Top 100 Global Retailers Improve Promotions And Inventory Performance With New Forecasting And Replenishment Applications From Predictix
New Promotional Forecasting and Safety Stock Optimization applications can be rolled out in as little as 12 weeks without replacing existing systems
Predictix recently launched a series of "Value Accelerator" applications that address retailers' most critical promotions and inventory challenges. The initial solutions, Promotional Forecasting and Safety Stock Optimization, help retailers reduce out-of-stocks, improve service levels and optimize their inventory investment. The applications were designed for fast implementation, rapid time to value, and no disruption to existing systems or processes. Predictix will demonstrate the new solutions at booth #245 at the NRF Convention and Expo in New York City on January 10 and 11, 2011.
As summed up in "Defining Twenty-First Century Merchandising," a recent benchmark report from Retail Systems Research,1 "the worst situation that retailers can find themselves in is one where they face both underperforming inventory AND out of stocks… Merchandisers face exactly that challenge...." The new Predictix Value Accelerators were designed expressly to address these critical issues.
Tier 1 retailers have significant existing investments in forecasting and replenishment software, and their teams rely on these systems on a daily basis. Instead of replacing these systems, the new Predictix applications let retailers drive more value out of them. This allows retailers to benefit from more profitable promotions and higher performing inventory quickly and cost-effectively, with minimal disruption to their business, no expensive up-front investments, and avoiding complex, lengthy implementations.
Global Top 10 Grocer Improves Promotions Effectiveness with Predictix Promotional Forecasting
Getting promotions right has never been more important, or elusive. As recently noted in the Financial Times, promotions set an all-time record of 37 percent of grocery sales by value.2 Unfortunately, the promotional forecasts retailers rely on to plan and replenish stock are often highly inaccurate. For example, one Tier 1 retailer's promotional forecasts were off by over 90 percent for 40 percent of their products, a surprising yet unfortunately all-too-common story where promotions quickly turn into disasters – resulting in the over- and under-stocks cited by Retail Systems Research. Predictix Promotional Forecasting overcomes this pervasive problem through the industry's most advanced, accurate predictive technology. The Predictix forecasting engine consistently outperforms competitors in real-world tests across every retail vertical, producing 30–50 percent more accurate forecasts and delivering dramatic results to retailers and wholesalers alike.
A Top 10 Grocer in the STORES Global Powers of Retailing survey relies on Predictix Promotional Forecasting to plan over 13,000 promotions annually across nearly 800 stores and forecast their impact on 120,000 products. The grocer's buyers get answers to their promotions scenarios in seconds, compared to many minutes or even hours with their previous system, with results that include:
- Improved collaboration among all of the grocer's 100+ buyers, ensuring that promotions complement each other.
- Greater promotions effectiveness, with better allocation of vendor funds and promotions spend.
- Reduced inventory levels due to more accurate forecasting of "victim" and "halo" items, increasing supply chain and replenishment efficiency.
- Improved service levels, which help the grocer drive significant improvements in sales, profits, and customer satisfaction.
Global Top 100 Retailer Improves Inventory Performance with Predictix Safety Stock Optimization
While more accurate forecasting is a critical component of optimizing inventory performance, another is optimizing safety stock levels for every SKU, every store, and every week. Unfortunately, retailers relying on today's legacy replenishment systems typically must apply broad parameters to set safety stock, which can be as crude as a simple "A, B, C" ranking of products. Such simple settings focus solely on a broad, service-level goal while completely ignoring the retailer's other business objectives. Moreover, these simple approaches fail to account for the vastly different roles products can play in different stores at any given point in time, as well as their profitability.
Predictix takes precisely that informed approach. Predictix Safety Stock Optimization helps optimize inventory investments by allowing retailers and wholesalers to set business objectives for those investments, understand the role and performance of each product, compare alternative scenarios based on optimizing for different objectives, and then automatically assign optimal service level targets to meet those goals. Predictix Safety Stock Optimization then provides these unique parameter values into the retailer's existing replenishment system, driving more value from that investment.
A UK retailer ranked in the Top 100 in the STORES Global Powers of Retailing survey deployed Predictix Safety Stock Optimization to better manage its inventory investment and deliver a higher level of service to its more than 100 million customers a year. The retailer, which carries close to 30,000 SKUs across hundreds of stores, uses the new Predictix solution to:
- Minimize its inventory for a given service level, or maximize service level for a given inventory investment, with very granular control.
- mprove profitability by ensuring that high-margin, best-selling items are always in stock.
- Reduce inventory for individual items that are easily substitutable for other items.
- Manage cash more effectively by eliminating overstocks and ensuring the best strategy for product availability and replenishment at various inventory investment levels.
"Retailers today need agile, intelligent solutions that can be implemented quickly, deliver immediate results and adapt to their evolving needs – and that's exactly what Predictix delivers with our Value Accelerators and cloud-delivered merchandising suite," said Molham Aref, CEO, Predictix. "With the world's most accurate predictive technology and the unlimited power and flexibility of cloud-delivered solutions, Predictix is changing the way retailers think about their core enterprise merchandising systems."
1"Defining Twenty-First Century Merchandising," Nikki Baird and Paula Rosenblum, Retail Systems Research, Sept. 2010.
2"Supermarkets Seek Festive Domination," Andrea Felsted and Louise Lucas, Financial Times, Oct. 27, 2010
Retailers, wholesalers and brands make better forecasting, planning, assortment, pricing, and replenishment decisions with the Predictix merchandising software suite. Our clients get started quickly and see value early thanks to our cloud-based solutions and our agile approach to delivery. Our predictive technology is more accurate and drives better decisions in today's changing environment. Building on our executive team's experience in leading well-known retail technology companies, we've developed our software from the ground up so our clients can completely tailor and readily adapt it as their business needs change. With no hardware to buy, software to install, or long-term commitments to make, we are changing the way our clients invest in and get value from technology. For more information, visit www.predictix.com.