Between November 27th and 30th November 2020, Black Friday and Cyber Monday is a promotional period that Shopify stores will experience a significant surge in demand for their products.
This year is will be unprecedented due to the Covid 19 lockdown measures affecting brick and mortar stores. Typically, Black Friday kicks off the start of Christmas shopping and the holiday season.
According to Shopify, 49% of U.S. shoppers plan to shop exclusively online during Black Friday and Cyber Monday 2020 weekend.
They expect even more shoppers in the U.K. (62%), Germany (53%), Australia (53%), and Canada (52%) to shop online exclusively this year.
According to Statistica expected spending over Black Friday weekend in the U.K. will be £7.5 billion of which £5.76 billion is predicted for online sales.
Whilst Friday is the main event it is predicted that most of the spending will take place over the Saturday and Sunday but shopping will take place in the days ahead of Black Friday.
Demand is also predicted to fluctuate on an hourly basis across the key event days.
Within the retail sector different products are more in demand than others during the Black Friday promotional period.
Shopify has suggested that clothing will be the number one category in the U.S.
In the U.K. clothing, cosmetics & perfume, jewellery, shoes, and electronics are the most purchased products on Black Friday.
Competitiveness is even higher during promotional periods. If a product is not available consumers have the option to go to a competitor especially when prices are heavily discounted.
Shopify stores may also lose that customer for good if the first-time order is not fulfilled.
Successful sales forecasting and demand planning with machine learning can help reduce those out of stock situations and boost customer satisfaction and experience with the online retailer's brand.
How can TrueStock help?
TrueStock utilizes high-performing machine learning algorithms to predict the volume of products or services to be purchased during a defined future period.
1. Build better and more accurate sales demand forecasts
During the Black Friday Cyber Monday period online stores capture huge amounts of customer data such as historical sales and pricing history.
TrueStock creates a more robust sales demand forecast as seasonality, the weather, events, and promotional periods are taken into consideration to predict future sales demand more accurately.
Unusual sales activity is also included in the forecasting process and anomalies can be detected before they happen by monitoring the difference between forecasts and actual sales.
Machine learning algorithms process the data at high speed allowing eCommerce stores to produce faster and more accurate sales forecasts for periods of high demand.
Stores can also adapt their pricing strategy during promotional periods based on product popularity and inventory levels. TrueStock automatically syncs with e-commerce stores daily so sales forecasts are ready when needed.
Accurate demand forecasting improves customer satisfaction and maximises sales during promotional events by providing customers with the product when they want it.
2. Ensure effective automated store replenishment
Sales demand forecasting is used to ensure eCommerce stores have enough stock to sustain customer demand during intensive and fluctuating promotional periods such as Black Friday and Cyber Monday.
Being able to confidently give suppliers a more reliable anticipation of demand increases the likelihood of uninterrupted product supply.
TrueStock also has an automatic replenishment process that informs you about future inventory replenishment quantities, the costs of replenishment, predicted revenue and the costs of missed sales opportunities.
It is also possible to add alerts on inventory including buffer levels and the supplier lead time so you can replenish with ease. Your teams can also be notified when stock levels are low or at a buffer stage allowing you to take immediate action.
During the Black Friday Cyber Monday period tactical promotional demand planning and automated replenishment can help drive cost savings through the reduction of overstock and freeing up valuable warehouse space.
3. Improve marketing focus and spend
As part of the sales demand forecasting process marketing activities are also considered within machine learning.
Return on investment of marketing from different channels and locations are analyzed and business insights provided allow marketing to pinpoint their spend and focus on future promotional activities.
Recent studies have shown that machine learning can improve sales forecasting accuracy by up to 50% and reduce lost sales opportunities by 60% (McKinsey & Company).
Be sure to improve the accuracy of your sales demand forecasts during this Black Friday Cyber Monday period and maximise the sales opportunities available with data driven machine learning.