Liz Young of The Wall Street Journal says new tools are aimed at repairing supply chains that were knocked sideways by volatile consumer buying patterns during the pandemic. She writes:
Retailers are turning to artificial intelligence technology to better predict shopper demand and repair supply chains whipsawed by volatile consumer buying patterns during the pandemic.
Merchants including Walmart, retail-pharmacy giant Walgreens and online fashion seller ASOS are rolling out the increasingly sophisticated technology that takes in everything from weather patterns to social-media trends to evaluate huge sets of data and guide decisions on where to place inventory.
The efforts are aimed at refining retailers’ longtime practice of using internal historical sales information to predict consumer demand and stock their shelves with the right items at the right time.
Retailers are trying to better match supply and demand after years of steep and costly inventory imbalances.
Forecasting models were essentially fractured during the pandemic, as shoppers pinballed from buying items such as cleaning supplies and home-gym equipment to office apparel and then toward services such as travel. The volatility left many retailers swamped with unsold goods they had rushed to stores and distribution centers even as they missed sales on merchandise that was in demand. […]
U.K.-based ASOS this year began using AI for demand forecasting for items such as T-shirts, dresses and denim. The retailer’s model is trained on past sales, returns data, product popularity and trends. It produces a forecast of weekly demand for each product in every size at each warehouse for the next two seasons.
The AI technology “gives our merchandisers a forecast at a granularity and accuracy they were not able to produce before,” an ASOS spokesperson said.
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