NEW YORK, June 22, 2021 / PRNewswire / – CI&T, a leader in driving digital transformation for global brands, released today Solving Demand Forecasting Dilemmas for GICs and Retailers, which examines the demand forecasting relationship between retailers and suppliers. The report highlights weaknesses and opportunities for both parties, revealing a misalignment of data strategies resulting in ineffective forecasting.
Demand forecasting, which uses data and information to predict how much of a specific product consumers will want to purchase over a set period of time, is often a unique process in the retailer-supplier relationship and historically limited in scope. its data sharing capabilities. The unpredictability of purchasing habits accelerated by the pandemic, combined with the increase in the number of suppliers heading to DTC, justify reconsidering this obsolete relationship.
2020 saw significant shortages of toilet paper, bottled water and other essentials that could have been avoided if retailers and suppliers had established more collaborative partnerships and co-owned data and goals. of sale. In this report, CI&T says that the best way to ensure better forecasting of demand is for retailers and suppliers to share consumer, sales and cart data, and for both parties to lobby to improve their processes. .
The main findings of the report include:
- The biggest challenge for vendors in forecasting demand was visibility and access to data. The biggest challenge for retailers in forecasting demand was scaling the data platform
- Suppliers said they were the most likely to break down demand forecasts by geography, while retailers were the most likely to report demand forecast breakdown by channel.
- The majority of suppliers said they looked at sales data for the same month in previous years as a predictive approach, while the majority of retailers said they used the previous month’s sales to predict the next month.
- Suppliers and retailers have overwhelmingly stated that consumer-level data (gender, age, household size) is the type of data most likely to be leveraged for demand forecasting.
âDemand forecasting is the foundation of the retail industry. Recalibrating the retailer-supplier relationship to ensure more accurate forecasting will result in a wide range of benefits for all parties involved in the supply chain, âadded Melissa Minkow, Head of Retail Sector at CI&T.
âIf demand forecasting models improve through data sharing, stockouts are reduced, waste generation is reduced, and fewer items are marked down.
CI&T’s research focused on interviewing and surveying 115 executives from various big box retailers and CPG providers to determine where demand forecast disparities, weaknesses and opportunities exist for each party. .
View full report here.
CI&T is a digital solutions partner for some of the world’s largest companies, helping them drive growth and continuous innovation across businesses, people and technology. With operations through North America, Latin America, Europe, and the Asia Pacific region, CI&T has a proven track record in delivering complex end-to-end solutions for the digital enterprise. For more information visit www.ciandt.com.