By AFS and Microsoft
Disruption is exploding through retail, sparked by digital transformation. Across every corner of the industry, companies are struggling to keep up with the stunning pace of change and maintain a competitive advantage amid the turmoil.
Consumer expectations are changing, flagship retailers are shuttering stores, e-commerce giants are opening brick-and-mortar locations, and digital markets continue to explode in popularity – when these shockwaves are done roiling the industry, the retail landscape will be unrecognizable from what it was only a few years ago. During this volatile era in retail, solving recurring, everyday problems such as out-of-stocks, merchandising issues, incorrect displays, inefficient routes, and failed product introductions, takes on a new sense of urgency. While the challenges are undeniable, this period of change also represents a unique moment for organizations to reinvent themselves in the digital age.
The digital revolution disrupting the retail industry is driving innovations and revealing opportunities for unprecedented growth. Powerful tools – such as advanced analytics, machine learning, and artificial intelligence (AI) – are emerging to combat both traditional and contemporary challenges. Consumer goods (CG) companies that excel in the current retail environment are embracing forward-thinking strategies, driven by these innovative technologies, to thrive and prepare for the future. Machine learning and AI empower CG companies to predict the previously unpredictable and identify issues and opportunities before they arise. Armed with these transformative technologies, CG organizations are maximizing the square footage available in stores, and in turn amplifying their revenue potential.
Given the environment and external market forces, here are five strategies that CG companies implement to:
- achieve perfect retail execution,
- build the perfect store, and
- succeed now and into the future.
1 – Identify trends earlier to accurately predict supply and demand
Intelligent companies are increasingly building their processes around data-driven insights. With thin margins and so much at stake, it’s critical for CG companies to make decisions based on all the information available. Digitally-captured data analytics from syndicated sources – including transactions, social listening, inventory, promotions, CRM, IoT devices, and more – offer organizations a detailed, nuanced view of what’s happening at every level. Real-time point-of-sale data alone improve sales as much as 10%, and studies show that access to accurate inventory information is a top factor in improving business agility.
Simply seeing what’s happening now is a strong start, but to excel today, CG companies must look to the future. Machine learning empowers companies to better predict demand, enabling them to make smarter decisions with precise and continually-updated forecasting. By applying machine learning algorithms, it’s possible to identify trends across channels faster than before and to uncover patterns that would go undetected with traditional forecasting methods. CG companies that have embraced machine learning and AI are able to better anticipate supply and demand and eliminate problems such as out-of-stocks or overstocks. In fact, AI technology improves assortment efficiency by as much as 50% – transforming an organization’s ability to maximize product potential. In addition, algorithms continually learn as they collect data, enabling businesses to…
AFS provides retail execution strategic solutions for CPGs in the digital revolution, including seven of the Top 10 and half of the Top 25 Forbes global food, beverage, and tobacco companies.
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