Pandemic shopping leads to unforeseen changes in the retailer landscape.
Can we foresee some of these changes?
The world has significantly changed due to Covid-19, living in a ‘not normal’ environment for quite some time. Today, we are still facing many challenges, not only in our personal lives but also in our shopping behavior. This has led to manufacturers that struggle with the rapid market evolution: how will the market evolve in the upcoming months? What strategic decisions do we need to make to cut costs and still be very productive?
Covid-19 has completely shifted the market with 360° degrees and has created a great scarcity in certain consumer goods such as IT products and home cooking appliances. In other sectors, we notice an oversupply in the market (e.g. fashion). Economists have predicted that the high demand for certain consumer goods cannot keep up with the current offer. Resulting in high transport costs (container) and a price increase of various materials such as wood, copper and aluminium. Container transport prices are currently in a storm. The corona measures are leading to lower activity in the port, while on the demanding side, e-commerce (even post lockdown) is on the rise. Manufacturers are struggling with the booming effect on their products and are questioning what the long-term effect of corona will be on e-commerce. Making an accurate demand forecast in these times is indispensable, but also quite a hassle looking at the many challenges that manufacturers must face. Our solution allows clients (manufacturers and retailers of durables/tech) evidence-based planning with objective, up-to-date and regular demand forecasts at the highest level of accuracy. Forecasting needs to be a continuous process to remain relevant and reflect on the latest market situation to extract seasonality, trends and momentum.
If we look again at the example of scarcity in home cooking appliances, we acknowledge that manufacturers could not foresee the huge boom in food preparation products. This has led to a stock shortage of those products in no time, but also raised the question of how long the increase was going to last (weeks, months, years)? Within the algorithms of the Demand Forecasting Overview, we can predict the upcoming trends based on the sales of the previous months. Looking at the huge boost of food preparation products in 2020 (+41% in value), the current forecasting trend is still marking an increase of sales for the total year of 2021 with +10% in value. Reason enough for manufacturers and retailers to still concentrate on this important category during the year.
The image below shows an example of our forecasting tool. This tool is easily accessible because of the interactive online dashboard.
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Article by Vanessa Theunissen.
Market Insights Senior Expert