TOP-5 demand forecasting solutions for retail in 2023

Demand is the most important factor used to forecast sales in retail. Some companies rely on their own models and the experience of their specialists, while others choose software solutions.

Specialized demand planning software helps to analyze several variables at once to increase the accuracy of forecasts. This makes the replenishment process more efficient and helps to reduce stock-outs as well as overstocks. That is why a large number of retailers automate demand planning with modern AI solutions.

AI-based software works comprehensively, simultaneously using different analysis methods. In particular, algorithms can take into account the results of past sales (along with losses and targets), the current market situation, changes in pricing, seasonal demand, and much more. As a result, the accuracy of forecasting each product item increases significantly. The advantage of machine learning is that the model is self-learning and self-improving, increasing the accuracy of forecasts every time.

Solutions used for demand forecasting should include:

• consideration of many demand factors and their impact on the final forecast;
• the possibility of multi-access with an appropriate hierarchy of users;
• options for demonstrating graphical or segmented results;
• opportunities for fast and flexible integration, as well as a high level of service support.

The modern software market offers solutions that meet these criteria. We have reviewed the most popular programs in 2023 that have built-in functions for retail demand forecasting.

LEAFIO Demand Forecasting

https://www.leafio.ai/demand-forecasting/

LEAFIO AI Retail Solutions is a software company that develops software for supply chain optimization and automation of retail business processes. Demand Forecasting is part of the LEAFIO Inventory Optimization module and is the basis for implementing the auto-order function. This is a convenient cloud-based solution for calculating potential demand for each product based on artificial intelligence algorithms, which allows you to adjust inventory levels in a highly volatile environment.

The main advantages of demand forecasting from LEAFIO Inventory Optimization:

• Making strategic decisions based on data 

Using accurate ML-based forecasting enables informed decisions regarding product range expansion, opening new shops, and planning annual budgets and KPIs, which significantly reduces the risk of miscalculations and lost profit.

• Responding promptly to demand fluctuations 

The forecasting model enables early identification of seasonal spikes, leading to more precise planning of stock levels and avoiding over-stocking or stock-outs.

• Boosting sales and customer loyalty 

The system ensures maximum availability of goods for customers and manages product assortments based on their preferences, thereby increasing the likelihood of repeat business.

• Cutting costs and increasing profits 

Predictive accuracy ensures optimal inventory alignment with business needs, reducing surpluses, releasing frozen inventory, and minimizing product write-offs, resulting in leaner resource utilization.

In addition to the above, the developer's conceptual advantage is its business approach to implementing its solutions. Despite the fact that LEAFIO's solution uses modern forecasting algorithms based on machine learning, which increases the forecasts accuracy, the company does not place much emphasis on this. The developers point out that the overall business effect of the implementation is much more important - the impact on turnover, inventory value, surplus, lost sales, etc. In other words, the company believes that for effective management and maximizing the financial effect of implementation, it is important to have a complete picture by analyzing all key KPIs, not just forecasting accuracy.

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The system is suitable for both large corporations and small businesses. Pricing is flexible and depends on the number of users, stores, and warehouses. The system implementation takes up to 6 months on average.

Blue Yonder Demand Planning

Blue Yonder's demand forecasting module allows you to manage warehouse inventory, predict changes in demand depending on external and internal factors, and reduce risks for retailers. To do this, the system uses the principles of multidimensional analysis and planning

Demand Planning is a part of the Luminate platform, a comprehensive solution designed to modernize supply chain and inventory management.

Demand Planning by Blue Yonder provides the following benefits:

• increased profitability due to accurate demand forecasting based on micro-segment analysis;
• inventory optimization: precise planning of demand and, accordingly, the assortment with dynamic segmentation to reduce the number of balances;
• revenue growth through better supply chain management and the use of potential market opportunities predicted by machine learning.

Blue Yonder is a long-standing player in the retail automation market, and users generally have a positive opinion of the Demand Planning module. In particular, they praise the quality of after-sales service, extensive integration capabilities, convenience and ease of use, and intuitive navigation (g2.com). It is worth noting that the implementation time (1 to 2 years) and the cost of the product are more suitable for large corporations than for small and medium-sized businesses.

