Goods management and an optimal pricing system are only two of the topics currently being addressed by retail. In addition to these, there is the online channel, which you should connect to your stationary trade to provide an integrated and satisfying shopping experience. We demonstrate what contribution predictive applications make to future-oriented commerce.
Stationary trade, online shop, multi-channel merchant: no matter how digital a retail company is, all segments face enormous challenges. How can we succeed in offering our customers a unique and consistent shopping experience online and offline? In order to do so, you first have to know where your customer is and what he/she is expecting from you, the merchant. What are you offering and on which channel do you best market to your customer? If he/she comes in your shop, you definitely want to have the desired goods on the shelf. However, for example, in the retail food sector, you do not want to end up with too much so that in the end many goods must be written off. Industry representatives continue to view optimizing goods management as a key challenge. There is also much potential in dynamic pricing. Which price would be ideal right now – as high as possible without deterring anyone?
The answers to these questions, which is clear to retail companies, are inherent in the data that they continuously collect in vast amounts. The data store grows by the hour and is often not organized. It is therefore utterly pointless to work on it manually, much less to attempt to draw any meaningful conclusions from it. Predictive applications are what can create profitable capital from the data. With Blue Yonder’s price optimizing solution, based on Predictive Applications, merchants can automate many decisions. It is possible to integrate this software into different ecommerce systems. Because of this, the application can take a company’s own objectives into account, such as increasing one segment’s market share, and it can also consider the individual particularities of customers and competitive prices.
Blue Yonder’s price optimization solution tests and measures the connection between changes in price and demand. It automatically defines income or profit maximizing prices. The software uses current and historical sales data as well as product master data. It continuously optimizes and analyzes. It goes far beyond solutions that only match the competition or set rule-based prices. Dynamic Pricing allows you to set thousands of prices every day.
Automated Goods Planning
One of the greatest challenges for a merchant is optimizing goods management. Blue Yonder’s automated replenishment planning makes it possible to keep the optimal amount of goods available using automated decisions and accurate forecasts. Predictions take into account all the relevant factors, including promotions, the weather or holidays. Then the software calculates the daily consumption on a granular level and determines the resultant amount to order from it. After comparing it with supplier conditions as well as internal logistical processes, the main material planning can begin the automated order. The results are satisfied customers, because the goods are always available, and increasing revenue with minimal capital commitment.
For the merchant, replenishment is connected to two important challenges: demand is not predictable and the supply chain itself is veritably complex. Good supply chain processes are driven by demand. This requires the forecasting of future demand. At the same time, the complexity within the supply chain means that restrictions must be considered as well as compromises made between many competing KPIs.
Off to Munich!
Would you like to find out more? Blue Yonder founder Prof. Dr. Michael Feindt can give you a short summary at the LOCA Conference, where everything revolves around location-based services from February 2nd and 3rd 2016 in Munich. Experience the talk about “How machine learning revolutionizes replenishment & pricing!” by Lars Trieloff, Director Product Management at Blue Yonder. He reveals “How to optimize prices using predictive applications.” Thomas Friese, Senior Project Manager at Otto, talks about his experience with Blue Yonder’s Predictive Applications and how they are working effectively with the retail group’s pricing. Other interesting topics from the program at the LOCA Conference: how new technologies are changing business processes and what’s actually behind the catch phrase ‘Warehouse 4.0’? We look forward to two days of innovation in retail and also to seeing you there, so don’t miss it!