Invent Analytics Conversations Podcast: The Future of Inventory Optimization
Excerpts from Invent Analytics Conversations Podcast with Prof. Gurhan Kok.
Welcome to Invent Analytics Conversations podcast. In this episode, we welcome our CEO, Gurhan Kok, where he talks about retail planning predictions, omni-channel inventory optimization challenges, and opportunities in the new world of retail.
How do you see the future of retail planning?
I believe 2022 will be the year of omni-channel and retail operations for retailers and AI applications to solve these new problems that arise from the complexity of omni-channel. Let me give you an example. Today when a customer buys something online, they can get their orders delivered either from stores or distribution centers, and they can return them anywhere they like. This makes the planning problem for retailers much more complex.
We know that omni-channel is here to stay. Most retailers have already invested in technical and infrastructure capabilities to serve the omni-channel customer. But the challenge is to achieve excellent customer service or deliver superior customer experiences with low cost and better planning. So that's where AI comes into play.
What are the biggest challenges for retailers from an inventory optimization perspective?
I would say that one of the biggest challenges in retail inventory planning is demand forecasting. Given the complexity of omni-channel shopping behavior, a big challenge is where customers would buy items and where they would like to return them.
Customers can now order wherever they would like to order from. They have plenty of options. We know from studies that when customers cannot find an item at a store, up to 30% of them would order from either in-store applications or online. And that puts a lot of pressure on retailers.
Today retailers have the responsibility and the opportunity to fulfill this demand from other inventory sources. This is great, but it also poses the challenge of forecasting where demand will come from and where to position the inventory.
At Invent Analytics, we have customers from all over the world - from the U.S. to Asia, the Middle East to Western Europe. We also hear the same things from them. Customers prefer omni-channel experiences, and retailers are ready to embrace this change. But we need new approaches to solve these problems. Traditional inventory optimization and forecasting solutions are insufficient to handle the complexity of omni-channel. Service-level-driven frameworks would push inventory at each location based on only that location’s demand and KPIs. And this is clearly not enough to handle the new flows that we are looking at.
What do you see as the top inventory planning opportunities for retailers?
At Invent Analytics, we built an inventory optimization solution that is financially centered, unlike traditional inventory solutions that focus on a single store or a single channel. Our solutions enable retailers to make better forecasting. We forecast omni-channel customer demand and plan inventory, anticipating the omni-customer flows that arise from either stores or online across the whole network of the supply chain.
And we deliver speed to value. We can roll out our AI-based forecasting and inventory optimization solutions within months. With rigorous A/B testing, we can prove the financial impact of our solutions and empower retailers to drive ROI within months with these AI applications. (Visit Why Invent Analytics to find out more about what sets Invent Analytics apart.)
We are very excited to work with retailers all around the world to help them not only exceed their customers’ expectations, but also achieve higher profitability and maximize their inventory performance.
Thanks, Gurhan for joining us at Invent Analytics Conversations podcast.
In the retail omni-channel world, planning is key to giving your customers a good experience. To thrive as a retailer, you need to meet omni-channel customer demand profitably and make every inventory decision based on accurate and granular forecasts.
If you're interested in learning how Invent Analytics can help you accelerate your demand forecasting, allocation, replenishment, and markdown capabilities using the financial profit optimization model and AI-based advanced analytics, get in touch with us today. You can also request a demo to see Omni-Plan in action.
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