EXCLUSIVE: Academy Sports plans at item level with AI

Academy Sports + Outdoors is optimizing individual allocation and replenishment decisions with artificial intelligence.

In a technology deployment exclusively shared with Chain Store Age, Academy Sports sought to simplify what it had determined were overly complicated processes for forecasting, replenishment and allocation forecasting, which relied on human inputs, required constant refreshes and could not deliver quantifiable results.

To address this complexity, the retailer sought a new solution that could increase the agility and productivity of its inventory and fulfillment decisions and be integrated with existing solutions, such as base pricing and markdown applications from Revionics, an Aptos Company, without significant disruption to the business. 

In addition, Academy Sports wanted the ability to make smart allocation and replenishment decisions about every piece of inventory across every store and distribution center. However, Academy Sports has a complex assortment, selling disparate products including apparel, trampolines, bicycles, fishing lures and treadmills. 

These items have different considerations for inventory based on factors such as velocity, season, region, sizes and capacity constraints. With numerous SKUs and variables to take into account, Academy Sports decided to utilize AI for its ability to sort and analyze massive amounts of data. 

AI provides the answer

The retailer selected the Invent Analytics AI-based supply chain solution. Academy Sports can now make calculated, optimal decisions about every individual product at each store at any given time, which it could not accomplish with human planners.

Leveraging Invent Analytics technology, Academy Sports is achieving more profitable inventory levels and enables its business teams to adjust and change strategies based on AI-generated insights. 

Combining forecasting, replenishment, and allocation functions, the Invent Analytics solution helps Academy Sports synergize roles to focus on desired outputs, instead of simple function execution as it did previously. 

The major key performance indicators (KPIs) the retailer tracks are inventory sales margin and inventory turnover, not forecast accuracy. With Invent Analytics, Academy saw a major improvement in both metrics, plus an improvement in its percent on clearance events. 

In addition, Academy Sports saw improved in-stocks, while reducing unproductive inventory at distribution centers and overall inventory levels. The partnership also includes a truly cross-functional team of experts from both Invent Analytics and Academy Sports known as the “hub model.” 

Therefore, Academy Sports is now equipped with a single functional group working on the Invent Analytics platform that continually identifies new opportunities that could add value to the bottom line.

According to the retailer, the hub model has significantly improved inventory flow through its distribution centers to reduce lead times. In its traditional warehouse process, Academy would receive inventory and immediately put it away. 

Then, when a store would place an order, products would be manually picked, packed and shipped. But with factors like the time it takes to pick and pack a single item, as well as ongoing labor shortages, Academy Sports wanted to maximize distribution efficiency. 

“By leveraging the Invent Analytics platform, Academy now automatically determines where each piece of inventory should be allocated as it comes into the distribution center,” Tav Tepfer, chief revenue officer, Invent Analytics, said in a quote to Chain Store Age.  “Each item is then immediately packed and shipped without needing to be put away first.

Key results of Academy Sports leveraging Invent Analytics include: 

• Significant improvements for in-stock and lost sales. 
• Higher regular and promotional sales, higher margins, and lower aged inventory. 
• A gross profit contribution in ROI.
• Minimized inventory overhead and balanced weekly stock orders to the distribution centers.
• Reduced store backroom and store labor issues.

Latest developments

Recently, Academy Sports began working with its hub model to deploy Invent Analytics’ solution for replenishment ordering for some of its private labels and imports. For this inventory, Academy has to operate differently due to longer lead times. 

Now, Academy Sports is working to provide international vendors with contractual forecasts to help with planning decisions. Using Invent Analytics technology, Academy provides a monthly order forecast that allows its private label and import vendors to make adjustments to their production. As a result, Academy is able to have more just-in-time inventory, increasing profits significantly.

The retailer will also rely on AI-optimized planning functions to help support expansion efforts as it eyes opening 120 to 140 new stores by the end of 2027.

Academy Sports + Outdoors is a publicly traded company headquartered in Katy, Texas that operates 274 stores in 18 different states and relies on three distribution centers.