Why Do Businesses Demand Forecast During the Festive Season?

Now that the festival is around there is an expected wave of demand for products at every store. Planning the products, the retailers are getting ready to block the shelves to increase their sales. 

Is this Enough to Run a Business?

Running a business is not just anyone’s cup of tea, especially when you are willing to grow, gain profit and flourish every season. Mere assumptions don’t work! You need to roll your eyes and foresee the future. You need to understand the kind of capital you need to invest, the number of products you need to produce, and the inventory units you need to keep up the stock. And able to answer,

  • What is your capital expenditure?
  • How much cash flow is required to make a profit?
  • What is your mitigation plan for the upcoming festival? 
  • What is your profit margin for this year?

Understanding your demand and forecasting your projections at a historical scale is important to predict the future and foresee the sales.

Well! The biggest challenge still lies in the shift of these projections for which you need to optimize your scale with time.

You need to understand how Demand Forecasting works in order to beat the challenge and make the right business decision. It is not hard to understand that demand is what is laid by the customer, and forecasting is the prediction that is done by the retailer to make supply decisions. But what’s hard is to get an accurate assumption of this demand with time and acquire the right amount of stock to meet the supply.

Demand Forecasting

Demand Forecasting is a progressive method that uses historical sales data to predict future sales figures. It is a comprehensive process that involves everything from planning, producing, inventory, warehousing to estimating, delivering, and logistics. It helps the businesses analyze the market potential and strategizes growth that is far away from any risk.  

For example, a store producing cake of different flavors refers to the last 12 months’ sales data and understands which flavor made high sales and in which season or occasion and based on the past sales he is able to forecast the shortage, make a plan and keep a stock. In comparison to the one that is new and is unaware of the flavors in demand, the prior store will always have the benefit of key sourcing.  

Steps to Forecast Demand for E-commerce

Although no one can be certain for the future, several techniques can help you with a detailed analysis and better business estimation. So, whether you are a small business or large, Demand Forecasting can help you draw the margins and understand that there is no business without demand and it needs to be processed with high accuracy.

Schedule Peak Period 

Depending on the season and festival the trend occurs anytime. There are many peak periods around the year when the sales are more in comparison to the other days. Viewing historical sales can reflect the important months where the sales dip or is good or discount should be offered to engage the customer or not.

Prepare Budget

Efficient financial decisions are important to reduce unnecessary expenses and expand the opportunities to choose a strategic investment. Keeping extra stock at a low sales period just wastes the resources and increases unnecessary budgeting. So pre-budgeting to enhance operational processes around forecasting demand is a must.  

Plan Production

Anticipating what customers want and keeping the stock helps channelize the offerings. Customers want what they want and acquire it when they want so your demand forecasting should be in sync with the market. Else you will lose the customer to your competitors and will take more time to engage the new.       

Optimize Inventory

Demand forecasting helps drive responses to harness analytical optimization and shape the inventory to reduce error over time. It helps you remain right at the place where you are, never under or over-stock. Your evaluated performance over time will increase the word of mouth and gain expansion in business.    

Strategize Development 

Demand Forecasting is a one-on-one task. The process requires testing, learning, and then developing a strategy to enhance sales. Closely analyzing the products and efficiently tracking the sales can help make the right strategies for development. Network balancing should also be taken care in order to constrain your business environment for a longer period of time.

Quick Tip – To avoid frequent stock out you need to keep a feedback loop and start your next forecast with updated allocations. 

Types of Demand Forecasting

The benefits of demand forecasting can be truly tasted once you are aware of your current position and have a clear idea of where you want to reach. There are different types of demand forecasting that can help you weigh your data and depict it over a period of time. They are broadly categorized into two:

On the Basis of Economy

Macro-level

This forecasting deals with the economic level demand that is measured by the national income and Index of Industrial Production (IIP) etc. It helps businesses understand the opportunities for their expansion and market shift.

Industry-level

This forecasting deals with Industry level demand for products as a whole, such as demand for cement, clothes, steel, pharmaceuticals in India, etc. It guides businesses with statistical data for trade under any policy.  

Firm-level

This forecasting deals with the product demand for a particular firm, such as demand for Raymond clothes, Birla cement, etc. It helps businesses improve the aggregate growth of products in the market.

On the Basis of Period

Short-term

If you are a new firm this forecasting is especially for you. It covers forecasts for a short period, generally from six months to a year and is most useful in making tactical decisions depending upon the nature of the industry you are in.

Long-term

This forecasting is for a longer period. Generally done by the old firms for the period of two to five years or more to help take major strategic decisions, such as the expansion of plants, opening a new unit, etc.

Major Demand Forecasting Models

To trail the influence and gather vital information of your business, simple and statistical methods are adopted which are classified under various models.

Market Research

It is a very generic research technique that is completely goal-oriented. It requires customer-specific surveys which are in the form of questionnaires, surveys, feedback, or opinion that are laid while purchasing a specific product. As this research is very random it should be taken care of in terms of location, geography, and demography. 

This method is mostly adopted when businesses are forecasting for low-demand products, as it gives a clear view of its sales in specific regions. 

