Unlock the Potential of Artificial Intelligence in Retail Demand Forecasting

Harness the Intuitive Power of Artificial Intelligence in Retail Demand Forecasting

It is widely understood that Artificial Intelligence (AI) automates processes that would otherwise require human intelligence and judgment. However, this is a very basic understanding of its capabilities. AI can solve many problems beyond generating content and automating tasks.

Legion WFM leverages predictive, deterministic, and conversational AI techniques to improve workforce management. Today, we’ll explore Predictive AI and its potential for improving retail demand forecasting. This type of AI uses historical data and machine learning to predict future and unknown values.

Key Summary

• Artificial intelligence in retail demand forecasting enables businesses to make faster, more informed decisions to meet their customers’ needs. 
• It culls through thousands of data points in minutes, something humans could never achieve. 
• As a result, management can devote more time to driving sales and less time to the cumbersome task of gathering and studying key data points. 

How AI Is Revolutionizing Retail Demand Forecasting

Using predictive AI to generate retail demand forecasts allows managers to see a clear, unbiased prediction of the future and plan accordingly. This leads to efficient labor allocation, improved manager productivity, and favorable employee schedules.

AI automatically learns new patterns and applies them to the future, ensuring accuracy and improving schedules. It can also synthesize large amounts of data to create hyper-specific forecasting models with an expediency no human can achieve. 

AI is pivotal in creating granular and accurate forecasts concerning foot traffic, dollars, or transactions. But what does it impact?

Improved forecasting leads to better employee scheduling—no more under or overstaffing. Also, labor plans are generated with the right skills to deliver on customer demand. A better forecast automatically improves business agility, accuracy, and labor efficiency.

Let’s look at these in more detail. 

Granular and Accurate Forecasts

Legion Demand Forecasting automatically synthesizes information on channels, demand drivers, and demand influencers to create accurate and precise forecasts that provide a unique model and forecast for every single driver and location. This includes information on how and when customers make their purchases, historical and actual sales numbers, location-specific events such as sales or promotions, and external events such as weather or holidays. 

Legion automatically understands and incorporates the impact of demand drivers and future events, eliminating the need to run complex calculations, pay high data fees, or use manual processes.

Whether you use manual or automated forecasting processes, it’s almost impossible to consider all of these factors across all retail locations and channels while live data changes. AI is necessary to make predictions with this level of granularity. 

Demand Forecasting continuously improves as new data is available. Updated forecasts and labor guidance are instantly generated while allowing human intervention. This allows large-scale enterprises to adapt and respond quickly to business changes by continuously re-forecasting and automatically regenerating labor guidance.

Legion AI-driven Demand Forecasting significantly improves forecast accuracy. For every 1% improvement in demand forecast accuracy, businesses can experience a 0.5% reduction in labor costs. 

Optimized Labor Planning

Legion WFM takes the auto-generated, highly accurate demand forecasts and automatically creates an optimal labor plan—no more mapping between labor models used by finance for forecasting and operations for scheduling. With no manual steps or “lost in translation” data issues, it creates an optimized labor plan for your business.

Legion WFM uses AI to empower managers with staffing guidance and labor insights. It automatically computes optimal labor hours based on on-demand drivers, labor models, compliance factors, and budget constraints and then configures to the task level, whether fixed or variable. 

Legion Labor Optimization also allows you to choose the optimal work role to fulfill the labor demand and perform the work while ensuring all compliance and pay rules are met. The result is the most compact labor plan possible. 

Legion Labor Optimization automatically computes optimal labor hours based on precisely forecasted demand and customer labor standards. The result is granular, down-to-the-minute task-based labor modeling across all channels that can be created automatically. Instantly predicting the fewest number of employees and the skills needed in 15-minute, 30-minute, and daily increments reduces labor costs and creates optimal labor plans. 

Increased Revenue

McKinsey data shows that a 10-20% improvement in labor forecast accuracy could translate into a 5% reduction in inventory costs, yielding a 2-3% increase in revenue.

When productivity metrics are built-in and automatically generated, it is easy to schedule employees who are top performers during peak periods. This can increase conversion rates, maximize sales, and deliver a better customer experience. 

The Evidence Is Clear: Artificial Intelligence Is the Key to Expansion

Retail demand forecasting can only improve with the aid of artificial intelligence. It reduces the immense number of hours of labor spent on scheduling and sales analytics. 

Humans will never be able to synthesize thousands of data points within minutes. 

With Legion Demand Forecasting and Legion WFM, you can:

• Improve and intelligently automate demand and labor forecasts using advanced AI. 
• Increase forecast precision so you can create optimal labor plans and better schedules.
• Achieve industry-leading forecast accuracy at a data set level by channel.
• Automatically incorporate external data and customer event data for the greatest accuracy.

Schedule a demo today to see how you can enable managers to spend more time out on the floor, increase sales, and fully support their employees.