The Secret Element Missing from Retail Demand Planning
Despite changes in consumer behavior since the start of the pandemic, the vast majority of consumers across all age ranges still prefer to buy retail items in person. A May 2021 survey revealed shopping in person as the preferred channel for consumers in the United States to purchase retail items (Statista). Here’s the percentage breakdown:
- 52% of 18 - 34 year olds
- 62% of 35 - 54 year olds
- 71% of those age 55+
For retail consumers, brick and mortar stores are still the ideal place for small-ticket, unplanned, or last minute purchases, and products they like to touch and feel before buying such as fashion and apparel. In-store associates also serve as a reliable resource for customers to get individual help or advice right away.
This makes it crucial for retailers to accurately anticipate likely demand and surges in footfall. Without foresight into coming spikes– or dips in demand, getting their staffing and stock ready to create happy customers is almost impossible. Let’s explore what makes demand anticipation critical to customer satisfaction, and how retailers can use demand intelligence to ensure a smooth experience for shoppers.
Customer satisfaction can make or break your reputation
Over 60% of consumers have switched brands as a result of poor customer service, with almost half of them doing so in the past year (Microsoft). With companies implementing new strategies to provide personalized customer experiences across multiple channels, shoppers today expect a top-notch brand experience. So even on your busiest days, it’s unacceptable to have a messy sales floor with products out of place, popular items out of stock, and long lines that make customers regret choosing your company when there are other available options.
A smooth shopping experience means easy access to the products and sales support customers want. Having insight into when demand will be low or high is key to ensuring shoppers can easily get the products they came in for, and that there’s enough staff to help them get in and out of the store quickly. A consistently positive experience with each visit to your store sites is foundational to customer retention, which is why retailers with reliable customer service can significantly improve customer satisfaction, foot traffic, brand loyalty, and ultimately revenue.
Sorry, we’re fresh out of that!
According to financial corporation American Express, more than half of Americans have walked away from a planned transaction because of bad service, and 33% of Americans will consider switching companies after just a single instance of poor service. When hungry customers are looking forward to one of their favorite go-to meals, nothing’s worse than hearing “sorry, we’re all out right now.” There are so many options competing to capture and retain their business— there’s no room for preventable inventory issues that can make or break customer satisfaction.
Or when there’s a graduation one weekend and families walking past your storefront on the way to the ceremony would have loved to grab a last minute gift like a bouquet of flowers, gift card, or a greeting card to say congratulations. With insight into predicted attendance for opportune events like these, you can nail your inventory to match the influx of customers for that day. With multiple store locations where similar community events are taking place, the revenue opportunity there may be much bigger than you think.
The ongoing retail struggle to accurately predict demand
Retailers are facing a giant blind spot when it comes to their inventory and workforce planning: a lack of insight into when and where to expect fluctuations in demand. Because they haven’t yet pinpointed why their demand fluctuates, these changes continue to catch them off guard. This means playing catchup to react to sudden surges in demand. Over one third of the top 50 U.S. retailers report poor forecasting accuracy, with many consumer products and retail companies reporting error rates as high as 50%.
As forecasting drives inventory planning, it’s no surprise then that…
- 65% of retailers consistently stock out on fast-moving categories and products
- 63% have too much inventory in slow-moving categories and products
IHL Group reports that this results in a major blow to retail performance at a whopping $1.1 trillion globally per year. That’s trillion, with a t. Of this figure…
- Out-of-stock products account for $634 billion in lost sales each year
- Overstocks account for $472 billion in lost revenue due to resulting markdowns
These problems are only magnified as the economy slowly continues to recover and retail sales increase. U.S. retail growth is steadily increasing, but the majority of retailers can’t keep up. This would explain why 53% of chief experience officers in retail list demand management as the top area where artificial intelligence can make improvements over the next five years.
But we do know events drive fluctuations in demand
Improving customer experience starts with making data-driven decisions. We know events drive fluctuations in demand, and that’s why businesses of all kinds are on the hunt for event data they can use to improve forecasting and demand planning. For retailers, their ability to analyze new data in new ways is the secret to having the right amount of the right product, at the right place, at the right time– and at the right price.
That’s why at PredictHQ, our systems find, verify, and predict the attendance of half a million events every month. Retailers and many other types of businesses use our intelligent event data to accurately pinpoint exactly when and where to expect an influx in demand, so they can plan accordingly.
Our platform makes it easy to search for verified events that drive impact to your store locations. In the control center, you can select from 19 event categories to search for including school closings, public holidays, sports, and more to find events happening near you.
Demand intelligence makes it easy for operations teams to identify impactful events that drive demand up or down. Be proactive by adjusting prices ahead of increased demand to maximize profits, and by stocking your inventory appropriately to minimize waste.
Events are happening all around us, every day
For businesses all around the globe, thousands of events are actively impacting their demand every single year. Our platform exists to help businesses big and small identify event-based opportunities and risks every single time, whether they have access to data science resources or not. Try it out for free today to see how easy it would be for every member of your team to leverage intelligent event data for actionable insights. That way, you can make sure your customers get the consistent, high level of service they know and love from your business.
Smooth operations lead to a smooth shopping experience. Try PredictHQ FREE for 14 days to see what demand intelligence can do for your business. signup.predicthq.com