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Interactive machine learning:
Sales forecasting and “What-if” simulations within retail
Johan Vallin - linkedin.com/in/johanvallin
Electrolux 100 years – Shape living for the better
Why is forecasting so important for a fast moving
consumer goods manufacturer?
Marketing
Sales impact from
marketing?
Many Millions in
spend
Sales 60 Million sold
products plus
spares and
accessories
12,4 Billion Eur (2018)
Manufacturing
what the
consumer just in
time
42 plants on all
continents
Challenges
• Complexity in the whole value chain
• Unanticipated volatility will result in waste
• Operations sensitive to Competitor activities.
Electrolux - Johan Vallin - https://www.linkedin.com/in/johanvallin/
Anticipate what to
keep in stock
400+ warehouses
and distribution
centres globally
Warehousing
Forecasting to shape sales promotion campaigns
BLACK FRIDAY Campaign
type?
How long?
When?
Price?
Historical Data Probabilistic
Forecast
Automated
Manual
Could we combine
data with intuition?
Data:
Intuitive:
Electrolux - Johan Vallin - https://www.linkedin.com/in/johanvallin/
3 components for successful solution - Data
Multiple Data Sources
Sell-Out
Price
Promotions
Phase in / out
Product
Ratings
Electrolux - Johan Vallin - https://www.linkedin.com/in/johanvallin/
3 components for successful solution – Models at Scale
Multiple Data Sources
Trusted Models
~1000 required
forecast models
Several hundred
promoted products
Multiple sales
channels
Trend Seasonality Promotions Predictors
Times X permutations
Electrolux - Johan Vallin - https://www.linkedin.com/in/johanvallin/
3 components for successful solution – Intuitive interaction
Multiple Data Sources
Trusted Models
Interaction & What-If
1000€1100€
ROI
Probability
Electrolux - Johan Vallin - https://www.linkedin.com/in/johanvallin/
CSE
Machine learning with Analyst-in-the-loop
Simulate
Model Training Service Simulation Service
Product Information Service
Active directory
Authentication
Model Runner Service
Prediction Service API Façade Service
Microservices
Price promotion officer
Developed with
kylg.org
Webapp
Electrolux - Johan Vallin - https://www.linkedin.com/in/johanvallin/
Electrolux - Johan Vallin -
https://www.linkedin.com/
in/johanvallin/
Updated probabilistic
sales volume forecast
Comparison
with baseline
model = trust
Setting price,
trends and
period à
retraining
Define campaign:
- product
- retailer
- channel
A more scientific
way to optimize
campaign sales!
Up to Trippled forecast accuracy for promotional sales!
Marketing
Sales impact from
marketing?
Many Millions in
spend
Sales 60 Million sold
products plus
spares and
accessories
12,4 Billion Eur (2018)
Manufacturing
what the
consumer just in
time
42 plants on all
continents
Anticipate what to
keep in stock
400+ warehouses
and distribution
centres globally
Warehousing
Accuracy error reduction
Electrolux - Johan Vallin - https://www.linkedin.com/in/johanvallin/
Data + Intuition:
Manual baseline method:
Forecasting 'What-if' Scenarios in Retail Using ML-Powered Interactive Tools

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Forecasting 'What-if' Scenarios in Retail Using ML-Powered Interactive Tools

  • 1. Interactive machine learning: Sales forecasting and “What-if” simulations within retail Johan Vallin - linkedin.com/in/johanvallin
  • 2. Electrolux 100 years – Shape living for the better
  • 3. Why is forecasting so important for a fast moving consumer goods manufacturer? Marketing Sales impact from marketing? Many Millions in spend Sales 60 Million sold products plus spares and accessories 12,4 Billion Eur (2018) Manufacturing what the consumer just in time 42 plants on all continents Challenges • Complexity in the whole value chain • Unanticipated volatility will result in waste • Operations sensitive to Competitor activities. Electrolux - Johan Vallin - https://www.linkedin.com/in/johanvallin/ Anticipate what to keep in stock 400+ warehouses and distribution centres globally Warehousing
  • 4. Forecasting to shape sales promotion campaigns BLACK FRIDAY Campaign type? How long? When? Price? Historical Data Probabilistic Forecast Automated Manual Could we combine data with intuition? Data: Intuitive: Electrolux - Johan Vallin - https://www.linkedin.com/in/johanvallin/
  • 5. 3 components for successful solution - Data Multiple Data Sources Sell-Out Price Promotions Phase in / out Product Ratings Electrolux - Johan Vallin - https://www.linkedin.com/in/johanvallin/
  • 6. 3 components for successful solution – Models at Scale Multiple Data Sources Trusted Models ~1000 required forecast models Several hundred promoted products Multiple sales channels Trend Seasonality Promotions Predictors Times X permutations Electrolux - Johan Vallin - https://www.linkedin.com/in/johanvallin/
  • 7. 3 components for successful solution – Intuitive interaction Multiple Data Sources Trusted Models Interaction & What-If 1000€1100€ ROI Probability Electrolux - Johan Vallin - https://www.linkedin.com/in/johanvallin/
  • 8. CSE Machine learning with Analyst-in-the-loop Simulate Model Training Service Simulation Service Product Information Service Active directory Authentication Model Runner Service Prediction Service API Façade Service Microservices Price promotion officer Developed with kylg.org Webapp Electrolux - Johan Vallin - https://www.linkedin.com/in/johanvallin/
  • 9. Electrolux - Johan Vallin - https://www.linkedin.com/ in/johanvallin/ Updated probabilistic sales volume forecast Comparison with baseline model = trust Setting price, trends and period à retraining Define campaign: - product - retailer - channel A more scientific way to optimize campaign sales!
  • 10. Up to Trippled forecast accuracy for promotional sales! Marketing Sales impact from marketing? Many Millions in spend Sales 60 Million sold products plus spares and accessories 12,4 Billion Eur (2018) Manufacturing what the consumer just in time 42 plants on all continents Anticipate what to keep in stock 400+ warehouses and distribution centres globally Warehousing Accuracy error reduction Electrolux - Johan Vallin - https://www.linkedin.com/in/johanvallin/ Data + Intuition: Manual baseline method: