CFOtech Australia logo
Technology news for Australian CFOs and financial decision-makers
Partner content
Story image

Why organisations should rethink the approach to retail demand planning and forecasting

By Contributor
Thu 8 Apr 2021
FYI, this story is more than a year old

Article by SAS Domain Lead – Advanced Analytics, Ray Greenwood.

If there’s one thing that every retailer can agree on, the past year has prompted a huge shift in retail thinking, and how to make the most of the internet to continue serving customers.

A hush fell over traditional brick-and-mortar stores while the internet served a booming trade. Consumer shopping behaviours and experiences changed. Consumers needed to be able to buy online, pick up in store or from the kerb, they needed same-day delivery and contactless delivery.

Retailers needed to deliver all of this in a seamless and simple way for consumers, upholding a consistent customer experience. Retailers that didn’t may well have lost customers to their competitors.

One of the key issues born from the pandemic was uncertainty around profitability and customer service, particularly in being able to predict and plan for demand. 

This issue can be mitigated with an accurate and efficient forecasting and demand planning process, but where do you start?

How scale and automation enhance forecasting and demand planning across the enterprise

Forecasting influences decision making, which in turn influences the direction of every business. 

When retailers use a cross-channel approach that remains consistent and connected across all of the decisions below, they have the ability to solve many different forecasting issues that may arise in areas such as merchandising, operations, and the supply chain.

Retailers should use forecasting to:

  • Plan a range of SKUs that have the correct choice count, breadth and depth
  • Make the right inventory investments that optimise profit
  • Ensure that inventory can meet customer demand whilst managing the supply chain
  • Ensure all stores and distributions have the right labour allocation
  • Create optimised price and promotional strategies

Retailers may find that large-scale forecasting and demand planning challenges need to be automated, and they need to be scalable. Automation can greatly benefit statistical forecasting by creating efficiencies in these processes and helping to achieve exception-based management.  Automation can also scale up and down to different levels of detail to ensure that the right decisions fit the purpose. Plus, with more automation, there’s more time for retailers to focus on new forecasting areas and business planning.

Advanced statistics enhance forecasting and demand planning

Data-driven analytics for the core of every forecasting journey. Whether retailers look at sales value and volume, store traffic or distribution centre activity, every decision needs to consider accurate short-term, medium-term, and long-term demand forecasts.

Advanced statistical forecasting methods such as predictive algorithms, time series, and machine learning have the advantage of capturing causal variables. These variables could include price, promotions, and even weather and social media data. With this data, retailers can gain insights that can:

  • Anticipate demand based on ‘what-if’ scenarios and understand how disruptions could affect business
  • Provide an overview of what’s included -  and missing - from forecasts to improve business decisions and forecasting methods

Unique models can provide independent forecast generation based on product/location and time series to capture demand insights at different levels of detail. Retailers can also use automation to reconcile and align forecasts within the planning hierarchy.

Forecasting SKUs and stores can be tricky due to different demand levels - seasonal products may have short demand cycles, other products may experience bursts of demand. By using forecasting models that analyse each demand segment independently, retailers have a better idea of what sells, and when.

Unified and repeatable workflows enhance forecasting and demand planning

We’ve talked a lot about demand modelling, but that’s only part of the entire picture. Workflows need to be unified and repeatable for the users. There’s no point in forecasting if the analytic insights can’t be used in collaboration with subject matter experts.

That’s why they need to be properly integrated into downstream planning and execution systems so that users can identify risks and opportunities. These insights will drive better planning productivity, better understanding of demand drivers, and better inventory management.

The road ahead

Retailers will always need to deal with uncertainty, but a robust, repeatable, an automated approach to forecasting and demand planning will provide an immediate understanding of the various factors impacting supply chain activity, enabling businesses to make the right decisions about potential opportunities for growth and profitability.

