Retail Demand Forecasting: What, How and Why?

#demandforecasting #retaildemandforecasting #accuratedemandforecasting
“The only thing that is constant is change.”
-Heraclitus
Heraclitus couldn't have been more right, especially when it comes to demand forecasting in retail. Today’s customer preferences and expectations are more complex than ever. Purchasing channels and methods, fulfillment preferences, and customer segments are more dimensional and very different from classical models. That makes it increasingly harder for retailers to make better and more reliable forecasts to get the right inventory to the right location.
Now for many retailers, whether they are omni-channel champions or small brick-and-mortar stores, forecasting is king. Because it leads the way to better decision-making and execution. But it is important to remember that forecasting will always be inaccurate to some degree, without a crystal ball to predict the future. Still, it is a critical enabler for better inventory planning, and it is what holds the key to successful allocation and replenishment decisions.
So, what is demand forecasting in retail really? How is it done? What do retailers need to create better forecasts? Let’s find out.