Forward-Looking Forecasting Cuts Costs, Optimizes Inventory

Q: What reasons led to the creation of Celes, and how does the company help retailers?

A: Celes is a software solution that helps retailers optimize their inventories to avoid both overstock and out-of-stock scenarios. An overstock situation ties up a company's working capital in inventory, essentially trapping cash in a warehouse. An out-of-stock situation results in lost sales and can cause retailers to lose customers who cannot find the products they are looking for. Our core function is to ensure retailers have the right products in the right place at the right time.

Q: How does Celes achieve this unified synchronization across a retailer's systems?

A: We have developed a comprehensive methodology and technology that connects with a retailer's existing systems, such as their Enterprise Resource Planning (ERP), point of sale (POS), or warehouse management system (WMS). We pull all the relevant data, process it, and generate a demand plan. This plan is then converted into precise purchase orders for suppliers and inventory transfers from distribution centers to individual stores. We cover all logistical models, including direct-to-store deliveries and cross-docking. To achieve this level of precision, we use a wide range of data, including historical information, promotional activity, and external variables like political events, protests, and even the weather. This allows us to accurately predict and explain the demand for each product at every sales location.

Q: How does Celes recover 90% of lost sales and free up 40% of working capital, and what makes your implementation so simple for retailers of all types?

A: Our success is rooted in forward-looking forecasting. Most retailers look at historical sales to predict future needs, which can be inaccurate. For example, if a store sold 15 units of an item last month, they might only order 15 units for the next month, even if the actual demand will be 30. This results in 15 units of lost sales. Celes's precise forecasting prevents this by using a variety of data to accurately predict future demand. We then convert these predictions into precise purchase orders and replenishment plans.

This process is more complex than it sounds, as we must account for various logistical restrictions, such as limited distribution center capacity, supplier lead times, and the need to maintain a minimum stock for shelf display. However, by taking all these variables into account, we can ensure our plans are both accurate and executable.

To make this simple for our clients, we have designed a fast implementation process that lasts between three and six months, compared to the 12 to 18 months it takes our competitors. As the software's developer, we handle the entire implementation ourselves, giving us full control over every line of code and ensuring a smooth process.

Q: Hard discounters have seen significant growth. What do they need to do to keep up with this demand and compete with larger retailers?

A: The hard discount model has taken over the grocery market in many developed countries. In Norway, for example, hard discounters account for 38% of the food market, while in Mexico, they represent only 3%. This shows the huge potential for growth in the Mexican market.

The main challenge in Latin America is that consumers are loyal to traditional brands. The hard discount model, which relies on a large portfolio of private-label products, works by breaking this brand loyalty. The private labels can be sold at much lower prices because they do not have marketing costs and are often high quality. In fact, many of these private-label products are made by the same large manufacturers as the name brands. As consumers become more comfortable with these private labels, hard discounters will continue to grow.

Q: What other technologies is Celes using to provide a better experience for its clients?

A: Celes is a data engineering, big data, and AI company. We have been using AI to turn data into concrete actions long before it became a popular topic with tools like ChatGPT. We now focus on making our platform even more user-friendly by creating a 100% chat-operable interface. For example, a client will be able to tell Celes, "Increase the Colgate order by 20%," and the system will execute it automatically. This will make our powerful tools even more accessible and efficient for our clients.

Q: What are Celes' priorities for the next 12 to 24 months?

A: We have three main priorities. The first is commercial consolidation. Our largest investor is FEMSA Ventures, so we made a big commitment to Mexico. We will focus on solidifying our position in the Mexican, Chilean, and Ecuadorian markets to make Latin America our stronghold. We want to be seen as the obvious, impossible-to-ignore choice for retailers in the region.

The second is providing exceptional service and implementation. We aim to maintain our reputation for fast and effective implementation, with a user-friendly interface that is easy to use. Our goal is to provide a user experience that is far superior to our competitors.

The third is to innovate our product offer. We constantly listen to our clients and adapt to their needs. Our willingness to adapt to the unique characteristics of the Latin American market is our biggest strength. For example, we developed a feature that allows a retailer to input their budget and have Celes optimize their purchases to maximize sales or profits. We also have a function that manages the sale of individual products from multi-packs, like breaking up a six-pack of beer, without messing up inventory data. These unique features, born from listening to our clients, are what make Celes the perfect solution for Latin American retailers.

Celes is a software platform that links and turns data into effective business strategies to increase sales with AI and interconnectivity.