How AI driven automation can help Retailers and Brands quickly pivot during Covid
Updated: Nov 11, 2020
Buying and inventory management automation can help retailers and brands react quickly, reduce markdowns and liquidations, improve customer experience, and drive profit
Abhinav Chandra, PredictSys Inc, CEO & David Lawrence, PredictSys Inc, Adviser
November 3, 2020
The fashion industry has been one of the hardest hit by COVID-19. The unprecedented 32% decline in first half sales year-over-year has not been distributed consistently across categories. Below we present data that details the contrasting fortunes of two categories within fashion – Women’s Jeans and Men’s Sweatpants. We highlight how buying and inventory management automation can help retailers and brands react quickly, reduce markdowns and liquidations, improve customer experience, and drive profit.
Contrasting fortunes of two fashion categories
Below we present how COVID-19’s effect on people's mobility has had a significant, but contrasting impact, on two fashion categories - Women’s Jeans and Men’s Sweatpants. “Change in people mobility” is defined as the percent change in people’s engagement with retail or recreation activities compared to an average period prior to the pandemic (Jan and Feb 2020).
Women’s Jeans case study
Chart 1: Change in sales and people mobility
The chart above shows that from 2020 Q1, the Women’s Jeans sales trend for a top 10 brand is highly correlated (95% correlation) with the change in people mobility. For Q4 we predict that Jeans sales for this brand will decline 8% from Q3 level since mobility is forecasted to reduce and reach Q2 levels by December.
Men’s Sweatpants case study
Chart 2: Change in sales and people mobility
The chart above shows that from 2020 Q1, the Men’s Sweatpants sales trend for a department store is highly correlated (-73% correlation) with change in mobility. However, in this case the correlation is negative, i.e., the decrease in mobility is driving increased sales. While the correlation with mobility is slightly less than that in Jeans, change in mobility is still the biggest driver of change. For Q4 we predict that Sweatpant sales for this department store will increase 25%+ from Q3 level with the predicted drop in mobility.
For the above two categories, as buyers and planners are forecasting specific sales trends during COVID-19, they must incorporate mobility as a driving factor to maximize their accuracy and fully capitalize on emerging trends.
Increased automation in buying and inventory management can help identify and address emerging drivers of demand and drive profitability
We at PredictSys incorporated mobility data in our automated buying and inventory management platform in April 2020. Despite the ongoing pandemic, we have generated buying and inventory management recommendations with greater than 90% accuracy. In contrast to buyers/planners looking through sales data and sell-through reports to reactively determine the impact of an emerging trend, our AI based platform automatically and continuously evaluates factors driving sales and updates buying and inventory management recommendations daily. This enables retailers/brands to dramatically improve accuracy, take faster action, reduce liquidations and markdowns, reduce stockouts, improve customer experience, and increase profit.