Explorium has recently wrapped up an engagement with Petit Bateau around the AI in Action program. In fall 2019, Petit Bateau, led by Brand Director (and former Management Associate) Phil Hui, started to experiment with different ways to use better data and artificial intelligence to improve sales forecasts, reduce overstock inventory and increase sell-through. Through Explorium’s Pilot2Scale program and partner network, the team scouted for and engaged a local start-up, Chain of Demand, which possessed the required technology and platform. The proof of concept was partially financed by the Academy’s AI Co-Fund and was carried out in late 2019.

The POC covered approximately 400 SKUs across a fixed number of product categories, looking at variables such as color and size. Over the course of the POC, the platform helped to improve prediction accuracy by nearly 30%, reduce surplus inventory by 60%, and increase sell-through by 40% for some lines. In short, the exercise demonstrated that combining macro data inputs such as birthrates and weather patterns with product sales history could properly hone an algorithm to produce actionable business insights.

The team is now operationalizing the model working directly with the vendor. Sunny Wong, Petit Bateau CEO, commented: “In business operations, the hardest part is sales forecasting which drives inventory. I have seen so many businesses fail because sales are forecast with little or no basis. I am glad to see [us] spending time on this, which will be a significant learning experience.”

If you would like to learn more about this project please reach out to hello@explorium.hk.

Tags: Data Science