While demand forecasts have the power to increase profits for any business, retailers are struggling to generate accurate forecasts that would save them millions of dollars. According to the CPGs leaders in attendance at the Grocery Manufacturer’s Association (GMA) Leadership Forum, this is what’s keeping them up at night.
Demand Forecasting Challenges
Across all sessions, attendees expressed a widespread feeling of frustration with traditional demand forecasting processes. CPGs have reported that 50% of the demand planning team’s time is spent manually planning and forecasting for their organizations. After spending ample amounts of their time generating forecasts, the forecasts are often inaccurate and result in stockouts or excess inventory, which substantially impacts margins considering the billions of dollars in inventory being held on a daily basis. Accordingly, CPGs are now searching for solutions that provide aggregated views of their data, helping them better align customer demands with manufacturing needs.
AI-Powered Demand Forecasting
Human-powered demand forecasting strategies typically rely on seller experience and customer reporting. However, as companies begin to rely more on big data, machine learning and AI technology are essential to understanding shopping patterns and creating accurate demand forecasts.
According to a McKinsey study, artificial intelligence has the power to reduce forecasting errors by 20-50%. Accordingly, retailers can leverage this increased accuracy to better predict consumer needs, make more informed decisions and increase profits for their businesses. In addition, providing accurate demand forecasts would reduce the amount of excess inventory, the time the product is stored in inventory and more accurately forecast demand for the manufacturing of new products.
As the world leader in AI software for enterprise retailers, Rubikloud is at the forefront of this charge. Our platform utilizes artificial intelligence to help retailers build solutions based on their individual business needs. Price and Promotion Manager, specifically, allows businesses to utilize machine learning to evaluate past situations and confidently produce forecasts that will minimize stockouts and overstocks while maximizing business objectives.
Schedule a demo with us today to learn how incorporating AI into your forecasting strategy can save time and money with accurate demand forecasts.