$90 Million Growth: How AI Transformed a Retailer’s Inventory in Just 12 Months

Imagine growing your profits by $90 M in just 12 months while reducing stockout rates by 77%. Does it seem impossible to you? It’s not, one retailer has already done it. This case study reveals how they upgraded their retail operations by adopting AI inventory management. Read on to discover how they transformed challenges into results with the help of advanced technology.

The Challenge: A Retailer In Crisis

ChemScene, a global retailer of biopharmaceutical products, experienced several inventory challenges, such as a lower inventory turnover ratio, a high stockout rate, a decline in customer retention due to stockouts, a stagnant repeat purchase rate, and significant inventory carrying costs. The increase in stockouts led to a decrease in customer satisfaction and repeat purchases. They identified their inventory issues in time and turned to smart inventory solutions involving AI to tackle them.

The Solution: What Led to a 20% Increase in Total Revenue?

How did ChemScene increase its total revenue by $90 million in 12 months? You might be wondering how AI helped increase their revenue by 20% by just upgrading inventory. The answer is AI-driven inventory management. While you depend on intuition or last year's numbers alone for managing inventory, ChemScene used AI to predict what to stock, how much stock is right, and when to replenish based on real sales data, market changes, seasonal shifts, and customer interests.

AI at Work in Stock

ChemScene implemented an inventory management model that uses AI to combine machine learning and traditional strategies to forecast demand and simplify replenishment choices.

The model structure included three main aspects: predicting demand, optimizing inventory, and making restocking decisions.

Inventory Forecasting

The demand forecasting model worked by identifying intricate patterns and seasonal trends using past sales data. They further enhanced forecast accuracy by considering other factors like promotional activities and competitor pricing.

Restocking Decision-making

The restocking decisions were guided by smart algorithms that analyze data to plan the best restocking schedules.

Inventory Optimization

AI optimized their inventory levels to ensure the products are always available while preventing overstocking.

The Results ChemScene Achieved

ChemScene achieved the following results after integrating AI into its traditional inventory management system:-

Increase in total revenue

From $450 million, ChemScene saw an increase of $90 million in total revenue within 12 months.

Higher operational profit

The operational profit increased by 31.3%, which is an indicator of the increase in operational efficiency after optimizing inventory with AI.

Increase in customer retention rate

The implementation of an AI-driven inventory management system had a positive impact on customer retention. The improved product availability and order fulfillment rates increased customer retention by 11%.

Improved inventory turnover ratio

The rise in the inventory turnover ratio from 4.2 to 5.8 indicates that the stock moves 38% faster after the adoption of AI.

Reduction in stockout rates

The accuracy in demand forecast led to a reduction in stockouts from 3.5% to 0.8%, which has also contributed to reduced lost sales and improved customer satisfaction.

Change in total revenue, operating profit, customer retention, inventory turnover ratio, and stockout rates after AI inventory management adoption.

Their Results Can be Yours Too

Most retailers avoid adopting AI in inventory due to a misconception that it requires a complete replacement of their existing system. However, the truth is that, with the right partner, you can uncover AI’s potential without disrupting your retail operations. At SayOne, we smoothly integrate AI into our clients’ existing systems, regardless of their business size, making inventory management smarter with demand forecasting, decision-making, and inventory optimization.

If you are looking for results like ChemScene’s, act now.

Don’t let cost or complexity concerns hold you back. Contact SayOne today for a free consultation and see how AI can boost your profits in as little as 12 months.