Sales forecasts are critical to businesses of all sizes, enabling teams to project revenue, prioritize marketing, plan distribution, and scale inventory levels. To date, however, sales forecasts of new products have been shown to be highly inaccurate, due in large part to the lack of data about each new product and the subjective judgements required to compensate for this lack of data. The present study explores product sales forecasting performed by human groups and compares the accuracy of group forecasts generated by traditional polls to those made using Artificial Swarm Intelligence (ASI), a technique which has been shown to amplify the forecasting accuracy of groups in a wide range of fields. In collaboration with a major fashion retailer and a major fashion publisher, groups of fashion-conscious millennial women predicted the relative sales volumes of eight sweaters promoted during the 2018 holiday season, first by ranking each sweater’s sales in an online poll, and then using Swarm software to form an ASI system. The Swarm-based forecast was significantly more accurate than the poll. In fact, the top four sweaters ranked by swarm sold 23.7% more units, or $600,000 worth of sweaters during the target period, as compared to the top four sweaters as ranked by survey, (p = 0.0497), indicating that swarms of small consumer groups can be used to forecast sales with significantly higher accuracy than a traditional poll.
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ETL and ML Forecasting Modeling Process Automation System
Given the importance of online retailers in the market, forecasting sales has become one of the essential market strategic considerations. Modern Machine Learning tools help in forecasting sales for many online retailers. These models need refinement and automatization to increase efficiency and productivity. Suppose an automated function can be applied to capture historical data and execute forecasting models automatically; it will reduce the time and human resources for the company to manage the forecasting system. An automated data processing and forecasting model system offers the marketing department more flexible market sales forecasting. Proposed here is an automated weekly periodic sales forecasting system that integrates: the Extract-Transform-Load (ETL) data processing process and machine learning forecasting model and sends the outcomes as messages. For this study, the data is obtained for an online women's shoe retailer from three data sources (AWS Redshift, AWS S3, and Google Sheets). The system collects the sales data for 120 weeks, then passes it to an ETL process, and runs the machine learning forecasting model to forecast the sales of the retailer's products in the next week. The machine learning model is built using the random forest regressor. The top 25 products with the most popular forecasting results are selected and sent to the owner’s email for further market evaluation. The system is built as a Directed Acyclic Graph (DAG) using Python script on Apache Airflow. To facilitate the management of the system, the authors set up Apache Airflow in a Docker container. The whole process does not require human monitoring and management. If the project is executed on Airflow, it will notify the project owner to inspect the cause of any potential error.
more » « less- Award ID(s):
- 1832536
- NSF-PAR ID:
- 10487924
- Editor(s):
- Waldemar Karwowski
- Publisher / Repository:
- AHFE Open Access
- Date Published:
- Journal Name:
- Applied Human Factors and Ergonomics International
- ISSN:
- 2771-0718
- Subject(s) / Keyword(s):
- Extract-transform-load (ETL) process, Machine learning, Random forest regressor, Forecasting model, Online retailer, Apache Airflow, Docker, AWS
- Format(s):
- Medium: X
- Location:
- New York, USA
- Sponsoring Org:
- National Science Foundation
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- Free Publicly Accessible Full Text
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Accepted Manuscript1.0
- Conference Paper:
- https://doi.org/10.54941/ahfe1003775
