It’s the most wonderful time of the year. But in 2019, Golden Quarter retail revenues could well be dented by political and economic uncertainty, according to European analysts.
The International Monetary Fund has issued a warning that most countries in Europe have seen their economies weakened this year, with little hope of Christmas cheer to come. Meanwhile, the British trade body, the BRC, has urged the UK government to secure a Brexit deal with the European Union after its latest health check of high street and online spending showed sales have declined or remained flat for several consecutive months.
In a similar vein, France and Germany’s fashion retail businesses are expected to experience “a rough end to the year” according to a report in MDS, the global fashion business journal – due to political agitation and shaky consumer confidence.
Discounting and supply chain contingency measures by retailers are likely to cut into precious festive holiday margin suggests KPMG. “Retailers’ focus needs to be on cost and efficiency with only the leanest and most efficient operations coping with this extreme test of endurance,” says Paul Martin, the UK head of retail at KPMG.
Can Christmas be saved? We’re casting technology as the fairy godmother who will deliver a happy ending to this seasonal saga. AI-enhanced replenishment and forecasting for holiday and New Year promotions could certainly add some much-needed sparkle to Europe’s struggling retail sector. Retailers and CPGs looking for ways to operate more efficiently know very well that if stockouts, overstocks, and other painful supply chain losses can be reduced, there’s a far greater chance of delivering seasonal joy.
From Black Friday promotions to New Year’s Eve deals – the more accurate the forecast planning and replenishment, the heftier the return for retailers and their suppliers.
A McKinsey study states that artificial intelligence (AI) has the power to reduce forecasting errors by up to 50% – meaning far fewer overstocks and stockouts and therefore preserved profit margins. It follows that retailers and CPGs can leverage this increased accuracy to better predict consumer needs in the run-up to, and during, the busy holiday shopping period. Promotional activity can then be fine-tuned so that sales are optimized and fewer customers disappointed.
Quite rightly, retailers have concerns around using and integrating newer technologies into their large and complex legacy systems. However, with the right technology partner, it’s possible to implement an AI solution that is built to work within the constraints of a legacy system and be deployed in a short time frame.
As the world leader in AI software for enterprise retailers, Rubikloud is on a mission to take retailers forward in this way. We build AI solutions to solve the individual business needs of retailers and CPGs. For example, our Price and Promotion Manager uses machine learning to deeply analyze past data to more accurately predict and produce forecasts. This will cut stockouts and overstocks while maximizing business objectives.
At times like Christmas peak, everyone needs simplicity to get their work done. Our platform allows non-technical business users to intuitively harness the power of machine learning with ease.
European consumers spend an average of £400 each during the festive holidays according to Deloitte, rising to £567 in the UK and £526 in Spain. Don’t disappoint them with stockouts, or leave yourself open to overstock especially when opportunities to boost revenues abound. Let AI forecasting take the strain so you can get ready for a very merry Christmas.