If you have a retail business, you have probably heard about the importance of demand forecasting . This is an indispensable tool that helps to compose the mix of good practices, especially in the planning stage.
It is a fact that business planning is crucial for any type of company. However, for the retail sector, it is a key factor that guarantees the success and survival of the company in the midst of a threatening scenario in which we find ourselves.
On the other hand, the absence of strategic planning implies the absence of a clear and objective direction that the company must follow. This can lead to numerous barriers that can lead the company to bankruptcy.
We will talk more about the importance of demand forecasting below and how to implement essential practices in planning your retail business. Check out!
How to do an effective demand management
In order to define the demand for a given product in stock, it is necessary to analyze several important factors such as: competing prices, purchase history, consumer preference, advertising results, level of economic activity, accessibility, etc.
If the establishment lacks a certain product that customers are looking for, the stock out is characterized . This has irreparable consequences for the business. So, see the main steps of the demand forecast!
1 – Manage a complete database
The first thing to do is to establish a data control that shows the purchase history. Information that explains the variation in purchasing behavior, for example, seasonal products, should also be included.
In this way, it helps the manager to understand the main internal or external factors or variables that influence demand behavior.
2 – Prioritize the integration of departments
For the previous step to be completed, the areas of inventory, sales and planning must be fully integrated in order for data sharing to be accurate.
If the prediction analysis is left to the commercial sector alone, for example, there will be only market and supplier data, the important thing being to combine this data with the history of sales and outflows. Precisely to avoid these divergences and lack of information, this entire process must be integrated with different areas of the company.
3 – Invest in technology
Achieving maximum precision and objectivity, coupled with automation that works and does not leave flaws, requires software as agile as its strategy. It is useless to do strategic business planning with good demand forecasting practices, if at the end of the day the company does not have a tool capable of putting all this into operation. So, in order to guarantee an efficient demand management, it is necessary to have a system with stability and agility, which will be responsible for defining the main forecasting models, identifying the promotion variables, price and creating personalized processes with a focus on priorities.
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