Sales Opinion

It is a complete knowledge and experience based method that requires input from each salesperson of a particular region. The salesperson depicts data depending on the customer’s demand and evaluates the perspective that presents the final judgment. 

This method is more accurate as it relies on the perspective of the salesperson who in case of any error is held accountable.    

Delphi Technique

This Demand Forecasting is done by the panel of experts and facilitators that are appointed for a specific segment. The questionnaire is sent to the experts and a consensus scenario is attained after a few rounds of expression and discussion among the experts. 

The method is mostly adopted by big businesses to get the most accurate information from the experts. The only flaw lies is, time consumption. 

Econometric Technique

It utilizes a complicated mathematical equation to correlate influential factors with the demand. An equation is fine-tuned and the variables are inserted to generate an accurate forecast. It is mostly used to track economic factors of the current scenarios like the businesses that flourished in the pandemic or the businesses that flourished before pandemic. 

The data of this method is adopted only when the controlled conditions are applied by you. 

Barometric Technique

It is a unique method adopted to predict the future depending on the recording of the past and deploying the statistical analysis on the series of economic indicators like leading, lagging, or concurrent. The leading shows the market activity that is ahead, lagging that change after a short time and the concurrency that varies according to the economic activity.

This method gives you the complete range of information where your business lies and where you can take it. 

Trend Projection

It is a method that deploys historical data of around 20 to 25 months to project the demand scale by graphical or square method and forecast the specific product. The most granular level of growth can be attained by examining the date and time of the order, revenue or return. Depending on the data you can adjust your inventory and evaluate your business.   

Quick Tip – In a competitive scenario as today, if you are not forecasting the demand, you are losing a lot, not only in terms of staff, production and sales but also in terms of efficiency and profit. A good forecast provides appropriate planning, selection, layout and management that lead to profitable business.

With the market shifting so drastically it becomes difficult to track the customer demand and meet its expectations. Demand Forecasting helps you channelize your work and make a record so that you are able to make decisions, launch products, plan inventory and optimize the supply chain as per the demand. 

Connect with ANS Commerce

At ANS Commerce, we help brands build their business and take it to the level where they imagine. From brand building to demand management ANS works on everything to help you increase sales. You can also rely on us for inventory optimization, performance marketing, and warehousing to improve your conversion rate instantly. 

Get connected and request your free DEMO now! 

How Porter’s Five Forces Help in E-commerce Business Analysis?

Porter’s Five Forces

Porter’s Five Forces analysis is a framework for assessing the level of competition within a certain industry. This model is useful for evaluating an industry’s weaknesses and strengths by identifying and analyzing five competitive forces that shape every industry.

According to this framework, competitiveness does not come solely from competitors. Instead, the state of competition in a given industry is determined by five fundamental forces:

  1. Competitive rivalry
  2. Threat of new entrants
  3. Bargaining power of customer
  4. Bargaining power of supplier
  5. Threat of substitute products

Understanding Porter’s Five Forces and how they apply to a particular industry can help a brand adjust its business strategy accordingly. For example, you could take full advantage of a strong market position or strengthen a weak one, all while avoiding future mistakes.

SWOT Analysis Vs. Porter’s Five Forces

Both Porter’s five forces and SWOT analysis are analytical techniques used by brands to make strategic business decisions. 

Although both of these models define a brand’s position in the market, the key difference is that the five forces model focuses on external factors, whereas SWOT analysis is more focused on the internal conditions of the organization.

Quick Tip – When taken in conjunction with a SWOT analysis, Porter’s Five Forces can help you understand where your brand or business fits into the industry landscape.  

To read further about how to conduct a SWOT Analysis you can read this article

Understanding Porter’s Five Forces

Competitive Rivalry

The number of competitors and their ability to undercut a brand comes under the first of the five forces. Higher the competition in an industry, the lesser the power of the brand. If a brand’s competition offers better deals or lower product prices, suppliers and buyers seek them out.

Conversely, when the competition is low in an industry, a brand has more power to charge higher prices and set the terms of deals to increase sales and profits.

For example, In the e-commerce industry, competition among major players is very high, as there is no switching cost for customers. The players are constantly competing on the basis of price and factors that influence buyers’ choices such as quick delivery, discounts, and offers, variety, customer service, and much more. 

The Threat of New Entrants

It is not only existing rivals that pose a threat to firms in an industry; the possibility of new entries in the industry also affects competition. The less time and money a brand’s competitor takes to enter the market and become viable, the more vulnerable an established brand’s position becomes. 

The severity of this threat is determined by the entry barriers into a particular industry. The greater these barriers to entry, the lower the threat for existing players.

For example, The threat of new entrants in the e-commerce industry is high, as there is very little cost involved in setting up an e-commerce website.

Bargaining Power of Customers

The ability of customers to drive prices down or their level of bargaining power is one of the five forces. Customers have a lot of power when there aren’t many of them and they have a multitude of choices to buy from. Moreover, switching from one company to another should be easy for them.

However, buying power is low when customers purchase products in small amounts, act independently and when the seller’s product is very different from its competitors.

