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We’ve already discussed why predictive analytics works so well in the retail industry. In order to illustrate a more pragmatic example of the kind of complex challenges predictive analytics technology helps retailer solve, we look at the retail allocation process. Inventory allocation is a critical and complicated retail process for several reasons. Here are some major ones that many retailers experience: New Products: The problem with new products is that there is no past performance history of these products in any of the stores; therefore it’s very difficult to make projections about product performance without some simply doing some guesswork.