![]() Research what your customers want and need.Remember: you need to balance quantitative data with qualitative research! To perfect your inventory forecasting during unpredictable times, keep these practices in mind: ![]() How to perfect your inventory forecastingįorecasting inventory doesn’t just mean looking at sales data and calling it a day. Want to learn about other ways to forecast inventory demand? Jake Rheude from Red Stag Fulfillment wrote a demand forecasting guide that outlines the different types and ways of forecasting future inventory demand. For example, using quantitative information to re-order stock that’s a surefire best-seller and using qualitative information to buy lower volumes of inventory you’ve never carried before. Ultimately, though, merchants should use a balanced mix of quantitative and qualitative information in their decision-making. It also helps you to react to sudden changes in the market that your historical data may not help you adjust to, like the impact social distancing has had on consumer’s shopping and spending habits. Qualitative forecasting is useful when you don’t have enough data to reasonably make an educated guess, like if you opened your store three months ago and only just started collecting sales data. If quantitative forecasting is using data to come up with a measurable answer, then qualitative forecasting is using available information to make an educated guess. Instead of sales data, qualitative forecasting relies on wider market trends, expert opinions, and both primary and secondary research. It’s also useful to look at qualitative information when external events have drastically changed how consumers buy (looking at you, COVID). You may need to use qualitative forecasting when you don’t have a lot of sales data to draw on to make accurate predictions. Qualitative inventory forecasting relies less on historical data. If, however, sales have been steadily decreasing for a certain product or category, you might want to hold off on including them in your next purchase order. If, for example, you’ve noticed that sales for a product or category have steadily increased over the past 6 months, it may be safe to order higher volumes of that product. That’s not to say that quantitative forecasting is entirely dead. In other words: your past sales data alone doesn’t tell the full story. In a pre-COVID world where we could rely on the past to predict the future, quantitative inventory forecasting alone helped you know how to meet consumer demand, seasonal or otherwise.īut as HBR reports, demand has changed over the years -especially now with economic changes resulting from COVID-19, notably consumer buying power and what they’re choosing to buy. For instance, a few years of sales data gives you an idea of seasonal trends. The longer you’ve been tracking sales data, the larger your data set was and the more accurately your predictions would be. Quantitative inventory forecasting primarily relies on historical sales data found in your point of sale system. Rather than rely too heavily on one or the other, you’re likely better off using a mix of both. Traditionally, merchants could look at their sell-through rates and sales reports to see which stock they should order more of and how much they should order, but now, forecasting takes a mix of both quantitative and qualitative information. Having a reliable way to forecast how much if a particular SKU you need to meet demand is essential, but more challenging with COVID-19.
0 Comments
Leave a Reply. |