How to Evaluate AI Software For Retail Merchandise Planning and Inventory Management

Evaluating AI (Artificial Intelligence) solutions for solving retail planning problems can be a complex task, as there are many different options available, each with its own unique features and capabilities. However, by following a structured approach, you can ensure that you choose the best solution for your specific needs.

6 Steps To Evaluate AI Retail Merchandise Planning Software

Step 1 – Know What You’re Trying To Achieve

The first step in evaluating AI solutions for retail planning is to clearly define the problem you are trying to solve. This will help you to identify the specific features and capabilities that you need in a solution. For example, if you are trying to optimize inventory levels, you will need a solution that can analyze data and make predictions about future demand. If you are trying to improve buying and pricing strategies, you will need a solution that can analyze consumer behavior and preferences.

Step 2 – Do Your Research

Once you have clearly defined the problem, you should research the different options available. This can be done by searching online for AI solutions for retail planning, or by consulting with industry experts. It’s important to keep in mind that there are many different types of AI solutions available, such as predictive analytics, natural language processing, and optimization tools. Each of these solutions has its own unique features and capabilities, so it’s important to choose one that specifically addresses your needs.

At a high level, the most important characteristic in artificial intelligence solutions that you need to consider is around Explainability and Actionability.

AI Explainability: Do the results of the machine learning algorithms get presented to users in a way that is easily understood and in plain narrative human-readable English? Or do your users need to have advanced statistical or data science degrees to understand and interpret the results (we hope not!).

AI Actionability: Can your users then easily take clear action based on the insights and recommendations that are provided from the algorithms? Or will they need to decipher the recommended next best actions and then “swivel chair” between a multitude of systems to carry out the needed actions? (here again, we hope not!)

AI Merchandise Planning Software Capabilities Checklist

Specifically, you should also develop a scorecard to map the software’s features around key retail merchandise planning software capabilities such as those listed below:

• Demand Forecasting
• Demand Signals from POS data, Pre-Orders, E-Commerce (e.g. Shopify), Social Media
• Shopper Trend Identification
• Promotions Planning
• Markdowns Planning
• Inventory Planning
• Shortage Identification & Management
• Shipment Tracking
• Assortment Planning
• New Product Forecasting
• Open To Buy Planning & Analysis
• Pre-Season & In-Season Planning
• Profitability Analytics
• Retail Analytics Dashboards
• Depending on your specific industry, you may also want to understand support for things like style-color-size, units of measure, perishable products, etc

Step 3 – Evaluate Performance

After researching different options, it’s important to evaluate the performance of the solution. One way to do this is by using a test dataset or a pilot project. This will allow you to see how the solution performs in a real-world scenario, and to identify any issues or limitations. It is also important to consider the scalability of the solution, as your business may grow and change over time.

Step 4 – Integration is Key

Another key factor to consider when evaluating AI solutions is the level of integration they offer with other systems. It is important to choose a solution that can integrate seamlessly with other systems, such as Shopify or other e-commerce systems, ERP systems, POS systems, Social Media, etc to ensure that you can access the data you need to make informed decisions.

Step 5 – Make Sure You Have Support

It’s also important to consider the level of customer support offered by the vendor. Choose a vendor that offers a high level of customer support, including training, education and ongoing assistance. This can help to ensure that your team is able to effectively use the solution to achieve your goals.

Step 6 – Look at The Costs

Finally, consider the cost. AI solutions can be expensive, so it’s important to choose a solution that fits within your budget. However, it’s important to remember that the cheapest solution may not always be the best fit for your business. Look for a solution that offers a good balance of features and cost.

In conclusion, evaluating AI solutions for solving retail planning problems can be a complex task, but by following a structured approach, you can ensure that you choose the best solution for your specific needs. It’s important to clearly define the problem you are trying to solve, research the different options available, evaluate the performance, consider the level of integration, customer support and cost of the solution, and choose the one that best fits your business needs. By doing so, you can optimize inventory levels, improve buying and pricing strategies, and gain valuable insights into consumer behavior, to ultimately increase your bottom line.