Demand forecasting solution helps retail chain increase sales


Company Overview The client is a reputed retail chain having several stores across USA.



Problem Statement & Challenges

Inventory management is the most critical aspect of retail business. Overstocking items led to higher inventory costs while understocking led to quicker sales of items.

As a result, the client faced a few challenges –


  • Reduced operational efficiency
  • Higher cost


Objective

To reduce the shelf life of perishable and non-perishable items using advanced analytics techniques and forecast the demand for each combination of the store and product.



Our Solution/Approach

The client provided a dataset which had information about transactions, products, store information, and sales returns. Data was collected since 20 months which pertained to about 59 million transactions. The transactional data for 20 months provided sufficient insights and helped to predict future demand.



The Solution Entailed

Exploratory Data Analysis to understand seasonality and trends, stores with highest sales in a particular duration, geographic location of the stores, items on promotion, etc.



Results / Impact

The analysis and study helped the client in the following ways –

  • Understanding stocking requirements of perishable vs. non-perishable items
  • Incorporating external and internal factors that will affect the sales of the retailer
  • Demand/sales forecast of the items in each category/subcategory to the SKU level
  • Planning purchase efficiently and better maintenance of the inventory
  • Reduced inventory meant reduced wastage
Casestudy Infograph Retail store