Demand Forecasting

Major North American retail chain increases forecasting accuracy

Client profile

Client
Major Retail Chain

Products
Demand Forecasting

Industry
Grocery

Location
North America

A major top 10 retail chain in North America leverages Daisy’s Demand Forecasting solution to improve their forecasting accuracy. Already well on the journey to fully leveraging the power of AI, the retail chain implemented Daisy’s solution as a comparison.

The challenge

The merchant team had a history of less than acceptable forecasting accuracy and all the accompanying downstream impacts that it entails.

Our solution

With two other Daisy AI-Powered solutions already implemented in their promotional process, testing the Daisy approach was straightforward and quick. The Daisy AI team reviewed the history of the retailer’s TLOG data which was already in use by the other Daisy modules. The historical TLOG was used as a “training set” for the Daisy team to rapidly build the connections and understanding of customer purchase behaviour at the store’s regional and national levels. Through this deep understanding, Daisy was able to forecast with precision the impact that a promotion(s) had across multiple metrics including sales lift, Halo lift, transaction lift, forward buying, the effect on other promotions, seasonality, etc.
The retail team wanted to understand and accomplish two things: 1. Evaluate the accuracy and value of Daisy’s forecast compared to the existing approach they had been using for many decades. 2. Move their promotional process further along to a more autonomous process while saving their merchants time and effort.
Daisy's insights allowed the merchant teams to better assess the Total Store Impact (TSI), which is the full store impact of their proposed promotions, well ahead of time. Furthermore, it allowed the merchant team to play out different strategic scenarios on a more tactical level by simply substituting low performing promotions with better ones to improve overall business results. The last phase of the implementation was a simple comparison of accuracy as well as a deep-dive of the results the two approaches provided.

Results:

After 3 months, Daisy was able to successfully prove the value added to
the business. Client engagement was increased, along with positive results
after applying Daisy’s TSI methodology and forecasting. Daisy’s forecasts replaced the retailer’s old forecasting approach and are established as a key agenda item in weekly marketing meetings where all ads are reviewed and optimized based on Daisy’s recommendations.

>6M Increase in Sales Lift
By working with Daisy to improve their forecasting, the retailer experienced a sales lift of more than $6M.
23% Decrease in Forecast Error
Additional 5% Decrease in Forecast Error
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