The Science Of IBM’s Holiday Retail Forecast—And Why Companies Count On It

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The science of IBM’s holiday retail forecast—and why companies count on it paid IBM

, and regional economic growth. But two factors set IBM’s forecasts apart: complex, proprietary AI algorithms that analyze the numbers, and highly detailed data from The Weather Company.

He has been running these numbers, and fine-tuning his model for years. But only recently has neural network technology grown sophisticated enough, Haydock said, that IBM can determine what he calls the “character” of a geographic locale, revealing its residents’ likely spending habits. Weather turns out to be the most important local variable in retail forecasting, surpassing broader economic data, Walsh said.

“There’s only one reason we check the weather,’’ Walsh said. “It’s because we’re planning our lives.”

 

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