网红黑料

Reach your most audacious revenue goals by meeting all the demand that comes your way. Here鈥檚 how.

Ever tried throwing a dart onto a moving target in high winds while riding on horseback鈥� backward? You basically have because you鈥檙e in DTC, and meeting customer demand in 2022 is much, much harder than hitting that bullseye.

Keep in mind: Meeting demand isn鈥檛 just staying in stock so you can make the sale. It鈥檚 also avoiding excess inventory that weighs down your bottom line.

Starting to sweat? Don鈥檛 worry 鈥� you鈥檙e not the only retailer struggling to meet demand.

These days, meeting customer demand through accurate demand forecasts is a widespread challenge. One that鈥檚 difficult to get right and expensive to get wrong.

Even stalwarts like and suffer the consequences of inaccurate demand forecasting.

Afraid of more figurative and literal traffic jams in the supply chain like the issues that permeated 2020 and 2021, these retailers stocked out and then over-ordered to compensate. Now, they鈥檙e reckoning with high inventory levels, and lower demand.

Luckily, having the right tools and tactics can ensure brands like yours meet customer demand every time. Here鈥檚 how you can hit that bullseye.

What is customer demand?

Customer demand is the amount of interest people have in certain products or services at a specific time.

The challenge is that customer demand isn鈥檛 constant. It can increase and decrease based on external factors, like the pendulum swings of macroeconomics, unprecedented disruptions to the market (such as a pandemic), and consumer needs.

You can also strategically increase demand with, say, the right marketing initiative.

When retailers meet demand, customers can purchase their desired products quickly at a reasonable price without waiting for stock replenishment. This results in a great customer experience and higher profit margins for the retailer.

When retailers don鈥檛 (or can鈥檛) meet customer demand, people can鈥檛 get the products they want quickly or for a good price, leaving customers frustrated and revenue on the table.

Ecommerce retailers meet customer demand by forecasting related sales ahead of time using historical data and other quantitative and qualitative analysis methods.

Then, they use that information to make an accurate demand plan that coordinates inventory levels, marketing campaigns, and vendor shipping timelines to ensure a smooth end-to-end process that delights and retains the customer.

What happens when you don鈥檛 meet demand?

Not all business errors can ruin Christmas. But demand forecasting done poorly with incorrect data can lock in a brand鈥檚 Grinchy reputation for years.

Famously, Best Buy its 2011 holiday demand forecasting. It was so bad that online shoppers received a generic email days before the holiday, canceling orders they鈥檇 placed as far back as early November due to 鈥渙verwhelming demand.鈥� (Bah humbug!)

Of course, not all your stockouts will be this cinematic of a failure. That said, say they would stop doing business with a brand they loved after 1 bad experience. So, meeting demand is table stakes in today鈥檚 hyper-competitive ecommerce market.

That鈥檚 because stockouts slow down sales, burn customers, wreck your revenue goals, and more.

Stockouts slow down sales

If it feels like you鈥檙e seeing stockouts everywhere, you are. Adobe found in October 2021 that out-of-stock messages were from pre-pandemic levels in October 2019. Unsurprisingly, apologizing to customers 325% more than usual seriously impacts your sales!

Customers simply do not have patience for stockouts, a 2004 found. (We shudder to think what a comparable 2022 study would uncover.)

When customers can鈥檛 find what they want, less than half will make a substitute purchase. And nearly a third will buy the item elsewhere.

This means that retailers can lose nearly half of intended purchases when their customers encounter stockouts and abandon ship 鈥� making up sales losses of about 4% for a typical retailer.

(Again, that鈥檚 back in Ye Olden 2004 Days, so we can conservatively guess that percentage is much higher today.)

Customers get burned

If you can鈥檛 deliver on demand immediately, your customer won鈥檛 stick around. They instead make :

1. Switch to a substitutable brand permanently
2. Switch to another store for this purchase
3. Delay buying the product (backlogging)

What customers decide to do depends on the type of product they鈥檙e looking at.

