Exploring the use of deep neural networks for sales forecasting in fashion retail

• Published in: Decision Support Systems 2018-10, Vol.114, p.81-93
• Main Authors: Loureiro, A.L.D., Miguéis, V.L., da Silva, Lucas F.M.
• Format: Article
• Language: English
• Subjects: Artificial neural networks; Business competition; Consignment buying; Customer satisfaction; Datasets; Decision trees; Deep learning; Deep neural networks; Fashion; Fashion retail; Machine learning; Neural networks; Physical properties; Predictions; Regression analysis; Regression models; Retailing industry; Sales; Sales forecasting; Studies; Support vector machines; Support vector regression
• ISSN: 0167-9236; 1873-5797
• DOI: 10.1016/j.dss.2018.08.010

In the increasingly competitive fashion retail industry, companies are constantly adopting strategies focused on adjusting the products characteristics to closely satisfy customers' requirements and preferences. Although the lifecycles of fashion products are very short, the definition of inventory and purchasing strategies can be supported by the large amounts of historical data which are collected and stored in companies' databases. This study explores the use of a deep learning approach to forecast sales in fashion industry, predicting the sales of new individual products in future seasons. This study aims to support a fashion retail company in its purchasing operations and consequently the dataset under analysis is a real dataset provided by this company. The models were developed considering a wide and diverse set of variables, namely products' physical characteristics and the opinion of domain experts. Furthermore, this study compares the sales predictions obtained with the deep learning approach with those obtained with a set of shallow techniques, i.e. Decision Trees, Random Forest, Support Vector Regression, Artificial Neural Networks and Linear Regression. The model employing deep learning was found to have good performance to predict sales in fashion retail market, however for part of the evaluation metrics considered, it does not perform significantly better than some of the shallow techniques, namely Random Forest. •New fashion products' sales are predicted using data mining regression techniques.•The performance of both deep neural networks and shallow methods is explored.•Expert knowledge is part of the predictive variables of the developed models.•Variables describing physical and distribution characteristics are considered.