Advanced Demand Forecasting
Understand demand drivers
Advanced Demand Forecasting enables organizations to understand:
- How incremental variances in a given individual factor impacts demand.
- How variances in one factor can impact another factor (e.g., the extent to which increasing sales staff numbers reduces customer wait times).
- Which factors may have different impacts in different geographies or markets.
Optimize business operations
The level of granularity offered by Advanced Demand Forecasting enables organizations to optimize their business practices, including supply chain and regional or in-store operations. By understanding demand drivers and how they affect different stores or sites around the country or world, organizations can fine-tune their supply chain to better support sites that see higher demand. Doing this helps drive sales by ensuring demand is met and reduced waste by avoiding overstocked facilities with lower demand.
It can also support more efficient in-store operations, such as focusing on specific activities shown to generate more sales or even the amount of staff required on the sales floor to achieve the optimal customer wait time. These changes maximize sales without overstaffing the store or spending resources on activities that aren’t adding value.
Improving this kind of efficiency allows organizations to intervene or modify business operations based on trends in demand factors, as well as identify over- or under-performing sites and the underlying reasons for the high/low performance. Changing business operations enables organizations to maximize the impact by focusing on the specific sites and factors that can drive the highest impact.
Strategize sales plans
Understanding how factors impact each other and drive demand also enables organizations to build sales strategies to maximize potential sales. Strategies include both annual plans based on common trends and historical data (including sales data and how variations in factors have impacted demand in the past) and near-term tuning using high confidence forecasts or predictions for the near future.
Weather forecasts and social media analyses, for example, work great for recognizing and acting on limited-time opportunities. As an example, weather data may indicate an upcoming weather storm. Advanced Demand Forecasting can identify this, measure the potential impact on the demand for umbrellas and raincoats, and forecast how it’ll impact average customer wait times. In this situation, an organization can check to see whether the extended customer wait time harms sales. From there, they can decide how to proceed, whether they choose to reduce staff and save costs or try to mitigate the negative impact wait times may have on demand. If the latter, Advanced Demand Forecasting enables the organization to fine-tune tactics to alleviate wait times, whether through
increased sales personnel, an in-store promotion, a combination of the two, or some other tactic altogether.
Organizations lack timely data to make optimization decisions when it matters. Advanced Demand Forecasting delivers a great deal more flexibility to adapt and strategize based on sudden or unexpected events. While rigid, traditional forecasting models make ad hoc adjustments based on significant events difficult.