As the online retail market continues to grow, successful eCommerce businesses know that increased demand can present both thrilling opportunities and daunting challenges. Demand planning is an important business practice for any organization looking to accurately anticipate customer needs, maximize fulfillment cost savings, and drive growth efficiently.
In this blog post, we’ll explain just what eCommerce demand planning is and how your online business can utilize it to its advantage. Read on to learn more about incorporating demand forecasting into your strategy!
What is Demand Planning?
Demand planning is the practice of estimating consumer product demand to make sure there is enough inventory to fulfill demand. Reducing excess inventory and preventing supply chain interruptions entails using cross-functional procedures like supply chain management and inventory management.
It seeks to balance keeping enough inventory on hand to fulfill customer demand without stocking up too much. When this is accomplished, your firm will see increases in efficiency, profitability, and customer happiness.
Best Practices for eCommerce Demand Planning
Utilize the Proper Software
One may utilize various tools to estimate demand for their eCommerce firm. Although picking the best one might be challenging, it’s crucial to ensure that the devices can manage the numerous demands of demand forecasting. You must consider the provider’s standing, transparency, reporting skills, and prediction accuracy.
Gather Data and Prepare It
Real-time data has a substantial influence on your eCommerce demand planning. Obtaining inventory movement metrics data aids in identifying areas that require action or improvement. Data mining and aggregation are done on time can assist you in developing a more responsive process model.
Get Other People Involved
Demand forecasting and planning necessitate communication and collaboration with diverse stakeholders at each process stage. Key participants include suppliers, finance, operations, sales & marketing, demand planners, and other departments involved.
Create Process Models
To minimize misunderstanding during the process, your eCommerce demand planning strategy must follow a specified cycle. If the procedures and information are clearly defined, it will be easier to hold everybody accountable, resulting in underperformance. These are the steps of a well-planned demand process:
- Data collection
- Rough forecasting
- Market intelligence incorporation
- Examining financial reports and sales targets
- Refined final forecast
- Real-time performance evaluation
Have Well-Defined Roles
Supply chains are complicated since many individuals collaborate, and some may go lost in the process. To ensure understanding if participants do not entirely grasp what is expected, each participant in the process must have real-time visibility and clearly defined roles.
Prepare to Take Advantage of New Opportunities
A good demand strategy should not only forecast customer wants but also identify risks and possibilities for development. A rise in demand for a specific product may indicate that you need to boost your production capacity ahead of time by adding or transferring workers.
When a product is not available for purchase by clients, your company loses revenues and, eventually, customers. Our application BackOrder can solve out-of-stock situations and rescue lost revenue for e-commerce businesses. Excess unused inventory, on the other hand, takes up space and raises production costs unnecessarily. Demand planning enables company executives to keep ahead of market trends and make proactive choices while still meeting the demands of their consumers. Contact us today to go successful with eCommerce demand planning!