For instance, you鈥檒l go to a different grocery store for an ingredient you need for tonight鈥檚 recipe. But you might wait for a dress to come back in your size if it鈥檚 for a special occasion that鈥檚 still months away.

Regardless of the product, however, it鈥檒l take longer for your customer to shake off the poor experience and rebuild trust in your brand.

A little graciousness and accommodation can go a long way in doing just that (like selling on backorder).

If your customers feel like you鈥檙e taking a personal interest in their frustrations and can see that you鈥檙e trying to fix the problem, they鈥檙e to stay loyal to you in the future.

Your brand reputation takes a hit

To protect your reputation and retain customer trust, you must meet demand as best as possible. And that means relying on robust backup plans and transparent communication when meeting demand isn鈥檛 possible.

Otherwise, you鈥檒l open the door for your competition to steal shares from your unhappy customers.

But not all stockouts are accidents (or bad for business). Brands in verticals like luxury fashion or streetwear often limit a 鈥溾�� to preserve exclusivity and generate buzz around new product launches.

This is called scarcity marketing. And though it鈥檚 compelling, it can often , especially when the advertised scarcity isn鈥檛 true.

Similarly, falsely advertising having plenty in stock can feel like a bait-and-switch to customers. Especially in a cross-channel shopping experience (where what鈥檚 available in your social shop isn鈥檛 actually in stock according to your website, for instance).

But your brand鈥檚 reputation doesn鈥檛 just mean your perception according to the public; it鈥檚 with your suppliers too. They rely on you to provide accurate production plans.

So, if you鈥檙e way off the mark and panic order willy-nilly, they鈥檒l begin to trust you less.

When this happens, providers will typically use their own forecasts or revoke discounts to protect their business鈥� viability.

(This can be especially dangerous if your supplier predicts demand conservatively, and it turns out your long-term forecasts were right all along.)

You end up with obsolete goods

Say you overestimate customer demand and overorder. Well 鈥� you鈥檒l create a truly unfortunate chore for your team: figuring out how to move excess inventory鈥� before it turns into dead stock.

are facing this challenge after overbuying in an attempt to provide protection against the ongoing supply chain disruptions.

These consequences multiply as retailers struggle to offload old seasonal goods while attempting to make room for new products.

This is called the 鈥�,鈥� which means retailers have limited time to move goods before they become no-goods.

Because of this bullwhip effect, inaccurate demand forecasting can harm your profitability and reputation.

But it can also show up in ugly ways, like overcrowded storage facilities and rushed discounting tactics. These responsive initiatives tie up working capital, accumulate holding costs, and hurt your bottom line.

Revenue decreases

As you know, your revenue depends on happy customers actually buying from you. So, when unhappy folks abandon their carts, that鈥檚 a sale that鈥檚 instead going to the most convenient or compelling competitor.

After all, remember Kmart? Not really? There鈥檚 a reason for that.

missed the Y2K memo and didn鈥檛 invest in supply chain technological upgrades as quickly as their main competitor, Walmart, which competed with them on price. This meant that Walmart usually had products in stock when Kmart鈥檚 shelves were empty.

The market鈥檚 verdict was swift: Between June 1998 and June 2000, stock prices for Walmart rose 82% while Kmart鈥檚 dropped 63%.

In 2002, Kmart filed for bankruptcy, closed hundreds of stores, and merged with Sears Roebuck in 2005. That is a Sears-iously (forgive me) anticlimactic way to go out.

What can we learn from this? Having inventory visibility 鈥� and inventory control 鈥� across your supply chain is your best bet for meeting customer demand. And it鈥檚 all-but-guaranteed to have a big payout.

Here鈥檚 how to do that without falling into Kmart鈥檚 pitfall: Create a smart but adaptable demand plan based on the benchmarks you know for certain.

Then, set aside plenty of resource allocation for pandemics, inflation, tornados, sea monsters, left-field pop crazes, and whatever other ecommerce challenges come your way.

7 ways to identify and meet customer demand

Balancing inventory and demand is a delicate science. Too much inventory in 鈥�safety stock,鈥� and you鈥檒l run out of storage space and clog your cash flow.

