Promotion Management: How To Mitigate Demand And Inventory Challenges

Retailers across sectors face ever-increasing challenges in their demand planning and inventory management. A mismatch in planning and actual demand typically leads to high inventory levels and aging stock that require additional effort for sell-out campaigns and write-downs, ultimately deteriorating profits.

Current demand prediction difficulties have the following root causes:

1. Promotional chaos:
   The retail industry is under immense promotional pressure, with a noticeable increase in the frequency and aggressiveness of discounts. Many retailers increase promotion activities that trigger one-time peak demand and supply, making it more difficult to predict future demand, and which accustom consumers to wait for future price discounts and promotions.