B2B traditional and statistical forecasting methods have one fundamental flaw … they calculate everything from a single data point…. the historical number of sales. It is clearly the obvious place to start but we all know what sells well one week may not the next and for no apparent reason.
What we do know is that this change in demand is derived from changes in customer orders which in turn is driven by changes in individual business environments. Thus, in order to understand your demand you need to understand each of your customers’ own business environments and work out how that impacts what they need from you.
Welcome to Hyper local demand predictions and the benefits of not just knowing what your customers want but also where and the day they actually need it!
The easiest way to explain how hyper local predictions work is by explaining how they are created. First thing you are going to need is AI capability (or catsAI) as your resident excel wizard just isn’t going to be able to replicate this on a spreadsheet.
1, Take your historical sales data (same as what you use today) and break it down into customers and SKU’s.
2, For each customer, create individual daily historical virtual business environments using other data sources (i.e. weather, holidays, festivals, local events, local competitor landscape….).
3, Overlay this with the historical daily SKU sales data and identify how the daily changes in each business environment resulted in changes to sales.
4, Identify where SKUs are reacting in a similar way to the same influencing factors to create clusters (this aids historical sales data gaps for newer products).
5, For each customer, create an individual daily future virtual business environment via other data sources (weather, holidays, festivals, local events, competitor landscape….)
6, Overlay the learnings from steps 3 and 4 with 5 to create a hyper local demand prediction at an SKU and customers level
7, Repeat daily
Clearly there are a number of benefits obtained by knowing what, when and where customers’ needs are. But the current driver shortage has seen the same hyper local demand predictions used by the warehouse managers, to optimise inventory, now also being leveraged by the logistics manager due to the need to ensure that they are totally optimised not just by a daily route (as they were) but by coverage area across the whole week.
The good news is that catsAi.co.uk have made this horrendously difficult, expensive and bespoke process …
– cheap (from £300 for 8,000,000 predictions)
– easy (no GUI to learn we just provide you with the demand predictions)
– accurate (it’s hyper local…)
So that everyone no matter how small or large their business is, can leverage the power of Hyper Local Demand Predictions.