Material Forecasting

H&M faced frequent overstocking and shortages due to volatile consumer demand. In 2018, the retailer established an AI department—now with over 270 specialists—to apply AI across operations, including forecasting material requirements more accurately.

According to McKinsey & Company, AI-driven supply chain forecasting reduces errors by 20% to 50%, boosts service levels by up to 65%, and improves inventory by 35%. These outcomes translate directly into cost savings and sustainability gains. PwC’s 2024 Voice of the Consumer Survey found that 80% of consumers globally are willing to pay more for sustainably sourced goods, creating incentives for advanced forecasting capabilities.