Without a doubt, the holiday season is fast approaching. With that being said, the last thing you would ever want your business to experience is running out of stocks to sell to your customers. You wouldn’t want to mess up during the most profitable time of the year!
Looking from an inventory management standpoint, the holiday season is expected to be full of storms and challenges for any business owner. While serving your regular customers isn’t much of an issue, you need to put the “last-minute shoppers” into consideration when drafting your business plan for the holidays. It’s these guys who are not afraid to brave the holiday rush.
Adding in these last-minute shoppers to your regular customers results in a spike in demand for your products. With this in mind, you must guarantee to secure enough inventory to cater to both early and late shoppers to avoid missing out on the opportunity to gain profit.
Secure Your Inventory Early With Holiday Forecasting
So you might be wondering – How do I do this?
Here’s the solution – having a proper strategy in place. When you plan ahead of time, you can avoid any stockout situation. By doing this, you get to enjoy the most wonderful time of the year for your business too!
Here at Clearinity, we understand that the holiday season is a critical time for business owners like you. With that being said, we want to make sure that you have enough inventory to meet your skyrocketing customer demand.
Prevent your business from experiencing any inventory minefield. You can do this with holiday forecasting.
This technique sets your business for success, as it helps you equally:
- Calculate your inventory for the holiday season
- Determine your previous demand to help you identify how much inventory to stock up
- Prevent tying your money in excessive inventory, overloading your shipment services supply, and stressing both your warehouse and fulfillment staff
- Optimize your inventory so you never run out of stock for the holiday season
Forecasting Your Inventory
A survey by Dropoff in 2020 shows us that 77% of customers plan to do last-minute shopping on the holidays. The rate in this survey is predicted to rise by 15% this year.
This statistic shows us how considering last-minute shoppers when planning for your business’ inventory management is vital. You need to put the right inventory management decisions in place to guarantee that there are still stocks left to accommodate these last-minute shoppers.
With the aid of forecasting your holiday stock, it’s easy to launch your business to extreme success during the holiday season.
Speaking of inventory forecasting, what does this mean anyway?
Inventory forecasting refers to keeping a strategy of having the right stock levels for your products. Also termed as demand planning, inventory forecast also helps your business utilize previous data and trends that make it easier to predict your future inventory.
Use your holiday inventory forecasting techniques actively. This will guarantee that your business has enough products to fulfill all your customer orders (both the regular and last-minute shoppers.)
Overall, inventory management forecast ensures that your business:
- Prevents overstocking that might result in holding costs
- Avoid holding too little stock that might risk your business from losing potential sales
No business is immune from product shortages on the holidays. But by having a solid forecasting algorithm, you might just save your business from experiencing supply chain problems.
2021 Holiday Forecast
A recent release by Retail Info Systems (RSI) expressed how important omnichannel selling is going to be this holiday season.
With businesses in limbo due to the rise of Delta Variant, business owners are in doubt whether to push through with brick-and-mortar stores or online selling. Whether they choose brick-and-mortar stores or online selling vise versa, both predict a high volume of omnichannel orders.
A surge in demand for furniture and appliances is also expected. This was mentioned by the CEO of PICKUP, Brenda stoner. The surge in demand results in business owners being more focused on building their product websites to capture more sales.
Lately, more business owners are even investing in software that provides them with better workflows too.
So, what’s the key to ecommerce business success this holiday season? It’s securing a solid digital channel to solidify inventory management, promotion, order management, and shipping alike.
Types Of Inventory Forecasting
There are four different types of forecasting methods to choose from. You are free to make your choice depending on which method you think fits your business best.
Choosing the RIGHT forecasting method will highly depend on your knowledge on your stocking issues, sales feedback, mathematical analysis, and market research.
Here are the four different types of forecasting you can use on your ecommerce business:
Demands for products are volatile and change from time to time.
But with trend forecasting, it becomes easier for your business to predict future demands of a product that highly depend on seasonal factors.
When doing this method, focus on the granular sales data. This will help you identify the specific types of customers that make a purchase decision before buying your products. This strategy will also help you identify how you can switch gears in terms of your marketing efforts.
Graphical forecasting is when you look at sales trends from a mathematical standpoint in a form of graphs. This visually shows you the highs and lows of your business’ sales.
Many business owners enjoy doing graphical forecasting because it is more visual. Thus, making it easier to study data points and sloping trend lines that determine how your sales have been doing.
The qualitative forecasting method involves complex data and information to determine the trends of your inventory. These include market research and focus groups.
Commonly preferred to qualitative forecasting due to its accuracy level, quantitative data relies on previous numerical data to identify trends. The more previous data you analyze, the more precise your forecasting becomes.
Quantitative forecasting includes time-series forecasting that utilizes temporal information to create a model that can predict future trends.
Having a holiday inventory forecast within your business during the Christmas season will not only prevent you from typing up your money with extra stocks but also guarantee you have the right amount of inventory to cater to all your gift-seeking customers.
Besides that, this strategy will also help you optimize and manage your inventory better!
Here at Clearinity, we want to make sure that you utilize the right inventory forecasting tools to help you easily study the important data to conclude your business trends. We want to make sure that you make the most out of the most profitable time of the year!