Related stories
Top stories
Story image
Ransomware
Examining the future of ransomware threats with Vectra’s CTO
As customers' valuable data move to the cloud, so will ransomware. What is the current landscape and what do we need to know?
Story image
Apple
Your tools, your choice: why allow employees to choose their own devices?
Jamf Australia says giving your team the freedom to work with their digital device of choice could help to attract and retain top talent in a tight labour market.
Story image
Recruitment
Thales on recruitment hunt for next disruptive innovations
"Recruiting new talent is part of Thales's belief in the power of innovation and technological progress to build a safer, greener and more inclusive world."
Story image
Sustainability
Honeywell named Frankston facility services provider
Honeywell has been named the joint facility services provider for Frankston Hospital’s AU$1.1 billion redevelopment.
Story image
New Relic
How to tackle the great brain drain in the tech industry
Attracting and retaining tech talent in Australia and New Zealand is becoming increasingly challenging, with the 2022 Hays Salary Guide showing a startling 91% of employers facing a skills shortage.
Story image
Fintech
Corpay announces new collaboration with Triterras
Corpay and fintech firm Triterras have announced a new collaboration between Corpay’s Cross-Border business and Triterras Inc.    
Story image
Macquarie Data Centres
Macquarie deal to pioneer CO2-cutting data centre tech in Australia
Macquarie Data Centres has signed a multi-year deal with ResetData, an Australian first provider using Submer data centre technology. 
Story image
Telstra
Ericsson and Ciena, Telstra enhance service capacity for Telstra's optical network
Ericsson, Telstra, and Ciena have announced new enhancements to Telstra's Next Generation Optical Network, which will increase the service capacity of Telstra's optical network to 400 GE (Gigabit per Second Ethernet).
Project management
Discover the 4 crucial factors for choosing the right job-costing solution. Is your team struggling to cost jobs and keep projects running on budget?
Link image
Story image
Talend
Forrester names Talend Leader in enterprise data fabric
Forrester has named Talend a leader among enterprise data fabric providers in the Forrester Wave: Enterprise Data Fabric, Q2 2022 report.
Story image
Management
MYOB snaps up Sydney-based management software specialists
MYOB has announced the acquisition of Sydney-based business management software and support specialists, GT Business Solutions.
Story image
Infrastructure
New VMware offerings improve cloud infrastructure management
VMware has unveiled VMware vSphere+ and VMware vSAN+ to help organisations bring benefits of the cloud to existing on-prem infrastructure.
The Access Group
Health and social care organisations are currently under significant financial pressure. Find out how financial transformation can help provide an effective route forward.
Link image
Story image
Artificial Intelligence
Siemens expands NVIDIA partnership for industrial metaverse
Siemens is expanding its partnership with NVIDIA to enable the industrial metaverse and increase the use of AI-driven digital twin technology.
Digital Transformation
Discover the 5 signs your business is ready for a cloud-based ERP. Is your business being left behind as more of your competitors switch to the cloud?
Link image
Story image
Enterprise Resource Planning / ERP
Five ways your ERP is letting you down and why its time for a change
Wiise explains while moving to a new system may seem daunting, the truth is that legacy systems could be holding your business back.
Story image
Public Cloud
Public cloud services revenues top $400 billion in 2021
"For the next several years, leading cloud providers will play a critical role in helping enterprises navigate the current storms of disruption."
Story image
Dicker Data
EXCLUSIVE: Why women in IT makes good business sense - Dicker Data
The Federal government wants to bolster female participation in the tech industry to at least 40% by 2030. Here's how one homegrown Australian company has already reached that goal.
Supply chain
Discover the 4 critical priorities for wholesale distribution businesses in FY23. Are you worried about how supply chain issues may affect your business in 2023?
Link image
Story image
Payroll
How New South Wales state departments achieved cloud migration success
State departments in New South Wales are heading to the cloud to achieve better workflow solutions, and one company is paving the way for their success.
Story image
Hybrid workforce
How organisations can prepare for a post-pandemic workforce
The so-called 'new normal' office looks different to how it did pre-pandemic, and organisations need to take steps to better manage their post-pandemic workforce. 
The Access Group
Struggling to understand which transformative technologies will help your business? The Access Group provides a look into key opportunities and impacts for finance.
Link image
Story image
API
Industry-first comprehensive risk-based API security enhances protection
Application Programming Interfaces (APIs) have become a crucial part of operating web and mobile application businesses and are causing significant economic growth in the digital sector.
