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How Do NIKE Use Demand Forecasting in Their Process Design

Nike uses demand forecasting in its process design by collecting consumer data from various sources to accurately predict preferences, purchasing patterns, and local demand trends. Nike shifts to a direct-to-customer strategy to gain greater control over customer data, invests in data analytics and AI startups to process vast amounts of data, and uses this information to manage hyper-local inventory levels and provide personalized experiences.

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2K views2 pages

How Do NIKE Use Demand Forecasting in Their Process Design

Nike uses demand forecasting in its process design by collecting consumer data from various sources to accurately predict preferences, purchasing patterns, and local demand trends. Nike shifts to a direct-to-customer strategy to gain greater control over customer data, invests in data analytics and AI startups to process vast amounts of data, and uses this information to manage hyper-local inventory levels and provide personalized experiences.

Uploaded by

shiraj nilam
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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how do NIKE use demand forecasting in their process design?

Based on the information presented in the search result summary, Nike utilizes demand forecasting as
an integral part of its process design by leveraging consumer data collected from various sources to
make accurate predictions regarding consumer preferences, purchasing patterns, and local demand
trends. Here's a breakdown of how Nike incorporates demand forecasting into its process design:

1. Direct-to-Customer Strategy: Nike has shifted its focus towards a direct-to-customer (DTC)
strategy, canceling contracts with third-party retailers like Amazon to gain greater control over
customer data. This enables the collection of high-quality and relevant data necessary for
accurate demand forecasting.

2. Data Collection & Analytics: Nike has invested in data analytics and AI-based startups to bolster
its capacity for processing vast amounts of data. They analyze customer journeys, track social
media behavior, and monitor purchase patterns to inform decision-making and improve demand
forecasting accuracy.

3. Hyper-Local Inventory Management: Using advanced data analytics, Nike makes hyper-localized
demand predictions, ensuring optimal inventory levels across all channels. This tailored
approach allows consumers to easily locate and purchase desired products, enhancing overall
customer satisfaction.

4. Personalization & Customer Experience: With the help of AI algorithms and machine learning
techniques, Nike provides customized offerings based on individual customer preferences and
behaviors. By offering personalized workout routines and expert advice via the NikePlus rewards
program, they foster brand loyalty and deepen engagement with their audience.

5. Acquisition of Adjacent Businesses: Aside from investing in tech startups specializing in data
analytics, Nike considers acquiring or partnering with firms in adjacent industries such as fitness
apps and travel planning platforms. This would enable Nike to gather additional contextual
insights about their customers, further refining demand forecasting capabilities and expanding
market opportunities.

Adidas

Based on the search results provided, Adidas uses demand forecasting in their process design primarily
to improve customer satisfaction and optimize sales through effective supply chain management. They
are currently developing a forecasting engine that utilizes machine learning techniques to generate
accurate, article-level forecasts for their entire product base. This enables them to better predict
customer demand, maintain appropriate stock levels, and minimize issues such as excess inventory or
stockouts.
Adidas employs various demand forecasting methods, including the integration of Google search data
and macro-economic indicators to enhance forecast accuracy. Their focus is on "in-season" forecasting,
where they update forecasts weekly to reflect current trends and real-time data on customer demand
and stock availability.

Additionally, Adidas addresses the challenge of the 'cold start' problem – when dealing with newly
introduced articles with limited historical sales data – by utilizing neural network-based algorithms
capable of identifying patterns in sales behavior for these items.

By implementing advanced analytics and AI technologies in their demand forecasting process, Adidas
aims to offer personalized experiences through product customization and provide high-quality
merchandise while minimizing waste and ensuring the right product mix for their diverse customer base.

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