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Shrink Product Deadstock and Increase Sell Through Rates with AI

7 MIN READ
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Maximize Your Sell Through Rates and Minimize Dead Stock 

Deadstockit can drag down profits and can be a glaring sign that you’re missing the mark when it comes to connecting with consumers. If you’re looking to improve your sell-through rates and reduce the toll deadstock has on your season’s retail performance, it’s essential to look deeper at the decisions which led to such results. Our recent webinar Why Optimizing Pricing & Inventory Matters takes a detailed look at how to improve planning for more successful selling cycles. You can watch this replay here and while you’re here take a moment to get a brief overview of the current retail landscape and how better planning intelligence can solve some of the biggest points of friction in the inventory space.    

Current Challenges to Retail Businesses

Making the most sales and reducing the amount of dead stock you carry is more crucial to thriving in today’s retail climate than ever before. You probably already feel the profitability pressure on each SKU and the time to move products to markets continually shrinking. Not to mention exceedingly low margins for errors, with more brands making more products to compete across an ever-broadening scope of channels. Within such intense pressure there’s also the ever-changing economic factors which need to be taken into account along with supply chain variables that become increasingly tenuous. If that wasn’t enough to have to navigate, your company also needs to make strides toward further sustainability and transparency as greater compliance needs arise driven by consumer sentiment and government initiatives.

While you can’t control many of these variables, there is a better way than playing catch-up and reacting to these constant pressures and changes. Leveraging data, both in terms of market intelligence and price planning empowers teams with the information necessary to make informed decisions rather than rely on wishful thinking or gut feelings. Taking full advantage of what AI and machine learning technology can offer prevents a brand from the major planning blunders that result in dead stock damaging bottom lines. With more and more businesses turning to these solutions, it’s essential to not be left behind. If your competition out-plans your business through better, more accurate and timely market intelligence and price planning, they could easily outperform you in sales and profits as well.    

What is Market Intelligence?

Market intelligence encapsulates data from both competitor and consumer activity. On the business side, this includes the comparison and competitive benchmarking of trends, styles and assortments against the brands you’re competing with, while consumer-focused data includes both the information gathered from online search trends along with retail buying insights.  

In the past the only way to gather such data was through labor-intensive manual practices, which were fraught with errors and inconsistencies. Some businesses still rely on such methods, but new tech capabilities now enable accurate, real-time findings to be disseminated to teams, eliminating the need for clunky practices.    

Centric Market Intelligence for instance tracks information across your sites and your competitor sites. This includes comparisons on key planning areas such as pricing, assortment, sizing and discounting. Anything you’d see online as a shopper, Centric Market Intelligence quickly and efficiently gathers on a daily basis, collecting and collating this data into digestible formats that planning teams can access and confidently take action on.  

What Are the Advantages of a Market Intelligence Tool?

During planning in pre-season, you’ll want to have all of the information that’s available to you (and your competitors) so you can make more informed decisions. This is a key step to avoiding costly deadstock and leveraging the products and styles which are going to be most popular in-season. Centric Market Intelligence provides a comprehensive snapshot of the current retail landscape so you can make the necessary changes to stay on top of fast moving trends and consumer preferences. Advantages of Centric’s Market Intelligence include: 

  • The ability to efficiently benchmark against competitors 
  • Trend, inventory and product predictions 
  • Valuable insight into competitors’ pricing strategies 
  • High quality data from a system which has been trained to accurately categorize products and pick up on detailed attributes and a variety of sizes. 
  • Exact product matching thanks to AI capabilities which eliminate the need for time-consuming and unreliable manual matching.  
  • Leverage a real-time pulse on consumer preferences and interests that allow you to seize on fleeting trends more quickly.  

In today’s crowded retail environment, with competitors already having the same access to such information, relying on the old ways of manual collection can place a business at a severe disadvantage. Marketing intelligence has evolved into a new phase, built on machine learning and AI technology, making its results much more precise, timely and actionable. At this stage of development, it’s not a question of if such technology should be used, but how it can be adopted.   

Data-driven Decisions for an Accurate Pricing and Inventory Strategy

While market intelligence focuses on the trends, styles and attributes of products, pricing also needs equal research and deliberation to make sure it resonates correctly with where consumer sentiment lies. Price too low and you may lose out on revenue and diminish your brand’s standing, too high and you could find yourself with deadstock. Price planning incorporates several elements, such as competitive pricing, lifecycle pricing, and demand pricing. Each of these key areas requires accurate and timely data to make the right decisions when it comes to setting and changing prices.  

Similarly, inventory planning uses data to make decisions when it comes to all steps in the production and/or buying process, from initial allocation and replenishment to re-ordering and stock rebalancing. Greater forecast accuracy comes through product attribution enrichment. Centric Pricing & Inventory provides a solution for harnessing and leveraging such data points, ensuring a more accurate steady stream of information for making decisions when it comes to inventory quantities and pricing.  

