Customer forecasting powers Dollar General’s expansion – News

Dollar General Corp. plans to open 725 new stores this year, or nearly two per day. With that kind of growth, the $40 billion retail giant will continue to rely on a sophisticated model for customer forecasting that it has developed and fine-tuned with its partner, Deloitte Consulting LLP.

The key is to develop the right processes and systems to ensure that the complex coordination required to properly manage sales at over 20,000 retail locations delivers a positive result for each customer, according to Suman Pattnaik (pictured, right), vice president of technology, merchandising and supply chain solutions at Dollar General.

“The challenge is how do we bring the right item at the right price to the customer at the right place?” he said. “That process is actually simplified with an array of processes and systems that work together in tandem to make it all happen. Talk about replenishment, talk about forecasting, talk about inventory, talk about transportation, warehouse management — everything has to work in a very simulated manner to make sure we get the right items in place for the customers.”

Pattnaik spoke with theCUBE’s Dave Vellante and Savannah Peterson at Google Cloud Next, during an exclusive broadcast on theCUBE, News Media’s livestreaming studio. He was joined by Sankar Selvaraj (left), management consulting for AI and data engineering enablement at Deloitte, and they discussed how the two firms have jointly worked to build forecasting systems for future growth. (* Disclosure below.)

First-party data fuels customer forecasting

To develop its sophisticated forecasting system, Dollar General worked with Deloitte to prioritize first-party data and offer tailored, personalized customer experiences. This resulted in a process chain that allowed the retailer to anticipate demand and shape its future offerings across locations.

“We specialize in helping our customers in terms of bringing the forecasting capabilities, any of the supply chain capabilities to be able to drive that vision,” Selvaraj explained. “When this engagement started, we all sat across the table to understand what the client vision was that they wanted to achieve.”

That vision was focused on the need for a system that could provide the necessary business insights into specific customer preferences. The system Deloitte developed with Dollar General can forecast customer level sales with 85% accuracy, according to Pattnaik.

“Even a small child who goes into a store, he’s very particular about what color of the candy he or she needs,” he said. “We decided to work with Deloitte to ensure we have a system which is something that we breathe, we do it based on customer demand … and I would call it a reflection of our business. It’s a glass box; it’s not a black box.”

The glass box also meant flexibility as business needs must be adjusted or changed based on customer demand. As key tools such as generative AI become more widely adopted, business consultants such as Deloitte recognize that clients are primarily interested in ensuring that customers come along for the ride.

“Change management is very, very important in serving customers like Dollar General,” Selvaraj said. “They look for margin, and more importantly serving the customer. We can build gen AI, any kind of top-notch solutions on the cloud, on-prem, but a very important thing is to bring along your customers together. That was a great success for us at both Deloitte and Dollar General.”

Here’s the complete video interview, part of News’s and theCUBE’s coverage of Google Cloud Next:

(* Disclosure: Deloitte Consulting LLP sponsored this segment of theCUBE. Neither Deloitte nor other sponsors have editorial control over content on theCUBE or News.)

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