Assortment Optimization is a powerful tool for retailers to increase profit and improve customer experience and loyalty. It combines cutting-edge machine learning techniques, an agile continuous improvement methodology, and flexible customization to accommodate unique business requirements. Like other related solutions, assortment optimization utilizes machine learning techniques and AI to find the optimal assortment for every SKU in each store location. However, assortment optimization offers other unique benefits.
AI-based systems do not always make better decisions than humans. Find out why, and how to make sure your system is getting the best of both worlds.
Man vs. Machine
When it comes to Assortment Optimization, AI (artificial intelligence) and machine learning play a key part behind the scenes. While a human perspective helps, there are two important factors that make AI very important: scale and automation. For example, a large retailer with 1,000 physical stores and 10,000 products has as many as 10 million assortment decisions to determine which stores should carry which SKUs, what quantities, and when. Even though a significant portion of product offering is chainwide, that still leaves a formidable number of micro-decisions to be made. This amount of decision-making for humans is inefficient and not very profitable.
Assortment optimization is a major focus area for retailers at the moment. Retailers need more accurate SKU rationalization, a better understanding of what to buy in the future, and localized assortments that drive sales. Getting this right is crucial in the market today. There are a few traditional ways that retailers plan out their assortments. They either 1) think through their assortment from a business process standpoint, 2) look at loyalty and shopper data to determine assortment, or 3) think of a brand-new method to determine assortment.
Analytics in Retail over the past couple of decades has grown from better predictions to better decisions.
The retail world of today is very different than it was 20+ years ago (and, yes, I’m old enough to remember). But, like the fashion world, some retail trends are coming full circle and starting to make a comeback (remember thinking bellbottoms would never return?). Retail used to be focused on the customer experience. Do you remember getting excited to go to Woolworth with your grandparents just so you could visit the soda fountain for a grilled cheese and milkshake? Years ago, shopping wasn’t just an ‘in and out’ thing. It was an all-day outing with the whole family. It was an experience.[Read more…]
4R Systems recently sponsored an article by Retail Touchpoints called “3 AI Success Stories: Tips from Overstock.com, Finish Line, and H&M.”
4R invites retailers to register for the complimentary webinar on its website.
BERWYN, PA, September 14, 2017 – 4R Systems, Inc., a leading provider of advanced omni retail inventory and supply chain solutions, announced its webinar for retail professionals, “Why Your Assortment Isn’t Returning Maximum ROI.” It will be held Tuesday, September 19, 11:00 am EST. Retailers can register here.
Mark G. Garland, Executive VP of Sales, Marketing and Solutions at 4R describes how omni-retail algorithms run parallel with customer demand.
How can retailers compete against Amazon if they can’t compete on price?
Customer experience can easily outperform price. More retailers are focused on localisation – optimising their supply chains to answer customer demand. True customer service moves beyond friendly clerks. It’s offering customers the products they want, when they want them, and where they want them.