Story image
Airwallex
How Airwallex helps businesses achieve globalisation success
As markets continue to shift, businesses need to be able to provide the same quality of service for customers regardless of where they are located around the world.
Story image
Infrastructure
Global investment in data centers more than doubled in 2021
DLA Piper's latest global survey finds the total investment in data center infrastructure worldwide rose from USD $24.4 billion in 2020 to USD $53.8 billion in 2021.
Productivity
Discover the 5 ways your ERP may be letting you down. Is your current system outdated, difficult to manage, and costing you a fortune?
Link image
Story image
Manufacturing
Sutton Tools deploys Infor M3 CloudSuite for manufacturing
Sutton Tools has also implemented the Infor OS cloud operating platform, including Infor Intelligent Open Network and Mongoose.
Story image
Cloud
BT builds on Equinix partnership with new cloud offering
BT has launched a next-generation cloud connectivity offering extending its global network into strategic carrier-neutral facilities (CNFs) and building on its existing partnership with Equinix.
Story image
Accounting
Four factors to consider when choosing the right job accounting solution
Progressive job-based businesses can achieve success by strengthening their ability to quantify every cost attributable to the delivery of an outcome for a customer.
Story image
Wiise
Four things wholesale distributors need to consider for FY2023
In a post-pandemic world, there are many things for a distribution business to juggle. ERP solutions company Wiise narrows down what companies should focus on.
The Access Group
Increasing headcount isn't always the best way to grow. A good financial strategy can help solve many issues, and The Access Group shares the secret to success.
Link image
Story image
Cloudera
Overcoming hybrid and multi-cloud challenges to drive innovation
Driven by improvements in technology, financial services companies have advanced both internal and external systems and processes, with the likes of digitisation, personalisation and risk management redefining the industry.
PwC
PwC's Consulting Business and PwC's Indigenous Consulting are proud to play an important role in helping Australian Indigenous Mentoring Experience build IMAGI-NATION, a free online university for marginalised communities around the world.
Link image
PwC
WSLHD and PwC’s Consulting Business came together to solve through the challenges of COVID-19. A model of care was developed to the NSW Health Agency for Clinical Innovation guidelines with new technology platforms and an entirely new workforce.
Link image
Story image
Samsung
Monitors are an excellent incentive for getting employees back
The pandemic has taught us that hybrid working is a lot easier than we would’ve thought, so how can the office be made to feel as comfortable as home? The answer could be staring you in the face right now.
Story image
Tech job moves
Tech job moves - ActiveCampaign, Arcserve, LogRhythm & Qlik
We round up all job appointments from June 17-22, 2022, in one place to keep you updated with the latest from across the tech industries.
Story image
Cybersecurity
Tech and data’s role in the changing face of compliance
Accenture's study found that 93% of respondents agree or strongly agree new technologies such as AI and cloud make compliance easier.
Story image
Documentation
Adobe study finds lack of digital trust and utilisation in Australian Government agencies
New research commissioned by Adobe has revealed a significant lack of digital trust within Australian Government departments, along with the continued underutilisation of key digital processes.
Story image
Data ownership
Brands must reclaim trust by empowering data ownership
According to Twilio's new State of Personalisation Report 2022, 62% of consumers expect personalisation from brands, and yet only 40% trust brands to use their data responsibly and keep it safe.
Story image
Gartner
Gartner's top recommendations for security leaders
"Leaders now recognise that major disruption is only one crisis away. We can’t control it, but we can evolve our thinking, philosophy, program and architecture.”
Story image
Artificial Intelligence
Accenture shares the benefits of supply chain visibility
It's clear that gaining better visibility into the supply chain will help organisations avoid excess costs, inefficiencies, and complexity to ultimately improve their bottom line.
Story image
Data Protection
Five signs your business is ready to move to the cloud
Many organisations are thinking about moving to the cloud. But what are the signs you are ready, and what are the reasons to move?
Story image
Tech job moves
Tech job moves - Bitdefender, Cohesity, Fortinet & MODIFI
We round up all job appointments from June 27-30, 2022, in one place to keep you updated with the latest from across the tech industries.
Story image
Cybersecurity
Vulnerable APIs costing businesses billions every year
Large companies are particularly vulnerable to the security risks associated with exposed or unprotected APIs as they accelerate digital transformation.