By Mike Finley, CTO and Chief Scientist at AnswerRocket
As consumers begin their holiday shopping, they’re focused on making sure they get everything on their list to make the season memorable. However, it isn’t only consumers with this concern. For consumer packaged goods (CPG) companies and retailers, holiday planning begins months in advance, and during the hustle and bustle of the holiday season, teams are scrambling to adjust plans, move inventory, fulfill orders, and adapt to unforeseen challenges like demand fluctuations, supply chain disruptions, and severe weather conditions on a daily basis.
The dynamic nature of the market and the unpredictability of consumer behavior make it a challenge for CPG and retail companies to accurately anticipate holiday demand. However, CPG and retail organizations can look to AI-powered demand forecasting as a guiding light to maneuver through the complexities of the holiday season with finesse.
The article will discuss how generative AI (genAI) analytics tools leverage advanced algorithms and data analysis to process vast amounts of data in real time to generate actionable insights on consumer behaviors and trends. This empowers CPG brands and retailers to proactively adjust their pricing strategies, as well as production and distribution strategies, ensuring they can meet consumer demands effectively and minimize the risks associated with under or overstocking.
‘Tis the season for confident predictions with data-driven delight
When holiday planning begins months in advance, it’s vital for the success of the season that trend and forecast predictions are accurate. Data analytics is not a new concept; however, the scale and scope of analytics have drastically evolved. Leaders in the CPG analytics space use AI and machine learning algorithms to uncover and understand stories hidden in their vast amounts of data.
By extracting insights from historical data, market trends, and consumer behavior patterns, advanced analytics empower businesses to unlock the secrets hidden within, providing answers to crucial questions like “what are the expected sales volumes for each product during the holiday season?” In fact, through the integration of GenAI-powered chatbots and natural language processing (NLP), companies can answer that very question in seconds.
Approaching the holiday hustle with an augmented analytics solution gives businesses the tools they need to make the holiday season as smooth as gravy. This data-driven approach allows CPG and retail companies to make strategic decisions related to inventory management, production planning, and resource allocation, leading to optimized operations, and improved profitability.
Stocking sleighs and shelves
Once CPG and retail companies have predicted what the hottest products of the holiday season will be, many companies are turning to GenAI-powered analytics to ensure shelves remain stocked with the right products at the right time. This data-driven approach helps prevent stockouts, which can lead to lost sales and unsatisfied customers.
Additionally, a GenAI analytics copilot can help companies identify which departments or store locations have the highest demand for specific items and when stores will likely need to be restocked. This information can be used to optimize product distribution, ensuring inventory levels stay at the optimal level. As a result, companies can maximize their profits and continuously provide customers with their holiday must-haves throughout the season.
Analyzing the season: how data makes seasonal pricing merry and bright
Seasonal events present a brief but critical period to sell products. Before products can hit the shelves, it’s vital companies develop an optimal pricing strategy. With the wrong pricing approach, companies can face unfulfilled customer expectations or excess inventory that can’t be moved. With accurate data-driven predictions in hand, CPG and retail companies can optimize seasonal pricing to align with fluctuating demand and maximize profit margins.
Using customer data, GenAI analytics enables businesses to understand the factors that influence consumer purchasing decisions. Pulling data from additional sources like competitor pricing and promotional activities ensures pricing decisions are not only informed by internal metrics, but are also strategically aligned with external market factors. This enables businesses to navigate the market with informed decisions that resonate with consumer expectations and outpace competitors. Unlike static pricing models, AI models can provide insights into how price adjustments will affect sales. This helps businesses know when to maintain or change pricing and why.
GenAI with insights so bright, won’t you guide the sleigh tonight
The holiday season is a time of excitement, anticipation, and, for CPG and retail companies, a period of intense competition. In the festive flurry of activity, it’s essential to stay ahead of the curve and adopt strategies that drive success.
By harnessing the power of GenAI applied to analytics, companies can optimize their operations, enhance customer satisfaction, and secure a competitive edge that lasts far beyond the holiday season. Much like Rudolph’s red nose cutting through the darkness of a snowy night, GenAI is the guiding light for CPG and retail companies during the holiday season, casting a brilliant light on optimal strategies and insights.
Mike Finley is the CTO and Chief Scientist at AnswerRocket where his work focuses on discovering deep insights in business data with AI. His work in intelligent agent technology is built on a foundation of natural language processing, one of AnswerRocket’s core features.
