When it comes to forecasting, retailers are trying to overcome many challenges that arise because they are running an outdated retail demand forecasting solution. Here are some of the challenges retailers face today and some ways they can overcome them.
Challenges with Existing Retail Demand Forecasting Solutions
- Forecast Accuracy - Forecasts are the foundation of every analytics-driven decisions. Increasing forecast accuracy drives top-line and bottom-line growth.
- Promotional Forecasting - Predicting the impact of promotions is the most difficult forecasting scenario for retailers. It also represents the greatest risk in lost sales and over-stocking. Increasing promotional forecast accuracy drives better results when it is most critical.
- End-user Management - Every item and every location has its own forecast. The typical end-user manages tens or even hundreds of thousands of forecasts at any time. Minimizing end-user forecast management ensures they can focus their time where it counts most.
- Inventory Levels - The movement of inventory is driven by a forecast. Increasing forecast accuracy ensures the right product is available at the right place and at the right time.
- Safety Stock - If a retailer does not have confidence in the forecast, they have to send more inventory than is needed so they don't lose the sale. Higher forecast confidence means retailers need to rely less on safety stock.
- In-stock / Service Level Targets - Anytime a retailer is out-of-stock, they risk losing the sale. Increasing forecast accuracy increases the in-stock rate.
- Single View of Demand - Every assortment, pricing and promotion decision impacts demand. Retailers typically make these decisions with disconnected and inconsistent forecasts. A single view of demand across ensures every decision is represented consistently across the enterprise.
Big Results From Cloud Solutions
As solutions continue to evolve, it's clear that cloud solutions are continuing to surpass on-premises solutions in the results that a retailer can gain. Recently, we evaluated our next-generation cloud-native retail demand forecasting solution against a specialty retailer’s current on-premises version where end-users were manually adjusting 50% of forecasts and found the below substantial outcomes. One impressive result was the solution improved 70% of the retailer's promotional forecasts. The retailer's executive team was blown away by these initial results and is excited to see the additional improvements that will come over time. See the full infographic here.
Handling Exceptions With Ease
These intuitive dashboards allow forecasters to easily and efficiently focus on priorities with exception-driven processes. Watch the 1-minute clip below to see the dashboards in action. If you missed our recent webcast on this topic, you can register for the replay here.
- Increased loyal customer base with higher in-stock rates
- Increased profitability and assortment flexibility with lower and targeted inventory levels
- Shift in focus to strategic planning and collaboration to drive operations with sophisticated and highly automated forecasts
- Access to an active community of hundreds of retailers worldwide using industry-leading forecasting capabilities
If you are looking for ways to improve your retail forecasting and planning processes, I suggest you check out this guidebook.
In addition, if you'd like to hear what retailers are saying about Oracle Retail Demand Forecasting or the retail industry in general, register for Cross Talk in June, which is a unique executive retail forum that connects brands from verticals around the world to share lessons learned, best practices, and innovative ideas about the future of modern retail.