Consumer buying behaviour is continuously evolving and your forecasting should be too. Using state-of-the-art AI and real-time demand sensing, QU brings more accuracy to your new product introduction and predicts Demand Drivers™ ahead of time.
Sales and Operations Planning is the central point of most enterprise decisions as big bets are placed on anticipated demand which result in portfolio planning and procurement outcomes. This age-old process is critical to unlocking spend for product and services but sadly is somewhat of a dying art as enterprises' commitment to it wanes in favour of individuals’ intuition, compounded by consumer and economic uncertainty. Now, as so many companies must cut costs in response to long-term structural changes in demand, there has never been a more important time to stay disciplined and enhance planning through recent innovations in real-time data and the resulting insights.
Our demand planning solution QU has been in-market for 12 months, helping planners and marketers understand changes in future buying behaviour, rather than rely on historical data. What’s exciting is seeing the early results. QU is improving the Weighted Absolute Forecast Accuracy by more than the industry benchmarks of 50-60%, (and even closer to 80% for a client in South East Asia).
QU is bringing the analysis of real time demand from over 300M consumer signals to our clients’ desktop. Planners arrive at work to be greeted by the future behaviours which are material to demand, meaning decisions on marketing, sourcing or procurement can be made outside of lead time windows, thereby optimising cost-to-serve.
There are infinite potential ‘demand drivers’ for every product (SKU) - far too many for any planner to effectively consider in a forecast. This is where QU’s artificial intelligence plays its part to identify and illustrate the drivers of demand important for each SKU, and alert you to any significant change. Demand drivers can include anything from specifications of a product or service, to the sentiment expressed on social media. Demand drivers are dynamic, and their influence shifts over the course of a product’s life cycle. For example, the further out the forecast horizon, the less important historical sales data becomes and the more important it is to understand the human behaviour associated with the demand.
By deploying QU, clients can understand the unexpected changes in consumer behaviour that could throw plans off course and remediate them before they cause inventory issues. QU is especially valuable as demand volatility increases, because consumers spend more time creating data through their research. This in turn produces additional (aggregated) data points about future intentions. Combine this with advances in data science, and we are now able to see the impact of drivers on future buying decisions quickly enough to mitigate inventory issues or drive acquisition.
Those of us in planning, operations and marketing should use data - not intuition - to bring the voice of the customer into an integrated planning process. In a downturn, brands look to sales to make their numbers but optimising supply chain and demand planning offers significant leverage too, especially on key metrics like working capital and cost-to-service.
Interested in using AI to optimise your supply chain planning? Contact us for a demo.
Throughout COVID-19 we have been looking at how the immediate impact of physical distancing and other restrictions translates into longer term, structural change in consumer buying behaviour.
For example it seems likely that time spent online gaming increased in line with enforced time at home for consumers during various stages of COVID-19, but what are the longer term implications for gaming content and devices?
We asked Jason Spiller, a former client and now Creative Director at Asia Pacific gaming consultancy Arcanist. Jason says that as pre-COVID-19 growth in gaming was driven by the demographic growing up natively with online content, it’s more likely that existing gamers simply played more. Non-gamers still have to adjust to new methods of content consumption, especially streaming, regardless of having more time on their hands.
However it’s once restrictions end that resulting structural changes in entertainment, hospitality and sports industries may boost gaming audiences. Early Quantiful tracking identified for clients like HP Omen how rapidly esports was gaining ground. This trend has only accelerated since COVID-19 with traditional teams and codes discovering the reach and impact among existing and new fans of this spectator format.
Furthermore with traditional sporting codes taking time to return to normal operations, due to restrictions on crowd sizes and travel, forward-looking Stadium executives are re-inventing their business models to capitalise on these trends. One phenomena is upgrading facilities to esports hubs and High Performance Centres, welcoming into stadia a whole new generation of sports athletes and teams with huge followings. No physical attendance needed - just log in!
We think that electronics retailers may see a positive knock on effect as active gamers, relying even more on their device for gaming and entertainment as well as work, ‘pull forward’ demand for the new models by several months.
The COVID-19 experience is outside any normal annual buying cycle, so our advice to retailers is to look afresh at new, emerging demand drivers in electronics particularly those facilitating multi-mode use or so called hybrid devices. To this end, the new generations of dual screen devices arriving over the next two months will be of real interest. Retailers who can spot quickly which brands are dominating the conversations within specific demographics can pivot their own digital marketing to support the in-demand devices and brands.
It may not be just gamers either. Parents of school age kids may re-prioritise the importance of tablets and other connected devices when considering the possibility of future periods of extended home-learning and budget to upgrade sooner than expected.
Quantiful’s interest in mobile gaming trends extends to South East Asia, where we are helping a telco forecast demand for games in order to focus their development and shorten the time to market. More about that project soon.
In 2019 African swine flu devastated China’s pork production and it turned to South America and the USA, once tariff wars settled down, for pork and beef to avoid shortages. Now, supply chains in these countries are again in trouble due to COVID-19 shutting down or severely restricting production capacity, putting at risk supply to their domestic markets.
