February 28, 2025

Running an online business is exciting and challenging; with time, money, and energy invested, it’s hard not to expect a certain level of positive return. But who knows how long it’ll take to get to that point? Naturally, the initial focus is on growth—a testament to future expansion, though order fulfillment and customer trends can affect operational efficiency. When orders skyrocket, it’s a positive–only if your fulfillment operations can keep up. But how can brands handle, own, and come out on top when customer demand spikes? Proper demand forecasting. What Is Demand Forecasting? Online retailers rely on keeping customers happy, which leads to brand loyalty, customer retention, and increased sales. Demand forecasting plays a part in the process by anticipating what products consumers want and when they’ll want them. Think “crystal ball” for ecommerce. Eyeing the future needs and wants of customers must be met with the right level of inventory stored at the most cost-efficient location to create a win-win shopping experience. While some may say demand forecasting is not an exact science, its success rate is hinged on many factors. The more accurate the forecast, the better the business can accommodate inventory, marketing, and sales strategies. Demand Forecasting Is Ecommerce Truth In a perfect retail world, business owners can plan for each season and make decisions to meet those goals. What recent years have confirmed is how little control companies have when international affairs, economic hurdles, and natural disasters happen, disrupting the flow of goods and on-time deliveries. Predicting what will happen or what could happen is usually left to psychics, fortune tellers, and an intense game of Ouija. For ecommerce, demand forecasting solutions are based on data, detailing the what ifs of inventory needs and how unforeseen events could cause a change in plans. So, turn on those intuitive powers (yes, they help too) and discover why your market know-how is magnified by the information demand that forecasting provides. Historical Data Reads the Future By studying sales history and year-over-year inventory patterns, the analysis tells a story of what was and indicates what could be repeated in the near term, giving clues to future demand. But, it’s also important to consider how trends, seasons, and geographic location could impact order volume and product preferences. Test the Market Today People are influenced by what’s popular, typically wanting the next big shiny object in the room. The most talked about, shared products captivating online shoppers today are often the most relevant to immediate inventory needs and can indicate ongoing demand. To get a real-time pulse on consumer interest, conduct surveys to gain greater awareness into audience insights about current product lines and brands. Analyze customer feedback posted on review sites and across social platforms. The commentary tends to spell truth (good and bad); however, the emotions behind it show what makes customers tick and which products and new offerings will increase demand. Technology Speaks for Tomorrow Nothing can match the efficiency of human creativity paired with artificial intelligence. Incorporating personal business savvy with advanced technologies gives ecommerce platforms quick access to massive data gathered and analyzed, putting demand forecasting solutions quickly on the table. These technologies put business at the forefront of market knowledge, with the tools to identify solutions and respond quickly. And with the use of advanced systems, ecommerce retailers can operate autonomously from shopping cart throughout the order fulfillment process to the unboxing experience. Plus, they can use the information gathered to improve overall brand performance. Apply EconometricsAs mentioned earlier, ecommerce demand forecasting success is a result of multiple scenarios working seamlessly as predicted. While you can control business operations, costs, employee schedules, and spending, it can all go off-kilter when local, national, and global economic data goes south. Large corporations look to leading and lagging indicators to guide their decision-making, ultimately affecting consumer confidence and online sales. Since the late 1990s, small businesses account for 43.5% to 50.7% of the U.S. GDP (Growth Domestic Product) output. GDP levels, inflation rates, projected consumer spending, and business predictions help determine what to expect in product orders, avoid oversupply or stockouts, and generate demand forecasting that flows with economic changes. The Benefits of Ecommerce Demand Forecasting Once online brands begin to use the features of demand forecasting techniques, the differences in business productivity, efficiency, and cost-savings are amazing. It’s like being ready for whatever the world and competitors dish out. Here are some of the ways demand forecasting can boost operational excellence, like Malbon Golf experienced, and propel growth potential faster. Own Inventory Management Accurate forecasting helps ecommerce retailers maintain the right inventory levels stored at warehouse locations that make the most sense to meet demand and tighten lead times, giving customers the products they want sooner. Demand forecasting technologies also alert order fulfillment and logistics workers when items are running low and where excess inventory can be found and shipped. And when SKUs are damaged, misrouted, or otherwise delayed, demand forecasting systems can locate replacement inventory to keep production moving and customers happy. Improve Customer Experiences Shopping online comes with high customer expectations. When people choose to purchase products from an ecommerce brand, it’s often because of the quick access to and fast delivery. Nothing can be a bigger spoiler than securing an item and heading to the shopping cart only to find it’s out of stock. Demand forecasting helps take disappointment out of the customer experience by connecting purchases with warehouse locations that have the inventory, giving ecommerce retailers the ability to deliver on promises and providing more opportunities to increase brand-following. Discover Cost Efficiencies “I appreciate having extra inventory sitting on shelves for six months,” said no ecommerce business ever. With demand forecasting, ecommerce brands can redirect oversupply where needed but also predict seasonal dips. With these insights, brands experience cost savings by working with a 3PL provider that can use the forecasting analysis to schedule the right number of workers needed in warehouses and distribution centers. By aligning inventory with demand, businesses can optimize their supply chains. Not only can this create storage efficiency, but it determines how many order fulfillment personnel and truckloads are needed to move product, eliminating unnecessary labor costs. Activate Marketing and Sales Strategies Knowing what products will likely be bestsellers helps ecommerce businesses plan effective marketing campaigns to promote them across multiple online channels. With that much time to organize, strategize, and engage in promotions, sales success is inevitable. Demand forecasting helps retailers see beyond what’s right in front of them, conceptualize alternative campaigns, and create new product bundles to bring to market. When product doesn’t move or trends show sales could be lackluster, demand forecasting helps redirect campaigns so ecommerce brands can pivot and turn a letdown into a leg up. Demand Forecasting Is Perpetual Motion Retailers could describe demand forecasting as a permanent solution to temporary challenges. Product demand can shift like the wind, and often does, making today’s forecasting yesterday’s news. To handle the demand fluctuations well, the benefits of forecasting technologies far outweigh the challenges that may pop up. As with any other business innovation, the cost savings and operational efficiencies that demand forecasting provides can only remain as relevant as its implementation and the ongoing investments made to update and upgrade the systems. Demand forecasting tools perform best when viewed as part of a larger continuous improvement program. And because demand forecasting works in tandem with logistics partners, the information shared increases visibility and transparency, opening the door to added risks. Here’s how to avoid them: Ensure system integration with partners works well Test and monitor technology adoption Watch for operational cost increases Maintain data integrity, security, and follow privacy regulations Customer expectations and demand forecasting are the moving targets of the ecommerce industry; one follows the other, and ideally, the two meet in harmony. Forecast Certainty with a 3PL Having all the answers 24/7 would be nice, but demand forecasting can’t promise that. However, by partnering with a 3PL provider, order fulfillment and logistics work in sync, so you know what’s going on at any given moment. Plus, with historical data, real-time reporting, and inventory management systems in use, demand planning is more reliable, ensuring perfect customer experiences. Find demand forecasting nirvana. Contact a Kase ecommerce order fulfillment expert.

Demand Forecasting: An Ecommerce Brand’s Guide

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