AI in Retail: See How Otto Embraced Innovation

IN Artificial Intelligence — 03 January, 2018

The Otto Group, the world’s second largest multi-channel retailer, has been on a game-changing AI journey since 2006. AI in retail, however, is not exclusively for global businesses with high budgets and vast investment resources, like Otto. It can revolutionize the performance of small, medium and niche retailers.

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Why AI in retail?

Investing in artificial intelligence is about being a future-focused, data-driven retailer. To manage shifting expectations of customers, retail artificial intelligence is something every merchant should be interested in.

Driven by strong leadership with a clear vision, the company has wholeheartedly embraced innovation. AI is a opportunity to optimize retail prices, powered by self learning systems that always return value. Otto’s data-driven solution continually adapts to changes in business strategy, evolving customer demands, and new trends in retail.

What did retail artificial intelligence do for Otto?

At any point in the product life cycle, there is an optimum price for a product. The real challenge is when to set it.

Otto now has a solution that continually learns and optimizes its data; that’s the key benefit of AI in retail. As Otto’s strategy changes, its competition adapts, its assortment fluctuates, and so does demand. Otto now has an intelligent system that helps it keep pace with business.

Otto first utilized AI in 2006; demand forecasting enables better merchandising decisions, sound pricing choices, and reduces its amount of stock. Today, a holistic automated replenishment and pricing system has converted Otto’s processes into a fundamental marketplace model advantage.

Why is automation crucial?

Using artificial intelligence and machine learning algorithms, Blue Yonder allows retailers like Otto to automate their pricing decision making, and boost their profits. With AI driving their merchandising processes, retailers can respond quicker to changing market conditions and customer dynamics, boosting revenues and increasing margins.

AI in retail allows businesses to:

  • Optimize inventory to reduce out of stock rates
  • Pinpoint the ideal price and elasticity for every SKU
  • Improve demand planning to make supply chains more efficient
  • Reduce write offs
  • Determine profit-increasing prices through the entire product life cycle
  • Increase sales and decrease returns
  • Enhance customer experience

Based on the results of intelligent data analysis, AI in retail automatically determines sales or profit-increasing prices throughout the entire lifecycle of each and every product, for every season.

Watch the video to see why Otto worked with Blue Yonder to use retail artificial intelligence to optimize its inventory, reduce its delivery times and return rates.



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We enable retailers, consumer products and other companies to take a transformative approach to their core processes, automating complex decisions that deliver higher profits and customer value using artificial intelligence (AI).

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