Enhance Pricing Strategies Using E-commerce Analytics

In the dynamic landscape of e-commerce, gaining a competitive edge requires more than just understanding historical trends—it demands a forward-thinking approach that is powered by comprehensive analytics. Such data can shape decision-making surrounding pricing, assortments, and promotional strategies and lead to enhanced market positioning and greater adaptability. 

Unlocking Competitive Insights 

Having the ability to quickly review your own historical assortments as well those of your competitors can deliver a more nuanced understanding of the market, one that allows you to set your discounting and assortment strategy with greater confidence. How would it benefit your brand, for example, to have the ability to break down data by average discount, total range, and markdown along with discount penetration? Which retailers had 100% discount penetration? And which had the lowest? Detailed data insights are extremely important when exploring the breadth and depth of assortments. But how can you possibly do this manually when some brands have a six-figure SKU quantity? The industry has passed the point where teams can manually collect and curate data in any useful fashion. But with AI and machine learning capabilities, you can look at trends and changes in markets, discounts, pricing, and assortments by brand, country, or region. This information allows you to then more accurately predict details such as how long and how much discounting there will be and forecast out through the next year. In our success story, we detail how EMEA retailer Lindex utilized Centric Market Intelligence to identify trends early, refine product offerings, and expand strategically. 

Leave Backward Thinking Behind for a Profitable Future.

For decades, pricing and inventory planning, as well as market intelligence, were limited by what could be compiled through manual research. Many businesses continue to use this strategy, although it is far from comprehensive or accurate, which means that many critical decisions are made with incomplete, wrong, or dated information.  

Today businesses are rapidly switching to a new model of research that leverages the latest advancements in machine learning and AI. In fact, your direct competition may already be employing these capabilities. One of the main benefits of using such a real-time, comprehensive tool is that it allows an entire planning department to make the profound switch from planning that is backward-facing, resulting in gut-feeling and guesswork decision-making to a more proactive and strategic approach powered by precise and accurate data.     

Centric’s Pricing & Inventory and Market Intelligence tools support this forward-thinking approach, empowering teams to focus on where the brand will be at the end of the season, rather than where you have been and leaving the future up to pure chance. Experience the predictability of using data and insights to forecast future demand and competition. Think of the difference much like a weather forecast. Would you rather know what the weather was like this time last year or would you prefer that your forecast used the real time data from the current conditions to make an informed prediction about future weather patterns? What would help you to plan better? Centric’s machine learning demand predictions use actual forecasting instead of backwards-oriented data for decision-making 

Say goodbye to inefficient spreadsheets and welcome a user-friendly dynamic data delivery interface that is intelligently designed specifically for retailers. Remove the need to allocate staff and resources for manual searches and enjoy the ease of automation and real-time information which helps to reshape business models and the broader value chain. In today’s ever changing retail environment, you need to be able to rely on a fast, transparent, and adaptable system for your intelligence and planning.  

With Centric Software, your AI system learns and grows with your brand to continuously become more aligned with your data needs and output. Continuously updated data means that your team will be able to respond with agility to unforeseen developments or emerging trends. And when it comes to testing and exploring possibilities of specific decisions, you can run through a variety of simulations to optimize strategies and Incorporate future pricing decisions to see where models end up, the epitome of future-focused decision-making.  

Benefits of Future-Focused Proactive Planning Compared to Reactive Thinking  

  • Use actual forecasts instead of guesswork based on old data 
  • Quickly respond to unforeseen developments and pivot swiftly as the market evolves 
  • Greater confidence in decisions thanks to simulation of scenarios, allowing for optimized strategies 
  • Analyze all aggregation levels from corporate view down to single products, locations or units. Localized event and weather data can effectively influence and predict user demand.  

Our webinar illustrates how one multi-brand retailer, which manages pricing across 35,000 articles and five brands, used Centric’s continuous integration to experience a 9% gross margin increase. Learn more by watching the replay. Competitive pricing data enables, with just a click, competitor pricing matching down to a specific article. On the strategic side, explore different goals from beating to matching your competitor to not be outpriced and left with too much inventory. 

Onboarding is Easy With Centric Pricing & Inventory

Centric Pricing & Inventory™ takes a customized approach to each business’s pricing and inventory planning. The system is optimized for your specific goals, business rules, brand events (promotion, store openings, closings) and automation controls. With Centric Pricing & Inventory, you can integrate client pricing data enriched with competitor pricing information, market pricing, weather data and social media trends, for a comprehensive and dynamic tool. The system is designed to continuously ingest data to train itself to create increasingly more intelligent and intune models. Businesses across the globe understand that to remain competitive, the most current data tools must be leveraged to collect and curate massive quantities of information into usable insights that fuel better, more accurate decision-making. With Centric Pricing and Inventory and Centric Market Intelligence™, you can make the switch to a future-focused, proactive planning system that improves deadstock quantities and sell-through rates, leading to more successful sales cycles and collections.