What is eCommerce Demand Forecasting?
eCommerce demand forecasting is the process of predicting and estimating your business’ products, services, and sales future demand. You want to predict and create accurate benchmarks that will help improve your cash flow, marketing strategy, and procurement processes.
eCommerce demand forecasting is important in order to understand sales trends and have an advantage over your competitors – while ultimately outselling them. The information you’ll glean will help you make the best decisions for your business. Knowing how to implement practical tasks such as how much to order and how to price your products will allow you to grow and increase your profit.
Benefits of eCommerce Demand Forecasting
Several benefits will payout in the long run as you actualize your eCommerce demand forecasting, including:
- Improve pricing and sales strategy
- Fulfill customer demand
- Reduce business risks
- Leverage against competitors
Strategic Pricing and Sales Forecasting
eCommerce demand forecasting is a great tool for spotting improvements in your pricing and sales strategies. Because prices are never fixed, it’s crucial to know where you can benefit from pricing changes. And working with an automation tool such as Cymbio will allow you to oversee the products sold cross-channel and adjust accordingly.
One example of this is a business that sells summer sports equipment. Knowing your predicted sales for seasonal items allows you to lower the price during the down season instead of reducing the number of orders. And the same applies to the high season as well – raising prices in place of ordering more stock.
Marketing for Customer Demand
How does eCommerce demand forecasting relate to customer demand for your products? Understanding customer traffic and purchasing trends are crucial when it comes to marketing efforts – looking at customer behavior shifts across digital channels, launching new product campaigns (on your DTC website and also on retail and marketplace partners), email marketing, advertising, and inventory management. When you know what, where, and when to stock your products, inventory planning becomes so much easier and more productive.
Reducing Risk
There’s always an element of risk that comes along with growing an eCommerce business, but eCommerce demand forecasting helps you minimize that risk. Business mogul Warren Buffet, understands this concept all too well as he once famously quoted, “Risk comes from not knowing what you’re doing.” Using one unified platform such as Cymbio will provide the visibility necessary among all marketplace and retail partners.
Why not implement educated and analyzed information to make calculated decisions? Reduce the risk in your business by controlling what goes into it to better govern the output. Then you’re equipped to plan for those product launches and know how to handle your competition and economic issues that will undoubtedly come your way.
Taking into consideration current and past trends will allow you to detect activity and sales patterns to benchmark future expectations. And you can always adjust and change directions if something isn’t working as you predicted.