RETAIL, EASTER AND AI: WHAT HAPPENS?
Chocolate eggs, wine and lamb: booming sales but also waste, overstock and shelf holes. How can AI help avoid these issues?
The foodtech company Tuidi develops proprietary Artificial Intelligence solutions to anticipate consumer buying habits in large-scale retail, including during the fast-approaching Easter holidays. It offers practical suggestions to boost sales by factoring in both internal and external variables, such as weather forecasts, holidays, and competitor data.
Easter is usually seen as a "peak season" for certain holiday-related products, such as chocolate eggs, Easter cakes, wine, and lamb. Sales typically increase by an average of 25% during the Easter week compared to the previous month. But beware: it's not as simple as it may seem.
“As Easter automatically leading to a surge in sales for food products isn’t always accurate," explain Giulio Martinacci and Vincenzo Morelli, founders of Tuidi. "To confirm this, we conducted an analysis using our internal data.”
Founded in 2021, Tuidi developed Delphi, a software solution for managing retail outlets and distribution centers. The platform automates day-to-day operations through custom interfaces and provides accurate sales forecasts and stock planning. Delphi analyzes millions of data points, including both internal and external factors like weather forecasts, holidays, and competitor data, to generate predictive machine learning models that maximize a company's performance.
How Does It Work? Here are some examples of how these variables, when consistently and jointly analyzed, impact sales increases or decreases—even during the Easter holidays—helping companies effectively manage their inventory. The data and results we are about to present represent specific scenarios studied, but different situations could lead to varying outcomes, emphasizing the importance of tailoring predictive models to the unique characteristics of each retail location and operational context.
Promotions and Holidays: Red Wine, Meat, and Eggs
According to our analysis, looking at the period from the Monday to Sunday of Easter and considering various contexts, sales can fluctuate. For wine and meat, sales during Easter week increase by 25% and 16%, respectively, compared to non-holiday periods. But when these products are on promotion during Easter, sales skyrocket by around 390% and 270%. Promotions, it seems, are highly effective. Obvious, right? However, the opposite trend can be seen with another popular Easter product—chicken eggs.
“Our daily sales of eggs increase by about 30% during Easter week compared to non-Easter periods, but promotions are less effective at this time,” say Giulio and Vincenzo. "In fact, we found that when eggs are put on sale outside the Easter period, sales rise by 710%. But during Easter week, the increase is only 7%." This is a significant finding because it shows that promotions aren't always effective, and certainly not for every product.
A Wet Easter... and a Drop in Sales for Meat, Eggs, and Wine
What happens if, as often happens, Easter turns out to be rainy? How would it impact sales? "Based on our analysis, if it rains during Easter, meat and egg sales drop by 22%, and wine sales fall by 20%, compared to a dry Easter." This could be due to the inability to organize outdoor activities like barbecues or picnics. While the exact cause may not be as important, what matters is that weather conditions must be factored in well in advance.
Easter by the Sea: A Spike in Sales in Coastal Stores
With the arrival of spring and the urge to visit seaside towns, tourism in coastal areas increases significantly during Easter. “And what follows is an increase in sales and purchases at stores located by the sea. In fact, we found that during Easter week, sales are up 35% on average at stores near the coast, compared to those further inland.” Therefore, an important factor for food retailers is not just holidays, promotions, and weather, but also the geographical location of the sales. Nothing should be left to chance.
Competitors and Promotions: Easter Eggs
What happens to sales when two supermarkets with different brands are just a few steps apart during Easter? Our analysis shows that, during Easter, if one supermarket launches promotions on Easter eggs that are higher than those of its nearby competitor, the latter's sales can drop by up to 24%.
Cannibalization and Easter: Chocolate
It’s not just important to study competition, but also to monitor relationships between products. According to Delphi's data, Easter eggs significantly impact the sales of other types of chocolate. In fact, chocolate sales drop by 20% during Easter due to the rise of Easter egg sales.
This Easter case study shows how a variety of internal and external factors influence sales in different ways. "However," say the two founders, "avoidable mistakes often happen due to hasty decisions that overlook some of these variables, leading to suboptimal outcomes."
In the food supply chain, especially for medium-sized retail outlets, with tens of thousands of products, it's crucial to consider the complexity of the situation. You can't just apply static models based on historical sales data to predict future demand, because hundreds of factors can simultaneously and unpredictably affect sales every day. Therefore, a multidimensional approach is necessary—considering multiple variables, rather than relying on simple forecasts. This is where artificial intelligence comes in as a crucial ally.
Cross-checking stock levels and optimising inventory: Artificial intelligence against stock-outs, overstocking and waste
Understanding the impact of various variables on product sales is the first step toward improving store and warehouse management. AI plays a critical role in inventory optimization, helping prevent waste, reduce stockouts, and overall improve operational efficiency.
So how can retailers best approach Easter? Here are a few tips aimed at increasing customer satisfaction:
- Constantly monitor stock levels: Unforeseen problems such as theft, broken items or wrong deliveries can prevent customers from finding the Easter products they are looking for. Using proprietary algorithms, Delphi identifies these and other potential anomalies (such as stock reversals, slow-moving products or negative inventory) to keep inventory accurate.
- Manage assortments dynamically: Always displaying products with predetermined facings, without considering their sell-through rates, can lead to unsold items taking up valuable shelf space. Delphi helps identify underperforming products and adjust stock levels accordingly, ensuring the introduction of new, higher-margin items.
- Don’t rely on simple parameters: It’s wrong to assume that sales from previous periods (e.g., the past four weeks or last year) will continue in a linear pattern. As demonstrated, internal and external factors change constantly, affecting various products in unique ways. Pre-setting a “mark-up” for every situation is a mistake. Instead, adopting AI helps predict demand more accurately, analyzing millions of data points across thousands of products.
To navigate the ever-changing market, leveraging Artificial Intelligence is essential, and Delphi—our AI-powered platform—helps retailers address many of the challenges that have traditionally hindered efficiency.
“The goal is to have the right products at the right time,” explain the co-founders. "Our demand forecasting system makes this possible, unlocking new capabilities that were previously overlooked or unknown."
Thanks to Delphi and AI-driven demand forecasting, retailers have reduced product overstock by 24% and increased sales efficiency by 18% in their stores.
“The advantage lies in having the right products available exactly when customers need them,” they conclude. “This reduces stockouts, overstock, food waste, and saves time—so you can find the Easter egg you're looking for when you walk into the store!”