How do forecasts affect your stores’ schedules? At what point does an inaccurate forecast ruin a schedule? How accurate are your forecasts today? These seemingly simple questions inspire fear in retailers. Most understand that forecasting is the starting point for short-term labor planning. It is from your forecast – whether you just schedule to what finance tells you, generate forecasts from your workforce management systems, or put it in the hands of your store managers – that lays a foundation for your schedule.
You can create a good forecast without a good schedule but you can’t create a good schedule without a good forecast. Still, while many retailers focus on forecasting during implementation, they forget about it after rollout as they turn their attention to the next big project. Over the next several months, this blog will tackle the ins and outs of forecasting. It will, as the headline of this post states, offer you a Retail Forecasting Playbook. While I’ll continue to post on other topics, you can expect to see regular posts from me and some great guest bloggers. Coming posts will cover:
Developing a Solid Forecasting Strategy . Some retailers adopt a one-size fits all approach to forecasting while others model the unique nuances of their different locations. The way you approach forecasting defines your strategy. We’ll show practical ways of developing a robust forecast strategy given the culture and style of your stores.
Rationalizing Multiple Forecasts . Chances are you have many forecasts in your organization. Why do you need another one for workforce management? We’ll discuss why these other forecasts are inadequate to meet your needs.
Selecting the Best Forecasting Methods. There are dozens of linear and non-linear forecasting methods to help you anticipate business demand. We’ll discuss when certain methods are better than others to help you hone in on the right forecasting methods for your business.
Measuring Forecast Accuracy. Too often, retailers compare apples to oranges when discussing the accuracy of various forecasts produced at corporate. We’ll look at the absolute best way to measure forecast accuracy and the three rules for measuring forecast accuracy to get everybody singing from the same song sheet.
Improving Forecast Accuracy. Once you can agree on how accurate (or inaccurate) your forecast is we’ll help you understand why and offer ways to improve forecast accuracy.
Identifying the Right Labor Drivers. Sales, Items, Transactions or Customer Traffic? Cartons, Units, Shipments or Palettes? How do you pick which drivers to forecast? We’ll let you know how to determine what drives your drivers.
Properly using Special Days. Special Days (also called Special Events) are powerful tools that help the forecasting engine handle unusual shopping behavior – both positive and negative – such as sales, holidays or store closures. Unfortunately many retailers do not use special days correctly which not only lessens their impact but can worsen forecast accuracy.
Reconciling the Forecast with the Budget. All retailers create budgets, but only some create store level forecasts. How do you reconcile a top-down budget with a bottom-up forecast? Which one is more accurate?
The Latest Trends in WFM Forecasting Engines. WFM vendors continue to improve their forecasting engines in an effort to increase accuracy and ease of use. What are the latest developments in the rapidly evolving area?
I hope that you’re as excited about this series as we are. We’ll use this post as the “table of contents” for future posts. Future posts will link back to this post and provide a jumping off point to all the other posts in the series.