How To Anticipate Demand In Your eCommerce Store
Forecasting how many sales you hope to make can be a very difficult task for any eCommerce business, and yet, it’s one of the most vital. Without having an indication of how much demand you can expect for any given item or range of products, how can you ensure you have the appropriate amount of stock on hand. Too much stock, and you’re paying for the costs to store it and maybe even be left with it unsold. Too little stock, and you physically won’t be able to make any sales. Having stock available and ready to dispatch is essential to ensuring you can keep customers happy and run a profitable business. So what can you do to anticipate that demand in your eCommerce store or marketplace shop?
- Forecast demand using past sales data
The most accurate way to predict what the future might hold is to look at the past.Go back monthly, quarterly and yearly and look at your previous sales history. From this, you should be able to determine which products consistently sell well, and whether there are certain products which see peaks and troughs throughout the year. Ideally, you’ll want to look at each marketplace you’re selling on, and break down sales by channel; what sells well on Amazon might not move as effectively on eBay. Having the right multichannel software in place like ChannelGrabber will allow you to easily analyse product sales across every channel. Take a look at your Google Analytics data too if you have it set up for your eCommerce store. By looking at your website traffic over the past year, you’ll be able to see any spikes where you might need to have more stock on-demand in the coming year. What if you haven’t been operating long? If you only have a few months of sales history to look at for your marketplace or store, or you’re just launching your products on different eCommerce channels, then there are a few other ways you can anticipate demand.
- Look at industry trends and seasonal increases in demand
Just like car sales plummet in December and DIY shops boom around bank holidays, your industry will have common trends which you should analyse and take careful note of. If you sell fancy dress costumes for example, you’ll know that there will be an inevitable rise in demand in October, as customers prepare for Halloween. But, there may be a number of visitors to your site who ‘shop savvy’ and actually start buying well before the specific period. Be prepared for this too. Using tools like Google Trends can be very effective. Search by keywords and products, and then you can filter by location on a month to month basis, so you’ll be able to see exactly when search frequencies (and thus more visitors) increase for any given industry. Split your products into categories too, depending on what you sell, as they may be affected by seasonality. For example, with clothes, it’s obvious that hats, scarfs and gloves will see a surge in winter months, whilst shorts and bikinis are more likely to sell at the start of summer. Be aware of non-standard seasonality too. You won’t be able to control the British weather, so if there’s an unseasonable warm spell earlier than predicted in spring, you might find your BBQ tools are flying off the shelf. If you can capitalise on this, you’ll be a step ahead of the competition.
- Prepare your stock in advance for sales periods
Previously, brick and mortar stores all tended to follow a similar sales calendar for their industry, but this doesn’t necessarily apply online. However, there are still widely accepted, cross-industry sales; Black Friday and Boxing Day being the most common. Make sure you stock up ahead of time for these periods, as your competitors will be stocking up too.
- Analyse your competitors stock supplies
There’s also no harm in looking at your competitors either. Browse their products on Amazon and eBay and see how much they stock. If you can afford to stock one more item than they do, you could get that extra sale. If you notice they’re stocking up on certain products at specific times of the year, they are clearly anticipating increased demand, for one reason or another. Even if it’s for their own sale or promotion, you could piggyback on their marketing by having a full selection of stock available too, should they run out, or should customers prefer what you have to offer.
- Plan inline with your marketing strategy
If you’re planning a marketing push at any period, or you’re taking out advertising in any kind of medium for one or two months, your stock levels will need to reflect this. Look at past successes (and failures) if you have run marketing campaigns before, and analyse how demand for stock changed. If you haven’t tried any marketing tactics before, it’s a fairly safe bet to assume, as you would hope, that they will result in more traffic visiting your store. Don’t spend money sending visitors to your eCommerce shop for them to find you don’t have any stock available. Don’t get caught with stock in the wrong place The key with anticipating demand for your eCommerce shop and your marketplace stores is ensuring you have the stock available at all times and a flexible inventory. But multichannel selling can make things even more complicated, as you have to prepare for visitors buying from a variety of different channels. That’s why you need software like ChannelGrabber, which synchronises your entire inventory across every channel. As a seller, that means you can just focus on having enough stock in general; you don’t need to worry about the granular details of how much stock you should anticipate a demand for on each individual channel. ChannelGrabber takes care of that for you, as all your stock is placed on every channel, and updated automatically. That makes forecasting a whole lot easier. ChannelGrabber is hassle free solution to anticipating stock demand. Try out ChannelGrabber yourself, free for 14 days, and see how synchronised stock management makes multichannel eCommerce selling simple.