Evo, an Italian-English company and leader in predictive analytics, has shown that it’s possible to sell more (4%) while reducing inventory levels by 12%
Turin, September 2020
Increase sales by reducing inventory levels. It is all thanks to the forecast analyses based on artificial intelligence and a critical human-machine alliance. The solution for an efficient supply chain comes from Turin, recently named the Italian capital of Artificial Intelligence.
Evo Pricing, a company started in Turin in 2013 out of the ideas of its founder and CEO Fabrizio Fantini, develops software for predictive analysis. In an effort to support companies in optimizing the allocation of articles in stores, setting sales prices, replenishing stock, and analysing historical, real-time, and forecast data, Evo has reached a new goal. This summer which unfortunately will go down in history as the summer of the Covid-19 pandemic and its dire consequences on the world economy, Evo has managed to validate an innovative and winning model that solves the problem of excess warehouse stock and its impact on corporate profitability.
“For the first time, this kind of process has been proven and validated. The strategy is to sell more with less inventory overall, thanks to the understanding that each store needs only very specific products and sizes every day based on its local, seasonal demand”, said Fabrizio Fantini, founder and CEO of Evo.
Evo Pricing initially integrated the client company’s product, store, and customer attributes into the Evo system by matching the company’s internal data to Evo’s proprietary data model that includes market benchmarks, industry statistics, social trends, and customer profiles. Armed with a more accurate customer demand forecast, overloading each store with stock early in the season is no longer necessary. “While it is impossible to anticipate customer needs before they emerge, we can increase customer relevance by delivering the right products to the right stores at the right moment– crucially also by exchanging inventory across stores when economically profitable,” said Fantini.
In this way, unsold items from one shop become profitable for another. A more impactful and accurate supply chain system delivers positive ROI quickly.
The effectiveness of the Evo solution was confirmed by Boggi Milano, a company that has been creating men’s clothing, shoes and accessories since 1939 and an expression of Italian sartorial excellence. “Within the initial seven-week A/B test, the new automated replenishment system increased like-for-like sales by 4 percent while reducing inventory levels by 12 percent,” said Alessandro Pozzi, Chief Operations Officer, Boggi Milano. For inventory transfers across stores, Pozzi saw “a whole order of magnitude improvement in the sell-through of products after they were transferred to a different store, compared to before. This reinforced our confidence in the predictive abilities of this innovative application of artificial intelligence beyond any reasonable doubt.”
Within just seven weeks, Evo Pricing’s Microsoft-powered solution simplified inventory management, reduced overstock and fragmentation, and eased warehousing and storage issues— all while increasing full-price sell-through and revenues.