AI for retail: How it transforms sales forecasting and inventory management

The retail sector faces increasingly complex challenges: consumers with changing demands, ever-expanding product portfolios, and a competitive environment that demands speed, accuracy, and efficiency.

One of the main challenges for retailers is striking a balance between maintaining sufficient inventory to meet demand and avoiding excess inventory that generates losses, especially in the case of perishable products.

In this scenario, AI solutions for retail have become a key ally in optimizing critical operations such as AI-powered sales forecasting and AI-powered inventory management.

A notable case is that of Grupo Pão de Açúcar (GPA) in Brazil, which adopted Google Cloud's Vertex AI to transform the way it manages its inventory and forecasts sales in an environment with more than 700 stores and over 60,000 products.

This example illustrates how artificial intelligence in retail is not just a trend, but a concrete tool that generates tangible results.

The problem: managing sales and inventory in a complex environment

Retail companies face a daily dilemma: how to accurately predict demand to ensure products are always available, without overstocking and generating losses?

In organizations like GPA, with thousands of items and hundreds of stores, complexity grows exponentially. An inaccurate sales forecast leads to two equally damaging scenarios:

• Stockouts, which impact the customer experience and reduce brand loyalty.
• Excess inventory, which increases storage costs and generates waste, especially in categories like perishable foods.

Traditionally, teams relied on basic statistical models or the experience of store managers to make decisions, which proved insufficient in an environment with so many variables.

The solution: Artificial Intelligence applied to retail

To solve this challenge, GPA implemented Vertex AI, the Google Cloud platform designed to train and deploy machine learning and artificial intelligence models. This solution focused on two key areas:

• AI Sales Forecasting: Using advanced algorithms, the system analyzes historical consumption patterns, external factors such as seasonality and promotions, and local variables in each store to offer much more accurate projections.
• AI Inventory Management: Based on these predictions, the system dynamically adjusts inventory levels, ensuring product availability and minimizing waste.

In an initial testing phase, applied to a limited number of stores and items, the results were overwhelming: greater demand accuracy and a significant reduction in out-of-stocks. These initial successes led GPA to expand the initiative to all its stores and products, thus consolidating a scalable model.

Benefits of implementing AI in retail

GPA's experience clearly shows the multiple benefits that AI for retail can generate when implemented strategically:

• Constant Product Availability: Customers find what they need at the exact moment, which increases satisfactionfaction and brand loyalty.
• Loss and waste reduction: Especially relevant in the sale of perishable products, AI-powered inventory management minimizes excess stock that ends up being discarded.
• Operational efficiency: By automating complex processes, companies reduce their reliance on manual estimates and free up staff time to focus on higher-value tasks.
• Increased profitability: By balancing inventories and reducing storage costs and losses, the company sustainably increases its profit margin.
• Sustainability: Reducing waste is not only positive in economic terms, but also in environmental terms, reinforcing the brand's corporate reputation and social commitment.
• Scalability: Once AI models are trained, they can be applied to thousands of products and stores without significantly increasing operating costs.

Taken together, these benefits demonstrate how artificial intelligence in retail generates positive impacts on both internal operations and the end-customer experience.

The importance of AI in the future of retail

Adopting AI in retail is no longer optional, but a strategic necessity for companies that want to stay competitive. Customer demand will remain dynamic, costs will continue to pressure operations, and the complexity of supply chains will continue to increase.

Given this scenario, AI solutions for retail are emerging as the key to building more agile, efficient, and profitable businesses. Cases like GPA's confirm that investment in these technologies produces concrete and sustainable returns over time.

Rootstack: A trusted partner in AI solutions for retail

While platforms like Vertex AI offer the technological engine, companies need a strategic partner who knows how to implement these tools and adapt them to the specifics of each business. That's where Rootstack comes in.

With extensive experience in the development and integration of digital solutions, Rootstack has supported companies across various sectors in adopting artificial intelligence applied to retail.

From AI sales forecasting to AI inventory management, our team helps retailers design and implement technological strategies that translate into real results: greater efficiency, less loss, and a superior customer experience.

With Rootstack as your trusted provider, your company can take the next step toward smarter, more sustainable, and more competitive management. Contact us!

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