So how have consumers responded to these unprecedented disruptions to supply chains, and what does the future look like for New Zealand exporters of premium food?
Quantiful, whose Saas platform QU uses real time consumer data to track changes in buying behaviour, has been continuously monitoring Chinese and Western markets over the last year for Beef and Lamb NZ and Silver Fern Farms.
Demand for Kiwi protein surged throughout 2019 as Chinese consumers turned to premium products known for their “purity” and freshness, attributes influenced by perceptions of New Zealand as much as personal experience with the product itself.
COVID-19 hit in January and purchase drivers among consumers shifted again. Traditional Chinese medicine prescribes consumption of fresh, lean meat to bolster immunity, something reinforced by Government messaging. As Chinese families were forced to cook at home more often, convenience features of both individual cuts and packaging leapt in importance, especially for products purchased online.
COVID-19’s impact in North and South America has also been a major talking point on-line in China, trust in the quality of protein from these markets and beliefs about reliability of supply is changing weekly.
China is now re-opening for business and our tracking indicates a surprisingly rapid return to normal, though high-end restaurants are slower to recover and it’s likely that online will permanently secure a much higher share of retail sales. Against this backdrop, the leading purchase drivers and perceptions are forecast to continue in New Zealand's favour, particularly if this country stays on top of COVID-19.
Armed with this intelligence our clients are quickly adjusting their product and communication strategies to capitalise on emerging opportunities. In particular, brands are upweighting their New Zealand credentials in online messaging and highlighting features which now really resonate, like grass fed. As consumer packaging preferences shift to smaller cuts and multiple serve packs, vacuum packed products in freezer-friendly storage bags are preferred and New Zealand suppliers are looking to upweight supply of these formats. These are perceived to be more hygienic, easy to store and confer a high degree of freshness even when frozen .
A great example of this is at Beef + Lamb New Zealand which uses Quantiful’s insights to keep meat processors abreast of the latest developments around COVID-19 and support their decision making in-market. Hugh Good, Global Market Intelligence and Research Manager, says “this data is as close to real time as we can get and it offers quant level understanding of the magnitude of an issue, with qualitative level nuance and detail.”
Sales, marketing and distribution strategies are adjusting for the new normal, but to meet demand, real time data on changes in consumer buying behaviour must be incorporated into supply chain and operational planning. Only then can premium New Zealand food exporters be confident they are well positioned to take advantage of the rapidly unfolding trends in consumer buying behaviour.
An old adage in business is that the closer you get to your customer, the better you will understand what they really want – but what happens if those customers are constantly changing their position?
In this new world of Covid19, the ‘new normal’ is characterised by a high level of uncertainty and volatility in consumer consideration, intent and buying behaviour, factors which will place a premium on demand planners. Take telco for example. As air freight becomes fraught with difficulty and order lead times for new devices lengthen, more accurate demand forecasting for every SKU will be vital to protect working capital.
What are the implications for mobile operators when planners can no longer rely on a historical view of the world to predict future sales?
We looked at consumer conversations online about mobile, across both New Zealand and Australia, during February and March using QU, our consumer behaviour planning tool.
As economic storm clouds gather, consumers are understandably less confident about buying high-end electronics, yet the shift in sentiment is dramatic. Within a few weeks, negative sentiment (red) about the price of mobile devices increased from 24% of conversations in February to 33% in March, while positive (green) remained stable.
At the same time, interest increased in features and accessories that enable people to comfortably work from home while surrounded by family or flatmates, like noise cancelling headphones. For planners this means re-evaluating the premium-priced devices to be ranged, while ensuring sufficient in demand accessories are stocked.
Conversations about contactless payment options also increased during this period as consumers avoided touching surfaces in-store. This has flowed through to pressure on banks to lower fees, or at least allow higher limits, for contactless credit cards and likewise will be reflected in greater demand for devices and watches with the in-built NFC technology enabling contactless payment via Apple Pay and similar.
Consumers are increasingly anxious about where to repair a broken device if stores are closed or difficult to visit, suggesting more opportunities to promote better contactless repair and replacement service options, insurance or even leasing plans that include a full replacement option.
Today you can get closer to your customer than ever before by measuring the behaviours which lead to sales transactions, but you need those insights quickly because traditional planning techniques are just too slow to catch consumers on the move. The good news is that QU is ideally positioned to help demand planners with real-time analytics and robust insights to better inform their decision making.
This week we bid farewell to our wonderful team of interns who have been with us for the last few months. Before they leave, we asked them a bit about their time here, what they learnt and their best memories. We will miss you team, good luck for the future!
Health, animal welfare, the environment - no matter the reason, the plant based trend is here to stay. You may have noticed plant based eateries popping up left, right and centre as more restaurants and retail outlets adapt their menus and shelves to cater for their vegan or plant based clientele. Environmental concerns, animal welfare concerns and health concerns are more prevalent than ever and as a result, many people are turning to a plant based diet.
Medical journal, The Lancet states that for environmental and food security reasons a global reduction in meat consumption will be necessary by 2050 and just last month the new Canada Food Guide was released, urging Canadians to adopt more plant based sources of protein.
