Demand forecasting is looking at historical sales data to predict future sales and make informed business decisions about everything from meeting customer expectations to running sales. Demand forecasting is one of the most important—and challenging—aspects to your company’s success.

It can be difficult to look ahead and plan in a normal environment, and COVID-19 has only intensified the difficulty. Campbell Brown, CEO and co-founder at PredictHQ, says many companies are struggling to figure out how to anticipate demand for their products and services.

In this issue of Promotional Consultant Today, we share Brown’s thoughts on the five things businesses should be thinking about as they make forecasts for the next year.

1. Look for positive and negative demand. Before COVID-19, many businesses focused on positive demand in their forecasting. However, according to Brown, your team should also look for “decremental,” or negative, demand. He says both sides of the equation are critical to successfully navigating the pandemic. Consider and track the factors that could drive or reduce demand for your offerings.

2. Be prepared to shift accordingly. By now, you probably know the importance of pivoting in your business. That’s because people’s buying patterns are changing. For example, people did not stop buying food from the grocery store—they just changed their habits. Over the past several months, many consumers have made fewer trips and bought more per trip or used platforms such as Instacart. The takeaway is to learn how consumer demand is changing and figure out how to adjust.

3. Plan for pent-up demand. When creating demand forecasts, always account for pent-up demand. For example, Brown notes the pandemic crushed demand in some sectors but caused a surge in other areas. One such area? The residential market. Home sales surged in the United States, often leading to bidding wars. Consider how your business can plan for pent-up demand that may surge as your audience adjusts to the fluctuating economy.

4. Look for disparities by geographic region. According to Brown, companies should be hyper-local in their demand forecasting. That’s because the world has taken many diverse approaches to reopening economies. For instance, it makes sense to focus promotional efforts on clients that are located in areas farther along in their phased reopening.

5. Take note of virtual or half-attended events. When looking ahead, recognize that half-attended or online-only events can impact demand, as well. For example, retail stores, restaurants and transportation services near sports venues won’t experience the same level of increase in demand as they would for a game attracting 20,000 spectators, says Brown. However, one with 10,000 will still have an impact, affecting everything from beer sales to pizza deliveries.

The world is very much in flux with COVID-19 and will likely stay that way for quite some time. You can prepare your sales team and your organization for recovery and to react quickly as situations evolve. By considering the points above, you can be prepared for what comes next.
Compiled by Audrey Sellers

Source: Campbell Brown is the CEO and co-founder at PredictHQ, a global event intelligence platform.
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