackling inflation .
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