This insightful article in Progressive Grocer from Thad Rueter looks into the future of AI in assortment planning, which has lagged behind other areas of retail, such as pricing, promotion and markdowns, in adopting AI to speed and automate workflows while delivering measurable business impact.
Yet the existing adoption of AI-based pricing can be used to assortment planners to their advantage with, among other things, real-time insight into Key Value Items (KVIs). Thad notes a case in point: ‘“In the near term, AI-based pricing keeps retailers current with fast-changing [key value items] that have emerged during the pandemic,” notes Cheryl Sullivan, president of Burlington, Mass.-based DemandTec by Acoustic, which provides AI-based retail pricing technology. “These insights can assist assortment planners in getting the right items to the right stores to reflect current shopper demand signals, instead of just relying on hindsight with 52-week trailing demand data.”’
Thad also spoke with Cheryl about AI’s insights into cross-item effects: ‘Sullivan says that such technology can help assortment planners leverage the forecasting found in what she calls “science-based pricing, which accounts for transference of demand, including halo and cannibalization effects, that can result if an item is understocked, creating stockouts, or overstocked and languishing at the shelf.”’