Retail and unintended consequences on nature…
According to NASA, Global Warming is increasing at an unprecedented rate, and warming temperatures and a rise in ocean heights are almost inevitable. Due to poor demand planning, the fashion industry ends up “overproducing by approximately 30%-40% each season”. This chronic overproduction has immense negative effects on the environment, “emitting 1.2 billion tons of greenhouse gasses” into the atmosphere each year.
73% of retailers struggle with inaccurate inventory forecasting. This forecasting inaccuracy is a leading cause of carbon emissions in retail today. Year after year, retailers and manufacturers end up with excess inventory at the end of each season, because of flawed assortment and allocation planning. This leads to unnecessary markdowns, additional inventory carrying costs, larger store and warehouse footprints, and lots of wasted capital and human resources from a business perspective. Not to mention that luxury brands are actually known for destroying excess inventories to maintain brand authenticity and meet changing customer demands.
Fashion retail has played a major role in the perpetuation of climate change, which is why investors, activists, and increasingly consumers, are switching to businesses that adhere to Sustainable Development Goals (SDG) and Environmental, Social, and Governance (ESG) criteria. In fact, 87% of consumers want brands to act now to encourage future sustainability.
The good news is that retailers are now in an advantageous position to make decisions that could ensure the consumer goods industry embraces a more environmentally sustainable attitude.
Advanced demand forecasting to the rescue
In today’s world, data is key to driving sustainable growth and being labeled an “ethical brand.” Through predictive analytics and AI-led demand forecasting, retailers can meet 45% of their carbon reduction target and eliminate wastage. Better forecasting doesn’t just allow them to reduce waste and lower carbon usage; it also allows businesses to better meet consumer demand and reduce operating costs. Better forecasting leads to more effective assortments – and greater visibility of pricing, markdowns, and operating profits. By deploying predictive analytics to enhance forecasting, the entire supply chain reaps the benefits of global waste minimization.
Doing well while doing good – meeting ESG goals actually drives the bottom line!
Our customers are consistently delighted by the opportunity to improve top and bottom-line performance while also delivering on ESG goals. It’s a myth that ESG investments are just another expense or tax on your business. Building improved forecasting into your business systems translates directly into improved inventory turns, lower inventories, reduced markdowns, optimised supply chain volumes, and most importantly, from an ESG perspective – a sharply reduced carbon footprint!
Sustainability is embedded in everything we do
Impact Analytics’ end-to-end SaaS Merchandising platform empowers your business to achieve sustainability goals and improve your business performance in the process. IA’s AI-guided forecasting models allow retailers to look beyond historic data, respond quickly to demand fluctuations and changing consumer preferences, and generate accurate demand forecasts. Using IA’s robust AI-powered forecasting technology, retailers can eliminate wastage by 6%, bring about a 60% reduction in planning time and increase their gross margin by 4%. Win the battle for accurate forecasting and only produce what your consumers want.
Leading retailers have implemented IA’s AI-driven forecasting solution ForecastSmart, leveraging the powerful algorithms and patented visual components to help them understand the impact of different variables on-demand, and adjust these levers in real-time for effective demand planning to meet their ESG goals. IA’s customers then find that value is amplified when they adopt additional tools like AssortSmart, PriceSmart, and InventorySmart, and realize synergistic benefits
Impact Analytics is committed to interweaving sustainability into its platform and driving a positive impact by helping customers reduce their carbon footprint. Let us show you how we can help your business be an ESG winner.
