Understanding customer behaviour is crucial, and whilst we can look historically, a forecast is often far more valuable and reliable and a key factor in driving incremental sales growth.
Working with retailers we know how difficult it can be to forecast and how important those forecasts are for product development, stock buying and ultimately sales. No one wants to be in a position where they have a stockroom full of products at the end of the season, or the perpetual ‘out of stock’ across the website, empty shelves and disappointed customers.
A forecast’s accuracy is improved by using the most relevant data, i.e. market data not skewed by retailer’s historic activity. More robust data equals a better forecast. Living and breathing this issue day-to-day with our clients, we created a proprietary solution incorporating multiple sale-driving keywords per product group instead of single words to ensure we get the full picture, and incorporating 5 years of history instead of 1 or 2 years.
The below graph shows that relying on one keyword gives different demand indicators in contrast to clustering similar products and using a combined trend. Our method results in successfully identifying when and how much demand there is in the market for particular products.
Our forecasts also consider changes in long-term trends, seasonality, the significance of moving events such as Easter, and the recency of historical data, leading to more accurate predictions. We are constantly developing our forecast & clustering process and building in new modules e.g. weather, to ensure the most accurate forecast is provided for our clients.
Data defining the Rosé demand!
You know it’s the height of the British summer when – as the sun comes out you walk outside to the smell of barbequing and see people sitting al-fresco with a glass of rosé in their hand… Does anyone actually drink rosé indoors or during the rest of the year? We did a study on the impact temperature has on demand for Rosé.
Our results show:
- Not surprisingly, demand for rosé wine is positively affected by increasing temperature
- Here’s the exciting bit – when the temperature exceeds 15˚C, every 2˚C increase in temperature results in a 20% increase in demand – better start stockpiling for the next heatwave!
Would you like to know the demand for specific products that you sell? Get in touch with Isabel to learn more!