How AI Assistants can help you understand your business and drastically accelerate Scenario Planning

What if you could forecast with confidence, anticipate market shifts, and make smarter decisions in a fraction of the time it currently takes? For CPG analysts and business managers dealing with unpredictable demand or a changing competitive landscape, this isn’t just a dream - its a reality powered by AI Assistants and our forecasting pipeline.

Imagine this: You’re preparing for a joint business planning session in two weeks. Sales in three key categories are fluctuating, but limited time and resources mean you can only analyze one. After days of effort and a data scientist’s input, you pinpoint some possible causes for the fluctuating sales but still can’t quantify their impact. For the remaining categories, you’re left guessing, using last year’s trend data with minor adjustments to forecast the coming year.

When your boss asks for the forecasts, you say “Here are the hopefuls…. I mean forecasts,” acknowledging what you both know: the forecasts are an optimistic guess based on intuition. You wonder out loud - isn’t there a better way to do this? Something that provides greater clarity, is informed by the data, and requires less manual effort?

Current methods for scenario planning are painstaking, require expertise, and deliver unsatisfactory results. Teasing out the real relationships between factors like a 5% price drop by a competitor or a 10% spike in a macroeconomic indicator can take weeks of effort. For a robust, data driven scenario planning exercise, you’ll also need to create various scenarios identifying how these influential factors may fluctuate during the forecasting period and then run these scenarios through your forecasting model and compare the results.

To summarize, a robust forecasting exercise involves the following:

1. Identifying and quantifying influential factors (this may take multiple days and requires a data scientist)
2. Creating various scenarios and specifically the forecasted values of the influential factors like competitor’s pricing and promotion as well as macroeconomic factors (requires multiple days)
3. Running these scenarios through a multivariate forecasting model and comparing the various outcomes (requires multiple days and a data scientist)

Given the time and expertise required, it is no wonder that most scenario planning is done in a spreadsheet and reduced to simply grabbing last years values and making minor changes based on intuition!

But there is a better way.

Our AI-powered solution transforms scenario planning from a daunting, weeks-long ordeal into a streamlined process completed in under an hour. And since we’ve automated the data science process, you won’t need to hire a data scientist to create and explain the analysis. Our system eliminates guesswork and is engineered to build your team’s understanding of the real underlying dynamics that are affecting your sales.

We use an automated scalable machine learning pipeline to analyze historical data and external variables like competitor pricing and macroeconomic trends. The system identifies patterns and quantifies their influence, providing a reliable foundation for scenario planning. We then leverage chatCPG’s “team of agents” (our proprietary generative AI assistants*) to explore various scenarios and explain the outputs - providing plain language explanations of the insights and patterns identified by the machine learning models.

ChatCPG’s team of agents create and refine scenarios (including populating the forecasted future values of the influential factors) then review and compare the various scenarios, providing a top level summary full of relevant talking points that will increase your understanding of your business and enable you to engage your partners with robust, data informed recommendations.

Let’s look at an example (based on a synthesized data set) forecasting the dollar sales of Cinnamon Toast Crunch at Kroger. The forecasting pipeline identified the prices of Cheerios and Lucky Charms as the most influential factors. ChatCPG summarizes:

Predicted sales for the upcoming period are 2.8% higher than last year’s values indicating consistent consumer demand with some positive growth. The most influential factors on $ sales are the price of Cheerios and Lucky Charms, with a 3.4% price drop of either competitor affecting sales by up to 2% over a 3 week period following the price drop.

ChatCPG’s team of agents then create the following 3 scenarios:

1. Increased Competitive Pricing Pressure: In this scenario, competitive pressures lead to a decrease in the prices of Cinnamon Toast Crunch at Kroger and Walmart, possibly due to the highly competitive nature of the cereal category. Albertsons drops the price of Cheerios and Lucky Charms in response, aiming to retain market share. Expect a 10-15% decrease across all product prices from their historical averages. This scenario is critical as the data shows significant variability in sales and pricing, indicating high sensitivity to price changes. Competitive pricing can lead to fluctuations in sales volumes, making it a vital scenario to explore for understanding potential market dynamics.

2. Health Trend Impact: A surge in consumer demand for healthier breakfast options leads to increased prices for Cheerios, known for its healthier profile. This causes a ripple effect, slightly increasing the price of Lucky Charms as Kroger capitalizes on the trend. Prices for Cinnamon Toast Crunch remain stable, with minor fluctuations around the median historical price. With changing consumer preferences and increasing awareness about health, this scenario can significantly alter the sales landscape for cereal products like Cinnamon Toast Crunch.

3. Economic Downturn Response: An economic downturn causes a decrease in consumer spending power, leading to a strategic decrease in cereal prices at Kroger. Prices of Cinnamon Toast Crunch, Cheerios, and Lucky Charms drop to the lower quartile of historical prices to maintain consumer loyalty and volume. The economic context can greatly influence consumer spending power and preferences, impacting sales figures. This scenario will help forecast how Cinnamon Toast Crunch might perform under different economic conditions, which is crucial for strategic planning and risk management.

Note that ChatCPG’s team of agents correctly identifies Cheerios as having a healthier profile and realistically describes how this might play into a scenario where consumers are leaning toward more health conscious cereal.

For each scenario the team of agents creates associated future values, then runs them through the forecasting pipeline to view the effect on total dollar sales.

ChatCPG’s team of agents then summarize the outputs of the different scenarios as follows:

Scenario 1, driven by increased competitive pricing pressure, projects the highest total sales at $3.25M, indicating that lower prices might attract higher volumes despite heightened competition. Scenario 2, influenced by health trend impacts, predicts moderate total sales of $3.05M, reflecting steady performance as Cinnamon Toast Crunch prices remain stable while competitors adjust to rising demand for healthier options. Scenario 3, which accounts for an economic downturn response, forecasts the lowest total sales at $2.75M, suggesting that decreased consumer spending power and lower price points across products may reduce overall revenue. These scenarios underscore the importance of strategic pricing and market positioning in the current landscape.

AI-powered scenario planning represents a significant leap forward in forecasting capabilities. By combining machine learning with intelligent AI agents, businesses can now generate data-driven scenarios and insights in hours instead of weeks. This transformation not only saves valuable time and resources but also enables more confident, strategic decision-making based on robust analysis rather than intuition.

For more information on how Tickr AI can improve your team’s insights into what is driving your sales results and improve your positioning, contact us at info@tickr.com.

* A multi-agent framework is used in scenario planning because of the complexity of the task and the variety of required skills (data analyst, business strategist, pricing analyst, etc)