Predictive Analytics Demo Series: Optimizing Store Assortment
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For the full webcast, including live demo: https://www.celect.com/store-assortments-webcast
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Predictive Analytics Demo Series: Optimizing Store Assortment
- 1. Predictive Analytics Demo Series Optimizing Store Assortments
- 2. Celect’s Purpose • Predictive analytics SaaS platform to help retailers optimize store assortments, overall inventory portfolios • We leverage a groundbreaking advance in Machine Learning and Optimization. • An MIT Artificial Intelligence Lab Top 50 Technology Innovation © 2016 Celect, Inc. Confidential. Do Not Distribute.2 $1 Trillion flows through the Inventory Value Chain each year
- 3. It’s in the News © 2016 Celect, Inc. All Rights Reserved.3 Retailers Must Use Algorithms for Competitive Advantage Gartner, Oct 2016 “In the new digital economy, retailers can best gain a competitive advantage through the application of algorithms that reduce costs and grow top-line revenue …” Top Five Retail and Fashion Trends for 2017 Drapers, Dec 2016 “Retailers are taking advantage of advancements in machine learning, deep analytics and artificial intelligence for a more targeted and personalized shopping experience.” Why Predictive Analytics Need to Be Part of Every Retailer's Growth Strategy BizTechMagazine.com, Jun 2016 “… a growing number of retailers are turning to predictive analytics — specialized software that analyzes data and projects the likely outcome of future events — to plot their inventory needs far more accurately than at any time in the past..”
- 4. IN-STORE SHOPPER EXPECTATIONS HAVE CHANGED © 2016 Celect, Inc. All Rights Reserved.4 They expect everything, everywhere, all the time.
- 5. A ‘Simple’ Example • $650M spent annually on Shoes • 100K Shoe ‘types’ or SKUs (style/color/size) • 52 Stores (with room for 5K Shoe SKUs) • 6M unique customers © 2016 Celect, Inc. All Rights Reserved.5 An American Luxury Department Store Goal: Avoid Stock-outs and Markdowns Solution: True Demand Prediction
- 6. How are decisions being made today? © 2016 Celect, Inc. Confidential. Do Not Distribute.6 I think Athleisure-wear is going to be even bigger this year. We sold 100 Platform Sandals two years ago, 200 last year, so I will forecast 300 for this year. • These decisions are made using Excel and gut instinct • Why is this no longer enough? ‒ Customer expectations have changed along with how they buy ‒ Markdowns increasing, margins shrinking
- 7. There’s a better way © 2016 Celect, Inc. All Rights Reserved.7 Bring Science to the Art of Retail • Supplement your experiences, knowledge, and intuition with machine learning • Leverage the data you already have Predicting Customer Choice • How products interact and influence each other • Assortment Planning, Buy Accuracy, & Allocation
- 8. Celect Assortment Optimization • Cloud-based Predictive Analytics Platform • Customer on-boarding in weeks without data scientists • Intuitive, Easy-to-use, Interactive © 2016 Celect, Inc. Confidential. Do Not Distribute.8
- 9. Would your customers like this hoodie? © 2016 Celect, Inc. All Rights Reserved.9 Which would sell better in your Boston store?
- 10. Does this jacket have a cannibalistic effect? © 2016 Celect, Inc. All Rights Reserved.10
- 11. Questions, Answered © 2016 Celect, Inc. All Rights Reserved.11 We sold out of a particular product in Store 28 WHAT WAS THE RIGHT ALLOCATION? We have never sold a particular product in Store 58 HOW WELL WOULD IT SELL THERE? We are looking to add a new brand in to a set of stores WHAT IMPACT WILL THAT HAVE ON STORE SALES?
- 12. A prescriptive retail process Plan Buy Allocate Sell Liquidate © 2016 Celect, Inc. All Rights Reserved.12 What product and how much should I buy? Did I over-buy or under-buy? Is the product in the right stores? Did I maximize full price sell- through? How much margin did we lose? Prescriptive Decisions Optimized Assortments Optimized Allocation Engaged Customers Optimized Markdown
- 13. A prescriptive retail process Plan Buy Allocate Sell Liquidate © 2016 Celect, Inc. All Rights Reserved.13 What product and how much should I buy? Did I over-buy or under-buy? Is the product in the right stores? Did I maximize full price sell- through? How much margin did we lose? Prescriptive Decisions Optimized Assortments Optimized Allocation Engaged Customers Optimized Markdown
- 14. DEMO! © 2016 Celect, Inc. All Rights Reserved.14
- 15. Thank you! © 2016 Celect, Inc. All Rights Reserved.16 Questions? info@celect.com More webcasts and information celect.com/resources Twitter Blog @celect blog.celect.com
Notas del editor
- http://www.gartner.com/newsroom/id/3487917 https://www.drapersonline.com/news/top-five-retail-and-fashion-trends-for-2017/7016873.article http://www.biztechmagazine.com/article/2016/06/why-predictive-analytics-need-be-part-every-retailers-growth-strategy
- Why is it in the news? Well, shopper expectations have changed.
- Other Talking Points: - In Finance, there are complex models that are tuned towards portfolio optimization, and in many cases it is easier in Finance - There is no predictive model which can currently handle the complexity of Retail (outside of Celect)
- Thankfully there’s a better way to make decisions from your data. Use data you already have – mentioned in previous slide. Just need to operationalize that data. Things like inventory data, browse history, crm data, etc. You have it all, it just needs to be pieced together. By understanding customer choice, your data allows us to understand how they interact with a specific assortment – and how products interact.
- Portfolio = YOUR INVENTORY Main points: - this is very hard stuff, incredibly complex system under the hood - But we deliver it in an easy to use to use platform - For use by non-sophisticated users (retail merchants and planners) - We deliver prescriptive insights with interactive real-time optimization, allowing for scenario planning and analysis
- Store vs Store Gray hoodie: http://shop.lululemon.com/p/jackets-and-hoodies-hoodies/Take-Ten-Hoodie/_/prod1960071?rcnt=1&N=8a2&cnt=5&color=LW4IDXS_023133 Blue: http://shop.lululemon.com/p/jackets-and-hoodies-hoodies/Scuba-Hoodie-III/_/prod7390379?rcnt=3&N=8a2&cnt=5&color=LW4IC7S_4411
- Store vs Store Gray hoodie: http://shop.lululemon.com/p/jackets-and-hoodies-hoodies/Take-Ten-Hoodie/_/prod1960071?rcnt=1&N=8a2&cnt=5&color=LW4IDXS_023133 Blue: http://shop.lululemon.com/p/jackets-and-hoodies-hoodies/Scuba-Hoodie-III/_/prod7390379?rcnt=3&N=8a2&cnt=5&color=LW4IC7S_4411
- Retailers are unable to answer those questions with the tools they have today. A prime example of this is spreadsheets.
- This process is lacking prescriptive insights and decision making capabilities to drive revenues. Celect is here to do just that.
- MIT CSAIL noted our underlying technology in their top 50 greatest innovations, along side notables like technologies such as The Digital Computer, Akamai, e-Mail, robotics… and the spreadsheet.
- From hindsight to foresight.