No less than 79 per cent of global shoppers say they are disappointed when their desired discounted item has sold out, while over half feel let down when the colour they want is not available in the sale.
In order to maintain brand loyalty and meet customer expectations, retailers must invest in technology to ensure that they have the right products available on their shelves. This is according to Uwe Weiss, CEO at Blue Yonder, a specialist in artificial intelligence and automation for retail supply chain optimisation.
Uwe commented: “In today’s competitive retail environment, where instant gratification and speed of delivery play a significant role in the consumer experience, having the right level of stock on their shelves can be a key differentiator for any retailers in the market.
However, most of the replenishment strategies that the retail industry has used in the past to calculate the impact of external factors on customer demand simply don’t work. They are not sufficiently sophisticated and cannot respond quickly enough to fluctuating market conditions.
“Today’s unpredictable shoppers want discounts, but they want these deals on their own terms with full availability of their preferred range, colours and size. If a customer finds that the items they want are frequently out of stock, then their loyalty to the brand may start to weaken, and retailers may lose these regular customers to a competitor.
Retailers must combine the need to have the right products on their shelves with keeping these shoppers satisfied and retaining their brand loyalty, as well as maintaining a profitable and efficient business. This is where artificial intelligence (AI) and machine learning can play a significant role,” Uwe continued.
AI and machine learning can give retailers a competitive edge and insulate them against the fluctuations in the supply chain. Using the vast range of data that retailers have access to, whether that is weather patterns, past sales data, customer footfall or even if an item of clothing has appeared in a popular TV show, AI solutions can make accurate predictions of customer demand and automate the decisions around replenishment.
This can ensure that retailers always have the right levels of stock in their stores, and that shoppers who come in looking for a certain product in a particular size or colour are much less likely to be disappointed.
When this AI solution is combined with machine learning technology, its customer demand predictions can become accurate as it continues to learn and refine its forecasting models, providing the retailer with better and better replenishment decisions.
Uwe concluded: “Everyone in the industry is aware of the pressures on brick-and-mortar retailers, with online competitors and declining consumer confidence hitting sales. That’s why it is critical that retailers give themselves the best possible chance to maximise sales, by always having the products that their customers want on the shelves, and the flexibility to adjust stock levels in line with changing consumer demand.”