This exposes you to potential excess inventory complications like dead stock. Meanwhile, too little inventory, and you鈥檒l run out of stock, frustrating customers and suppliers alike.

So, think about it this way: When forecasting the weather, you must know the area鈥檚 ecosystem. Then, consider how it interacts with neighboring systems and review historical trends over many years to predict whether it鈥檒l rain tomorrow. (And it still might not rain tomorrow!)

Similarly, demand forecasting and demand planning won鈥檛 work in isolation.

To meet customer demand, you鈥檒l need to understand your customers and listen to what they say they want next. All while weighing their desires against historical sales and market trends.

Here鈥檚 how.

1. Define and segment target audience

The most market-intelligent, historically-backed demand forecast won鈥檛 do you much good if you don鈥檛 know your target customer.

Luckily, you have a lot of tools at your disposal for learning more about your customer segments (a fancy name for groups of buyers with similarities like geographical area, age, income bracket, and lifestyle).

By putting in this work, you validate that your products meet demand that鈥檚 actually there in the first place. After all, it鈥檚 much easier to channel existing demand than create it.

Trends on search engines like Google are a fascinating predictive tool for anticipating demand. Les Binet, an econometrics consultant, between a brand鈥檚 share of search and market share.

Basically, this means that as a brand鈥檚 share of search increases (for instance, you get a lot of website traffic for a search term like 鈥渕obile headset鈥�), market share typically rises as well.

You can use free tools like to learn more about what your audience is looking for.

Once you find your target customer, remember that the audience segmentation you may be targeting on advertising platforms is not necessarily who you鈥檒l reach.

Similarly, customer information delivered by data brokers might not perfectly mirror who buys from you.

Moreover, you may consider using that can give valuable analytics and help improve customer experience.

In fact, Harvard Business Review tested the accuracy of the digital profiles that data brokers sell. The results were shockingly inaccurate.

The age tier was only correct , and gender was right less than half of the time.

That isn鈥檛 to say, 鈥渄on鈥檛 use audience segmentation on ad platforms.鈥� You absolutely should to reduce wasting marketing dollars on the wrong people.

But it is a great reminder that when it comes to knowing your audience, sometimes the only final data point you need is your own gut check.

2. Aggregate and analyze historical data on demand

As the saying goes, past behavior is the most reliable predictor of future behavior. Meaning, your historical data likely contains a general picture of what your future demand planning should include.

Most retailers have systems for storing past inventory, marketing, and sales data.

Though, when we say 鈥渟ystems,鈥� we鈥檙e talking about a Rube Goldberg machine of forecasting inventory in Excel, pulled reports, quarterly presentations, and old POs. (While not perfect, some data is better than no data!)

In fact, Oliver Guy, Global Industry Architect at Microsoft Retail, shared on a :

And though 鈥減rioritizing visibility鈥� is what we at 网红黑料 are all about, it鈥檚 important to acknowledge that wrangling all that data is hard work.

Often, retailers hire demand planners (yup, it鈥檚 a job!) to audit their existing data, then forecast accordingly. However, this approach is eye-wateringly expensive.

Even 1 in-house demand planner costs your business upwards of $100k a year.

You can alternatively supplement your historical data analysis team with 网红黑料.

Our platform functions as a 鈥渢eammate鈥� that pulls in your disparate data sources, then turns that data into demand forecasting insights you can immediately implement.

(Plus, the tool does this for 35x less than what you鈥檇 pay a demand planner.)

3. Account for seasonality

In most industries, customer demand relies heavily on seasonal trends.

For instance, menorahs are popular holiday purchases before Hanukkah, but you usually don’t see them on shelves in May.

Likewise, sprinklers and inflatable pools are highly sought-after items during heat spikes, but during a snowstorm, you likely won’t get an email promoting Slip-n-Slides.

Knowing when your products are “in season” can help you meet the spikes in sales. That’s where forecasting seasonal demand comes in.

A blend of historical information, observations of customer behavior, surveys, and gut sense adds nuance to your inventory planning.

Plus, it can keep you from ordering the same number of menorahs for May as you would for November, leaving you with a lot of dead stock.