RELEX demand planning software

RELEX software provides accurate demand forecasts by automatically capturing variables that affect the result. The product can be used for planning trade operations, deliveries, and merchandising. 

RELEX was founded in 2005. Its activities are focused on helping consumer goods brands and retailers. 

Among the advantages of RELEX demand planning software, the developers themselves highlight:

• an automated forecasting process based on artificial intelligence and machine learning algorithms. At the same time, planners can combine the results of the program with their own experience and vision;
• solving key forecasting problems related to the introduction of new products, promotions, price changes, etc;
• multichannel use. For example, you can use software to plan the demand for online orders;
• the ability to combine the principles of short-term forecasting and strategic planning into one continuous process.

Users praise the flexibility and convenience of RELEX demand planning software. The program is able to solve a wide range of tasks due to a large number of settings (softwareadvice.com). The system interface is quite user-friendly and functional, although it is not designed for small screens and mobile devices. As with the previous vendor, given the cost of the solution and the timing of its implementation, it is more suitable for corporations and large networks where quick financial results from implementation are not too critical.

Related: Supply chain replenishment: Enabling real-time supply and demand

Kinaxis Demand Planning Solution

The tool is part of a platform designed for supply chain planning. The developers note that the Demand Planning app, which is powered by artificial intelligence, makes the process more accurate. To calculate the result, the system uses data from various sources: external and internal. 

In addition to creating accurate short- and medium-term forecasts, Kinaxis software can:

• automate and continuously improve the forecasting process using machine learning algorithms;
• achieve a balance between high customer satisfaction and positive revenue dynamics through proper planning;
• use advanced statistical forecasting for new products, holidays, promotions, etc;
• predict the effectiveness of all marketing campaigns in terms of reducing costs and maximizing sales.

Kinaxis is one of the pioneers in the implementation of software for planning the work of a retailer at all stages: from supply to sales.

Users call Kinaxis Demand Planning flexible and user-friendly software that meets the needs of the industry (g2.com). It is also noted that the implementation will be more efficient and fast if the company has a developed IT department with experienced specialists.

SAS Demand Forecasting

This is a comprehensive demand forecasting tool that can be used not only in retail but also in other areas (in particular, for human resource planning). SAS Demand Forecasting for retailers provides accurate forecasting for making informed decisions. 

The advantages of the solution from SAS include:

• customization for companies with any trade volume;
• automatic creation of weighted, statistically valid consensus forecasts;
• analysis of sales history and planning of future events based on the "what if" principle;
• monitoring the effectiveness of forecasting. Identify patterns between demand and data related to pricing, promotions, supply, etc.
• The company offers programs for data integration, storage, analytics, and business problem solving within a comprehensive AI-based platform. 

Users like the ability to create forecasts based on a large number of factors and convenient data structuring (g2.com). A fairly large number of reviews are dedicated to high-quality and fast service support (trustradius.com). At the same time, users have a wish to increase the number of training modules that could facilitate the speed of learning and using the product (g2.com). 

Conclusion

Demand forecasting software helps to make management decisions, plan purchases, replenish inventory, and optimize supply chains in the most efficient way. Ultimately, this helps to increase profits and reduce costs, which is the basis for a successful business. 

However, to achieve these goals, it is important to choose the right software. The key criteria are adaptability, high-quality support, flexible pricing, and the ability to analyze a large number of external and internal factors that affect demand. In addition, it should not be forgotten that the volatility of the retail environment does not allow relying only on forecasts in building business strategies and operational management. In a volatile environment, even 100% forecast accuracy may not lead to the desired results if key inventory management KPIs are not in order. Therefore, it is important to use an integrated approach and deep analytics.

It is important for retailers not only to find the right solution, but also to be sure that it is easy to integrate and get results quickly. In these conditions, products that can be implemented and get the first results in six months look more advantageous than programs that take one to two years to fully configure.