Alloy.ai is known as a company’s demand and inventory control tower, which arms users with daily SKU-store level insights so they can quickly sense problems, predict issues their competitors would not see coming, and respond in seconds instead of days – which is used by companies ranging from Fortune 500 to digital natives. To learn more about the company, Pulse 2.0 interviewed Alloy.ai co-founder and CEO Joel Beal.
Joel Beal’s Background
Beal envisioned an academic career originally, and pursued a PhD in economics at Stanford, but found it too theoretical. “During the Great Recession, my interest in applied economics and industrial organizations led me to a data science role at APT, working with large retailers and consumer packaged goods (CPGs) to evaluate initiatives’ impact,” said Beal. “I became deeply interested in retail and CPG because – through my experiences – I saw the challenges CPG firms faced in collaborating with retail partners. The problem came down to limited data access and standardization. And that was a problem I knew how to solve.”
Formation Of Alloy.ai
How did the idea for Alloy.ai come together? Beal was eager to start something and started exploring various ideas.
“I wanted to go into an area with a large total addressable market (TAM) that had not attracted much interest and was off the beaten path — not a problem that had 30 startups from Y Combinator already trying to solve it. And I also wanted something that aligned with my interests and skills in enterprise software,” Beal noted. “Supply chain was appealing since it met these criteria. At the time, few companies were entering the supply chain sector, and it lacked a robust tech ecosystem. Despite being a significant area of software spending, it wasn’t receiving much attention. I recognized that data was fundamentally the most challenging part of the supply chain — and it’s the main reason supply chain software isn’t better.”
Supply chains are actually known as one of the earliest applications of software and if you go back to the early days of computers, some of the earliest programs were focused on inventory management and supply chain.
“We met with numerous consumer goods companies to identify interesting problems and challenges in the sector. Then I had a chance conversation with my sister, who managed sales for a luxury shoe brand, and it led to a breakthrough. She mentioned her team’s weekly efforts to consolidate data from major retailers to analyze sales. This revelation, combined with the other discussions, highlighted just the extent to which data is underutilized — and that got Alloy.ai off the ground,” Beal added.
Favorite Memory Working At Alloy.ai
When has been one of Beal’s favorite memories working for Alloy.ai? “My favorite memory is the first enterprise customer we closed. We signed a large global consumer electronics brand. At that point, we had like $300,000 in annual revenue, and we signed about a $350,000 deal with them. It doubled our revenue overnight,” Beal reflected. “I remember there were like 12 of us at the time, and I remember being in the office and we couldn’t believe it. It kind of came out of the blue, and it was totally unexpected. We were literally jumping up and down, hugging each other. There was a feeling of: ‘Oh my gosh, we’re not gonna fail!’”
Challenges Faced Building The Company
What are some of the challenges Beal faced in building the company and has the current macroeconomic climate had any effect on the company? “It’s a mixed situation. A few years ago, we often encountered skepticism about the need for a solution like Alloy.ai, with people questioning the importance of visibility and understanding daily demand patterns instead of monthly trends. This concern has largely disappeared in recent years, and the value of our product is now well recognized,” Beal acknowledged. “Major cloud providers have all launched supply chain visibility products in the last six months, focusing on inventory visibility. This indicates that the issue is now a priority for many consumer brands. On the flip side, the current economic climate has led companies to scrutinize their budgets and ROI more closely, which is a challenge every vendor faces. However, we benefit from the tailwind of an increasingly relevant problem for our prospective customers.”
Core Products
What are Alloy.ai’s core products and features? “We describe ourselves as a demand and inventory control tower for consumer brands. Alloy.ai is built on a cloud data platform powered by over 850 pre-built connectors that integrate point-of-sale and inventory data with supply chain data, giving brands complete and instant visibility into demand and inventory across their network,” Beal replied. “Our customers are using this new visibility to sell more products, save time and solve complex supply chain challenges in seconds instead of days or weeks.”
Evolution Of Alloy.ai’s Technology
How has Alloy.ai’s technology evolved since launching? “Our product has evolved mostly as we initially anticipated. The primary goal was always to provide users with an unparalleled understanding of demand patterns for their products and use that information to improve their supply chain operations. Over the years, we started by focusing on retail product demand, and gradually, we integrated data on inventory, production, and supply chain information. This allowed us to offer a much broader picture for our clients,” Beal pointed out. “We’ve also deepened our capabilities, progressing along the analytics maturity curve from basic reporting to descriptive, predictive, and eventually prescriptive analytics. Looking back at our pitch deck from our seed round, our journey began with the demand side of the supply chain, and we aimed to work our way back. We’ve followed that path and developed into a very different product compared to five years ago.”
Significant Milestones
What have been some of Alloy.ai’s most significant milestones? Beal cited that the company’s most significant milestones to date have included:
– Getting the first customer data
– Landing the first paying customer
– Locking in the first enterprise customer
“The firsts are always exciting. These days we’re mostly focused on revenue milestones and improvements in our product’s predictive capabilities,” Beal affirmed.
Customer Success Stories
When I asked Beal about customer success stories, he highlighted the following:
– Valvoline reduced out-of-stocks by more than 35% by using data from Alloy.ai to build trust with retailers.
– Ferrero used Alloy.ai to spot spoils on the shelf at a problematic retailer and fix the problem. This resulted in a 5% bottom-line impact for the brand.
– Melissa & Doug used Alloy.ai to essentially A/B test a specific in-store promotion, resulting in $860K in saved marketing spend.
– A leading consumer electronics brand used the Alloy.ai platform to identify spiking demand and place single-store orders totaling $20 million in incremental revenue (tripling their sales goal for the quarter).
Total Addressable Market
What total addressable market (TAM) size is Alloy.ai pursuing? “We describe ourselves as a demand and inventory control tower for consumer brands, and if you look at the market for supply chain control towers they’re roughly a $5 billion industry today and growing. Estimates put it at a $26.3 billion industry by 2030,” Beal analyzed.
Differentiation From The Competition
What differentiates Alloy.ai from its competition? “Most analytics and control tower vendors build the technology and then it’s up to you to bring your own data. We turned that model upside down. We believe that the fundamental challenge consumer brands face is data integration, and without it you can’t solve or answer a lot of important questions. So Alloy.ai is unique in that we have really started with the core foundation of a data platform that not only can handle a lot of different supply chain data and make sense of it but actually goes and gets that data on your behalf,” Beal revealed. “As of today, Alloy.ai has built 850+ out-of-the-box connectors that automatically aggregate and harmonize data from retailers, third-party logistics (3PL) and distributors, e-commerce, and even a brand’s internal supply chain data from their enterprise resource planning (ERP) software. This way you’re always making business decisions based on the latest data, and every team across the business is aligned around a single source of truth.”
Future Company Goals
What are some of Alloy.ai’s future company goals? “We hope to bring in more and more information about what’s happening in the supply chain. The fundamental challenge we’re trying to solve is that supply chains have very siloed data and different types of data, and the more you’re able to bring it together, the more predictive you can be. You understand more of the levers that can move your business. And then this is where AI actually gets more interesting, because now you’re able to show your AI models a lot of different decision points and information and have it tell you the best solution for the problem at hand,” Beal concluded.
