Demand forecasting, according to Wikipedia, is the operational activity of estimating the quantity of a product or service that consumers will purchase. Unfortunately, today’s demand forecasting activity continues to be built around a store-centric demand model. Yet, as Retail Systems Research (RSR) explains in a benchmark report titled, “Omni-Channel Fulfillment and the Future of Retail Supply Chain,” current business and supply-chain models assume that the store is the endpoint of a transaction. Without the acknowledgement of multi or omni-channel retail, traditional business activities will be challenged in their accuracy, such as demand forecasting.
As RSR’s managing partners, Brian Kilcourse and Nikki Baird, explain, “Many retailers’ demand forecasting capabilities are built around a store-centric demand model. And the response to a demand forecast survey shows that retailers still struggle with “legacy” store issues related to exceptional inventory, extremely fast or slow movers and intermittent items. Going from a relatively simple store-centric demand model to a wildly complex omni-channel one ain’t peanuts.” As a result, there continues to be much debate about the right way to forecast demand, which involves understanding the omni-channel world if any resolution is to be found. Simply, the best way to deliver on your promise to meet demand is to understand the technology your consumers are using to learn about and purchase your products, outside of your store.
IndependentRetailer.com recently covered the topic of mobile barcodes, which can be utilized in making your traditional print media more interactive. Many media companies and marketers use mobile barcodes as a means to create and manage measurable 2D barcode campaigns, extending brand engagement to consumers’ smartphone enabled lifestyles. For instance, Home Depot is offering to its do-it-yourself builders and home owning customers a taste of the new technology. Technology Marketing Corporation Contributor, Michelle Amodio, details Home Depot’s plan, saying, “In an effort to give customers more relevant information on product reviews, how-to guides and videos…2D barcodes will be placed in direct mail pieces linking to product information and video demos.”
Another learning channel being accessed by your increasingly technological customers, is the podcast. The word podcast comes from combining the terms “iPod” and “broadcast.” The term podcast actually applies to both audio and video recordings, yet most of the time refers only to audio broadcasting. Podcasts are downloadable so that they may be listened to on-the-go. According to the 2009 publication, The Social Media Bible by Lon Safko and David K. Brake, “Podcasting is really easy and is much more psychologically desirable to your customers and followers than just plain text.” At the time of this publication the authors cited that 30 million people were subscribing to podcasts, and that number was exponentially growing.
Furthermore, utilizing both video and podcasts will help tackle a few projects on your marketing to-do list. Participating in a video or podcast sharing sites may help you with two scheduled items: social media and search engine optimization. Point blank, using these two technological channels and social media forums will allow you to present you business and its mission, as well as products in an interesting and interactive way.
IndependentRetailer.com and Independent Retailer magazine have begun to breakdown your options when it comes to investing in selling channels. For instance, the increasing daily use of smartphone applications (apps) by your consumers has created a channel for your customers to purchase products. As Portio Research Limited’s report, “Mobile Applications Futures 2010-2015” forecasts, “The global mobile applications user base is expected to grow at a compound annual growth rate of 37 percent between 2009 and 2015 to reach nearly 256 million by the end of 2015.” Embracing the creative idea of releasing an app could mean that you will reach those 256 million potential consumers.
Also, as featured in Independent Retailer magazine’s May 2011 issue, social media is becoming a big selling channel, as retailers post promo codes, discount hours, and daily deals out to their growing Facebook fanship. The article mentions that ”The fast growing role of Facebook was a constant topic at the National Retail Federation’s Innovate 2011 conference in San Francisco in March. While most retailers’ social media presence remains limited to Facebook fan pages and a steady flow of Twitter posts, several conference presenters made clear that the retail industry is only scratching the surface of social media’s potential. Some are even going so far as to dub, “F-commerce,” with the “F” as in Facebook, the next big frontier.”
Whatever the next big frontier is, it goes way beyond the store-centric demand model. It is a wise decision to take advantage of the multiple technology-driven channels your customers are accessing, whether it be to spread information about your business or to sell products beyond your checkout counter. The next step will be to calculate all of this into a revised demand forecasting strategy.