The act of forecasting upcoming sales and financials is a challenging task. No one knows this better than retailers. Retailers need accurate, reliable data – and they need it yesterday! Otherwise, the act of planning and forecasting is even tougher than ever. Here are four common retail forecasting challenges retailers face when going through their forecasting process.
1. Maintaining data integrity
My spreadsheet says returns for last quarter were 7%. Yours says 8%. Someone made a typo somewhere along the way, but where? Whose data is correct and whose is wrong? And how do you keep this from happening in the future?
This type of problem happens all the time when retailers exclusively use Excel for planning and forecasting. If you’re not using a system that has a single source of the truth, it’s tough to know when your data is right and when it’s not.
2. Waiting on reports for retail forecasting
You can’t make decisions without the right data, and you need the data now. But for some reason the weekly reports haven’t been sent out yet. How are you supposed to update your forecast when you don’t have the numbers you need?
A lack of timely data causes issues for retailers all across the country. If you aren’t able to go into a system yourself and pull reports on your own, chances are you’ll be spending a lot of time waiting around for the information you need.
3. Inability to drill down to lower levels of detail
Are you trying to plan product sales by type at a store level, but your existing reports only show total sales by store? What about specific color combinations – can you see which styles were most successful by type?
We all wish we had more data to make better decisions, but there are clear limitations inherent to Excel-based planning. No matter how complex the pivot tables and VLOOKUPS are, there’s still data that simply can’t be measured effectively without a more robust software solution. Fortunately, these types of solutions do exist. Learn about evaluating technologies in this blog post about considerations when evaluating retail planning and analytics technologies.
4. Hearing “I’ll get back to you”
How many times have you heard that during weekly meetings? You or your direct reports are asked a question and you simply don’t have the right data available. You need to pull a different report, possibly at a different level of detail, and get back with the answer.
Or worse, this type of data just simply isn’t available to you (and somebody needs to go talk to IT!) On the other hand, having a responsive system with live access to your company’s data allows you to change reports and pull different levels of detail on the fly. If you aren’t armed with this type of responsive data, your planning process will undoubtedly take you longer than it needs to.
It is clear, retailers face a number of forecasting challenges that make planning and budgeting difficult. Fortunately, there are a number of tools available to help simplify and streamline this process.