As the coronavirus outbreak continues to spread, retailers become increasingly worried about its impact. Disruptions in the supply chain complicate replenishment. Many retailers fear stockouts as supplies from the earliest affected countries dry up, while they simultaneously struggle with overstocks in stores experiencing unexpectedly low traffic. Demand, on the other hand, has become increasingly volatile as consumers avoid going out due to fears of infection— or in many markets, government-mandated quarantines.
In fact, the OECD predicts that the COVID-19 pandemic could reduce economic growth this year by as much as half the initial forecast. No wonder retailers everywhere are worried about what this means for their own survival. Evo business scientists will spend upcoming weeks helping our clients mitigate the impact of this crisis. While we may not be able to eliminate the economic damage entirely, there are three strategic advantages that Evo’s AI delivers to our partners during a crisis.
1. Adapting to market changes at the earliest possible stage
Evo’s AI pulls a massive amount of data from external sources and processes that information such that patterns emerge at much earlier stages. It is why Evo’s forecasts are, on average, 72% more accurate than those made using traditional methods. This early detection makes it possible to put in place strategies quickly that will mitigate emerging threats.
Evo tools learn very quickly from data, so we are also able to adapt our strategy very quickly to respond to any crisis.
-Elena Marocco, Evo Data Scientist and Head of the Supply Chain Team
During this new coronavirus pandemic, companies need to respond nimbly to every market change in order to survive. Evo is dedicated to helping our clients do so without stretching their already overwhelmed team’s resources. Our AI delivers clear insights on changes in supply and demand automatically, easing the decision-making process for struggling retailers.
2. Adopting new business goals to prioritize survival over margin yet maintaining long-term growth focus
Only 14% of companies in economic crises manage to grow and even thrive during economic downturns, according to the Harvard Business Review. All those that did balanced survival needs with a long-term focus. While this crisis is likely to be slightly different than those over the past 35 years, companies will still need to balance these competing needs.
Evo’s tools can help companies simulate outcomes based on pricing and supply chain choices to better forecast which need is more significant in any particular moment. Whether managers are deciding which products to mark down and how much or identifying which stores are likely to see revived sales and therefore need additional products first, Evo’s algorithm can provide a good sense of the impact of each option.
With more information available, companies can make deaveraged decisions, positioning them better to survive. In times of crisis, no company can afford to proceed blindly with any strategy. Evo’s tools equip executives to respond quickly and accurately to conditions on the ground as they evolve. When the average company experiences significant losses in terms of sales and margin during a crisis, it becomes that much more important to be relevant, not average.
3. Assessing competitor and market weaknesses to reduce company exposure
For the duration of the crisis, every retailer will face the same challenges. No single company is facing difficulties alone during this time; problems like low consumer spending and supply chain disruptions will equally weaken all competitors. Any retailer, therefore, has an equal opportunity to emerge from the crisis ahead.
Of course, all retailers do not face the same challenges during this crisis. While fashion and speciality and category retailers are likely to struggle, grocery and mass merchants have experienced substantial increases in sales. Evo’s algorithm takes these unique patterns into account so that companies can take advantage of the particular realities in their niche markets.
Evo’s clients are using our tools to wargame various scenarios and stay stable during this time. We are dedicated to positioning our partners to best emerge as the brands that survive— and even use this crisis to their advantage where possible.
We have to accept that the situation is severe and think backwards to understand who may not survive and ensure that our clients are not in the same situation.
-Fabrizio Fantini, Evo Founder and CEO
The COVID-19 pandemic has created exceptional difficulties for companies everywhere. Evo owes it to our clients to help them in their time of need and align our priorities with them. As everyone struggles, we have dedicated ourselves to doing everything we can to reduce the damage and help the economy recover. If you think Evo could help you, current client or not, reach out. We will only get through these tough times together.
About the author
Kaitlin Goodrich is Evo’s main storyteller who helps communicate Evo’s message to the world.
Kaitlin received her BS in International Affairs and Modern Languages at Georgia Tech and then an LLM in International Trade Law from the University of Turin. She worked in Latin America doing education outreach for U.S. binational centers and has since worked as a content writer for international clients.
In her free time, she likes to travel or curl up with a good book.