4. Clean up your data to improve inventory planning processes

Data hygiene isn’t the coolest DTC trend, but it could save you millions of dollars (plus lots of embarrassment).

Take first attempt to expand into Canada back in 2014, for example.

It was the perfect storm of rushed land grab and inventory accuracy failures. Poor data hygiene caused a chain reaction of delays that led to warehouses full of Barbie Jeeps, empty store shelves, and an ultimate loss of $941m CAD.

To prevent over or under-ordering inventory, you need to know your minimum and maximum possible inventory levels.

How little can you have on hand while still meeting demand, and how much can you hold before you run out of space or cash? Your optimal inventory level is in between those numbers.

Next, to plan inventory well, you need your historical inventory data to be accurate for your forecasts to work. That input happens at the beginning of a product’s life, from the first time you assign it a SKU.

After all, your projections are only as accurate as the data you feed to them.

So, your best bet for accurate inventory level tracking is to use a SKU tool that can serve as a source of truth.

(网红黑料 integrates with top SKU tracking tools like Extensiv, Cin7 Omni, and ShipBob to deliver replenishment recommendations for you.)

By integrating these tools, you can create production orders that automatically include necessary products and quantities, outsourcing the toughest part of inventory planning to 网红黑料.

Best of all? You can sketch out your brand’s demand for the next 12 months, so you can stock up accordingly to meet this demand.

You can even leverage this demand plan to negotiate better vendor contract terms.

5. Invest in customer support

Your product is in high demand, your marketing is performing well, and customers can purchase your product through a variety of channels. Great!

But now, your operational backend needs to be ready to handle the deluge of demand. This inherently leads to a customer experience.

That said, things will sometimes go wrong, like shipping mixups, out-of-stock frustrations, and damaged packaging. All of which can put a damper on the customer experience. The more orders you fulfill, the more opportunities for these sours of mishaps.

So, when demand increases, you’ll need a strong, well-trained team to help customers quickly resolve any issues (and prevent them from happening again).

Customer support does a lot of heavy lifting to meet demand and retain those customers for the long haul. That’s why it’s important to ensure a seamless .

And a satisfactory, above-and-beyond interaction with your support team can turn a bad customer experience around.

(Extra points if you graciously or offer them !)

This thoughtfulness goes a long way in retaining your new customer.

“If you can meet expectations with what you’re promising, that’s already like more than 95% of brands,” Eli Weiss, Senior Director of CX & Retention at Jones Road Beauty, told us on The Checkout.

But if you can’t do that, the customer experience expert recommends building a reputation as the brand that will respond and care when things go wrong.

6. Align new products with customer demand

It’s tough enough accurately meet customer demand for a product you’ve carried for a while. It’s even harder for a new product with no historical sales data.

Building demand forecasts for new products without this information can feel even more like guesswork.

But it doesn’t have to be. 网红黑料’s new product planning feature builds accurate forecasts by comparing your new product to comparable existing products in your catalog.

Then, it uses historical trends for those products to predict how much inventory you should order to support your new launch.

But whenever you launch a new product, that new SKU has the potential to cannibalize similar SKUs in unforeseen ways.

So, factor that possibility into your marketing and merchandising strategy by promoting older SKUs soon after a new launch.

7. Use the right demand forecasting software and apps

Accurate forecasts are your top resource for meeting customer demand. You want the right inventory at the right time, with as few resources wasted as possible.

Without a forecast, how you order inventory is up to gut work and educated guesses. And not stocking out or over-ordering with this approach is nearly impossible.

Instead, inventory forecasting software like 网红黑料 can turn this into a science.

网红黑料 is an operations platform that empowers DTC brands to find signals in the noise and take smarter actions to reach operational excellence.

With 网红黑料, you can:

• Become more agile and thrive amidst a disrupted supply chain
• Radically improve your inventory forecasting and growth planning initiatives
• Get replenish alerts that always keep you at optimal stock levels
• Seamlessly sell on backorder when things go wrong
• Reach your most audacious revenue goals

But don’t just take our word for it 鈥� .