Quantiful found that in New Zealand, during the period November 2015 to November 2018, among all diet conversations, Veganism was the topic with the largest conversation volume across all social platforms with a share of voice (SOV) of 43%. On one of the major platforms, Twitter, after re-adjusting the SOVs to balance louder voices, vegan mentions still captured almost half of Twitter conversation (46% SOV) during this period.
Despite “plant-based” being the new kid on the block compared to more mature appellations such as Veganism and vegetarianism, in Q4 of 2017 plant-based overcame most dietary movements in scope (including diets that are agnostic to the use of animal products like Keto). In addition, the positive social sentiment surrounding the terminology ‘plant-based’ has increased by more than 100% since December 2015.
Between 2016 and 2019, plant based diets led the growth in diet conversions with a compound annual growth rate (CAGR) of 85% with Keto and Veganism having CAGRs of 42% and 34% respectively.
Reasons for the plant-based movement stem from 3 main categories - environmental, health and concern about animal welfare. Quantiful found that when discussing plant based diets, consumers showed the strongest emphasis on environmental reasons however when analysing the overall social sentiment surrounding the 3 categories (between November 2015 and November 2018), environmental held the strongest negative sentiment. This is due to these conversations often being centred around the negative impacts that the dairy industry has on water pollution, land use and climate change.
Conversations around animal welfare and health on the other hand, skewed more positively as discussions were more likely to be centred around the plant-based products themselves and the positive impact they have on animal welfare and health.
A recent Forbes article highlights that globally, meat substitute sales between 2012 and 2017 rose on average 9.3% which is more than three times the average rate of processed meats. As well as noting that Euromonitor listed “conscious consumer” as one of 2019’s top ten global consumer trends.
Beef and farming industry groups in America are fighting to ban the use of the word ‘meat’ describing plant-based and lab grown meat alternatives. A New York Times article, published on Saturday, says that legislators in more than a dozen states have already been persuaded to make illegal the use of the word meat being used in relation to burgers and sausages. According to market research firm, Euromonitor International, sales of plant based meat substitutes increased 22 percent, to $1.5 billion last year.
There are many start-up companies getting close to being able to produce lab grown meat using actual meat cells grown in the lab. Although not yet commercially viable, farmers are getting increasingly concerned that this could be become a low cost alternative to which consumers will turn. The New York Times article quotes Mr Dinkage, a Nebraska rancher saying “Just think what it actually costs eventually in a lab as compared to running a ranching operation,” he said. “It would be a lot cheaper and that puts me out of business.”
Most of America’s large meat companies are staying out of the debates surrounding the usage of the term ‘meat’. Some of them, including the likes of Tyson and Cargill, have acknowledged this as an opportunity and have already made investments in lab-grown meat start-ups.
The food industry is undoubtedly experiencing disruptive pressures in favour of ingredients of plant based origin. So what does this mean for your business? This growing movement toward plant-based diets is obviously rich in opportunities for businesses which can cater to consumers with these preferences but perhaps not so obviously also to organisations who have existing animal and animal derived brands and products. The old adage that for every action there is often and equal and opposite reaction was never more true here.
What is most important is, of course, to thoroughly understand your consumer, what they want, why they want it and then to adapt your business plan to satisfy your customers changing behaviours. In fact, changing consumer behaviours can be an exciting opportunity for growth and a key opportunity to stay ahead of your competition.
Quantiful are already helping many companies in the meat, dairy and retail sectors to understand their consumers' changing behaviours and to accurately plan, strategise and forecast their future in order to ensure it remains successful and lucrative.
For more information about how Quantiful can help your business stay ahead of changing consumer demand, email hello@quantiful.ai
Last week I was lucky enough for Quantiful to send me to attend the 2018 Apache Spark AI Summit in San Francisco. Apache Spark is an open-source large scale computing framework. Essentially, it provides an easy way for data scientists to crunch and process large amounts of data. Apache Spark allows programmers to scale the processing of big data as well as perform machine learning at scale.
The summit was an extravagant affair hosted in the heart of the technology capital of the world, Silicon Valley. The speakers included big players in the analytics industry such as Andrej Karpathy (director of AI at Tesla), Chief Data Scientist of AllianceBernstein and the creators of Apache Spark from Berkley among others. The talks ranged from "Forecasting Bitcoin prices" to NASA’s "Using Deep Learning to find water on the moon".
Attending the summit was an enjoyable experience where I had the opportunity to learn about the latest technologies and developments in big data and AI. In particular, there are a few developments which I am excited to implement back home. The one I am most excited about is "mlflow".
mlflow is an API designed to help data scientists build, test and productionise machine learning models in a reproducible, managed workflow. This will allow Quantiful to quickly release improvements to our own Machine Learning API and ensure our clients get the best solution delivered in the fastest way.
Overall the Spark AI summit reassured me that even though we are a small-start up based in NZ our technical sophistication and thinking ranks well enough to impress some of the best minds in the industry. I am excited to bring my learnings home and extend our products sophistication in order to deliver the best results for our clients.
Our co-founder, Jamie Cormack, presented Quantiful at the Icehouse Flux Demo Day in front of over 250 investors. Watch his video below!
