We all know snow shovels aren’t going to sell in the summer and beach towels will flop in December. Most of us can identify general seasonality and spot a really bad seasonal index by applying simple common sense. But do you frontload your key seasons or reduce orders because your replenishment system doesn’t quite get the job done?
2. Do you frontload your key seasons or
reduce orders because your
replenishment system doesn’t quite
get the job done?
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3. Do you frontload your key seasons or
reduce orders because your
replenishment system doesn’t quite
get the job done?
You might be running into these
common seasonality issues that
cause retailers big headaches.
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5. Your demand forecasting or
replenishment system doesn’t separate
off-price sales from regular-price sales.
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Promotions and Clearance
6. Your demand forecasting or
replenishment system doesn’t separate
off-price sales from regular-price sales.
This causes your system to see false
seasonality due to ads or overstock
markdowns.
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Promotions and Clearance
7. Copyright Data Profits 2015
Promotions and Clearance
0
100
200
300
400
500
600
700
Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec
Regular Sales Promo sales
Sales for Item A
8. Copyright Data Profits 2015
Promotions and Clearance
0
100
200
300
400
500
600
700
Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec
Regular Sales Promo sales Index with Promo
Sales for Item A
Do you really
want to forecast
those promo
sales?
9. Copyright Data Profits 2015
Promotions and Clearance
0
100
200
300
400
500
600
700
Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec
Regular Sales Promo sales Good Index
Sales for Item A
Or
forecast
without
promo?
11. The demand forecast does not include lost
sales in the calculation.
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Lost Sales
12. Copyright Data Profits 2015
Lost Sales
0
200
400
600
800
1000
1200
Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec
Beach Towel Sales
Regular Sales Lost Sales
13. Copyright Data Profits 2015
Lost Sales
0
200
400
600
800
1000
1200
Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec
Beach Towel Sales
Regular Sales Lost Sales
Don’t lose
these sales
next year!
15. Your seasonal indexes rely on sales occurring
in the same week every year.
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Moving Holidays
16. Your seasonal indexes rely on sales occurring
in the same week every year.
What happens when Easter moves every
year?
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Moving Holidays
24. Snow shovels and ice melt only sell when it
starts to snow.
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Changing Weather Patterns
25. Snow shovels and ice melt only sell when it
starts to snow.
If your system is relying on last year's sales,
you may miss the early snowstorm or load up
for snow that never comes.
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Changing Weather Patterns
32. Some demand forecasting systems try to
smooth forecasts into pretty seasonal curves.
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Forecast Smoothing
33. Some demand forecasting systems try to
smooth forecasts into pretty seasonal curves.
Smoothing takes some of the in-season sales
and redistributes them to out-of-season
weeks.
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Forecast Smoothing
34. Copyright Data Profits 2015
Forecast Smoothing
0
200
400
600
800
1000
1200
1400
Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec
Beach Towels
Regular Sales
35. Copyright Data Profits 2015
Forecast Smoothing
0
200
400
600
800
1000
1200
1400
Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec
Beach Towels
Regular Sales Smoothed Forecast
36. Copyright Data Profits 2015
Forecast Smoothing
0
200
400
600
800
1000
1200
1400
Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec
Beach Towels
Regular Sales Smoothed Forecast
Do you want to
buy beach towels
in January?
37. Copyright Data Profits 2015
Forecast Smoothing
0
200
400
600
800
1000
1200
1400
Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec
Beach Towels
Regular Sales Smoothed Forecast
Do you want to
buy beach towels
in January?
Are you going
to buy enough
in June?
39. Copyright Data Profits 2015
Too Broad
The same seasonal index is applied to many
locations and products.
40. Copyright Data Profits 2015
Too Broad
The same seasonal index is applied to many
locations and products.
Unfortunately, this leaves Texas and Wisconsin
stores with snow shovels at the same time.
46. Fixing even one of these issues could increase
your GMROI, lower your average inventory
and make your customers happier.
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47. Fixing even one of these issues could increase
your GMROI, lower your average inventory
and make your customers happier.
Unfortunately, many demand forecasting
systems make correcting these issues difficult.
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48. At Data Profits we can help you fix your
seasonal indexes without all the
headaches.
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49. At Data Profits we can help you fix your
seasonal indexes without all the
headaches.
• user-friendly interface
• easy-to-read graphs
• customizable forecast alerts
• easier demand forecasting
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50. All Material Confidential - Copyright Data Profits 2013
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