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Introduction to Store Transfer

Nextail's Store Transfer module generates precise demand forecasts for every SKU in each store, focusing on maximizing sales by strategically analyzing millions of potential transfers.

Our demand-driven meritocratic approach attached to a global optimization model ensures to find the best balance of inventory between stores to maximize sales at full price, reduce overstock and improve overall efficiency.  

Our customers use inventory redistribution between stores for a variety of purposes. Below are the most common use cases.

The Store Transfer proposals will be primarily determined by the transfers that generate the highest Estimated Sales Increase (ESI). The ESI represents the potential sales growth achieved by reallocating all suggested units and complying with Visual rules. We will explore this concept in more detail as the course progresses.

How do we do this?

Store Transfer scenarios are the result of a two-step process:

  1. Demand Forecast:

We first estimate the number of units expected to sell for each SKU at each store over a specific time period. This provides the foundation for understanding potential sales opportunities.

  1. Optimization:

Next, we layer in various optimization factors to determine the ideal transfer strategy. This includes considering the current stock position of each size at origin and destination store, as well as various parameters such as the Efficiency Threshold or the Visual Rules.

The way this solution was defined was based on the following principles:

  • Demand driven: Our Machine Learning Model generates a demand forecast for each sku-store, each day. 
  • Global Optimization: The transfer scenario seeks for operational efficiency: maximize sales in the minimum number of trips possible. 
  • Meritocracy: The algorithm aims to concentrate the inventory on stores where each of those SKUs have the highest probability of selling.
  • Rich constraints set: Several types of constraints can be configured and considered by the transfer module (forbidden trips, product blocks, visual rules, etc.)
The result:

By combining Demand Forecast with Optimization, we pinpoint the optimal number of transfers to maximize sales, balance inventory, and adhere to business guidelines. This ensures efficient stock movement and minimizes both overstock and out-of-stock situations.