The holidays are coming fast, and the last thing you want is to run out of stock during such a profitable time of the year. You may have enough inventory to handle your regular customers, but how about those last-minute shoppers? In 2018, Dropoff conducted a survey that showed that 77% of people planned to do their holiday shopping at the last minute.This year, that number is predicted to increase by 15%. This means that your customer demand will skyrocket around the end of December, right before Christmas.
One of your biggest concerns as a business owner would be ensuring that you have enough stock throughout the holidays to supply all of your customers, from the earliest bird to the last of your last-minute shoppers; You don’t want to miss out on one of the most profitable times of the year by running out of stock. Without a proper strategy in place, you may encounter a stockout situation and have to turn away some of those last-minute customers. This could be especially bad since they’re supposed to contribute to a large part of your holiday profit. In this type of situation, holiday forecasting might just be your solution.
Holiday forecasting is a technique that helps businesses calculate a budget for the upcoming holidays. It uses past demand to determine how much inventory businesses need to stock up on so that they can get through the holidays worry-free. Here is how you can come up with your own holiday forecasting model based on the clicks you’ve received through paid ads on Google.
Pick a holiday you want to create a forecast for, and then examine the click data that you collected for it during the previous year. Make sure that you’re using reliable data since this will directly influence the accuracy of the forecast.
Project how much you expect your demand to grow this holiday. Determine this by using the data that you’ve already collected throughout the current year, and compare how demand rates grew at a weekly rate in both the current year and the previous year. Comparing the weekly rates across a span of several years will yield more accurate results.
Lastly, incorporate the growth rate that you’ve calculated in step 2 into the previous years data from step 1 to show you an approximate number of holiday clicks that you’ll receive this year.
While measuring this data through Google ad clicks may not be suitable for every business, there are many similar methods of forecasting for the holidays. Analyze your sales data from previous years, and come up with projections for your holiday demand. The earlier you do this, the better prepared your warehouses and employees will be for the influx of gift-seeking shoppers.
Since there’s a lot to be done when preparing your business for the holidays, it’s easy to get lost in the pile of work. But we’ve got you covered. Check out our holiday resources, that include an ebook, video, and a few webinars, to help you get everything in order for the upcoming season!