White Papers: Store Clustering for Demand Forecasting

Don't have any history on the new SKU and need to introduce it into the market?

Decisions at this stage of the SKU's life cycle will determine success or failure. For many retailers, the answer is to introduce a market test at a subset of stores to gauge performance before releasing to the entire chain. But, how can you be sure that the best stores were selected for the test. How much product must be placed in those stores to ensure accurate results? Exactly how do the test results reflect the chain wide performance of the new products?

Testing correctly is critical to profitability.

• We identify the ideal stores in which to perform the test by analyzing the performance and behavior of similar products across a retail chain.
• We also cluster stores based on sales mix and demographic data to more accurately assort and allocate SKU's.
• We allow retailers to effectively test new products and ultimately order the appropriate quantities of product in their initial buy, optimizing sales for the season, while maximizing the exposure the to over-stocking and closeout expense.
• Finally, we generate a base line forecast for the new products in the test stores, which is used at the conclusion of the test, to compare the against the actual test results, to generate a forecast of the products performance across the entire chain for the season.

Don't have any history on the new SKU and need to introduce it into the market? We can give you insights. Just give us your raw data.



Challenges:

Related Topics: Consumer Segmentation Customer Churn Analysis Demand Forecasting - Challenges Demand Planning Key Driver Analysis

Order too little and risk stock out, order too much and wipe out profits with mark downs.

Market Equations allows you to identify the decrease in lost sales while also being able to reduce your inventory levels. The ability to offer your customers a broad and deep selection of quality merchandise at exceptional value and ensure that they can find what they want, when they want it - requires a sophisticated supply chain management approach.

We feed the point of sales data into proprietary software to forecast, plan and replenish more accurately at each store. We forecast and plan inventor stock levels representing a wide variety of products with varying degrees of demand and impacted by such variables as seasonality and promotions. We also help retailers plan new product introductions and rollouts as the retailer pursues its growth strategies based on aggressive expansion into new market segments.

Use the right store clustering strategy. Write to Us