Do You Have the Demand Forecasting Capabilities to Meet Your Omni-Channel Customers’ Demand?

There has been a revolution in retail. It’s been driven as much by consumers embracing technology as it has by innovative business models. In fact, many retailers have failed to keep up with customers’ changing shopping habits and are still struggling to develop and use accurate demand forecasting for inventory planning. 

In short, your customers have become omni-channel shoppers and they now expect you to deliver an omni-channel experience at every touch point, online and in-store. If you can’t provide the right inventory your customers want at a place and time that suits them, you will lose the sale. That means you need to be able to predict the most efficient way of getting your inventory to your customers when they demand it.

All forecasting systems on the market look at historical buying patterns, sometimes going back three or more years. Many will take account of environmental and social factors, such as weather, holidays or the day after payday. This became the classical method – but it is wedded to the view of the physical store as a standalone entity, where physical sales happen in real time, not part of a dynamic ecosystem shaped by changing consumer preferences. 

Hours or days can now separate the purchase point from the moment when the actual inventory item transfers from the retailer to the consumer. That physical delivery location is also increasingly distinct from the sale point (say online) and fulfilment point (a warehouse or store). On top of that, handling customers’ returns add another level of complexity for retailers. Today, stores handle multiple returns from their own in-store sales and from other purchase points.