For example, the Bargaining power of customers is very high as there are many players in the market with similar products and there is no switching cost. Buyers prefer the brand that offers the best price among other factors such as product quality and delivery time.

Bargaining Power of Suppliers

This force examines how much power and control a brand’s supplier has over the ability to raise prices or lower the quality of purchased goods or services, which in turn would lower an industry’s profitability potential.

The important factors that determine supplier power are the availability of substitute suppliers and the concentration of suppliers. When a company has a large number of suppliers, it is in a better position.

For example, the bargaining power of suppliers is low as there are many suppliers in the market, and therefore the e-commerce brands have the power to choose their suppliers.

The Threat of Substitute Products or Services

The Threat of Substitutes formulates the fifth and final force. This force investigates how easy it is for customers to switch from a brand’s product or service to another. 

It looks at the number of competitors, how their prices and quality compare to the business under consideration, and how much profit those competitors make, in order to see if they can cut costs even further. Switching costs, both immediate and long-term, as well as consumers’ willingness to change, inform the threat of substitutes.

For example, the threat of substitutes is very high as there are a lot of sellers with similar products and services, and there is no switching cost for customers.

It is not mandatory for e-commerce brands to conduct a Porter Five Forces analysis, but it is clear that it aids in the future of the business. It will point your business team in the right direction by minimizing threats and weaknesses while maximizing strengths.

How Can ANS Commerce Help You?

When it comes to running an e-commerce business, there are multiple obstacles to overcome. At ANS Commerce, we provide full-stack e-commerce solutions to our clients so that they can focus on their brand and product rather than worrying about the challenges in the industry.

To connect with our team of professionals, you can request your free DEMO today. 

Key Takeaways

  • Porter’s Five Forces is a framework for analyzing the competitive environment of a brand in a specific industry
  • A brand’s profitability is influenced by the number and power of its competitive rivals, potential new market entrants, suppliers, customers, and substitute products
  • To gain a competitive advantage, a Five Forces analysis can be used to guide business strategy

Your Business Needs Customer Reviews And Ratings! Here’s Why And How?

Imagine this; you want to buy a pair of earrings from a new online store. Unfortunately, their intriguing designs don’t sync with the reviews and ratings on their product page. So, you change your mind and decide to purchase from another reputed online brandstore.

Customers have become quite informed about where they can get the best products. They consistently scrutinize the aspects of reliability whenever they plan to buy something online. Apart from discounts & offers, customer’s reviews and ratings have become the major role players to boost online sales. From enhancing a brand’s loyalty to generating new leads, product reviews and ratings are quite the game-changer. This is why businesses are focusing on reputation management more than ever.

If you’ve been doing everything to get those leads but are still lacking behind, here’s why you need customer’s reviews and ratings right now!

5 Reasons Why Your Brand Need Customer Reviews and Ratings

1. Improves credibility and works as a social proof

Trust is one of the major factors that drives your sales and helps you achieve long-term growth. Unlike the brick and mortar store, customers can’t touch and sense products when they decide to shop online. Their dilemma takes a halt when they see positive reviews on your product page. When they feel that your brand is credible and trustworthy, they automatically make-up their mind to purchase from you. 

“Customer reviews and ratings showcase your brand’s USP and make you stand out in the market of perfect competition.”

2. Aids you in finding out the weaknesses and strengths of your business

A review not only boosts your reputation in the market but also helps you find out the faults in your products and services. Has your product packaging left your customers unsatisfied or was it because of your poor customer service? You get the answer to all the questions through reviews and ratings. Not just the weakness, through customer reviews, you can keep a check on the strengths of your business and make the most of it. For example, if your customers commend the packaging of your products then you can take this as an advantage and try to highlight it in your advertising as much as possible. 

Quick tip: Kick-start this festive week with our full-stack e-commerce solutions made for you. To know more, you can request a free demo!

3. Provides in-depth information to your potential customers

Your loyal customers work as your brand advocates and write real information about your brand. This information gives your potential customers a virtual experience of your product and makes them understand your brand in a better manner. For instance, you run a business where you manufacture Apple cider vinegar. Now, the brand advocate of your business wouldn’t just write good facts but also tells the customers about how and when they can consume it to get the best results. This in-depth information persuades your prospects to move a step further in the sales funnel. 

4. Helps you to fight with big and established brands

It’s difficult to withstand strong competition especially when it comes from an already established brand. Customers only prefer a new brand after they scrutinize the features of the product through product reviews and social media presence. And that’s how your product reviews can help you win the race.

“A good brand reputation is a psychological phenomenon that automatically influences your customer base to choose you over your competitors.”

5. Boosts your page rank

A review is indeed one of the most eminent factors to get a high rank in local research. Product pages generally include keywords such as the name of the product, brand, city, etc. These keywords make Google discover your brand and your products, making it to rank high in organic research.

Now that we have discovered the importance and usefulness of reviews & ratings, let’s dive deeper into it and learn how you can actually achieve it!

5 Ways How You Can Get Customer Reviews & Ratings

1. Examine the right time to generate social proof

You must plan and strategize the moment when you’re going to address your customer to review your offering. Timing plays an important role here. If your timing is wrong, your planned strategy can backfire on you. You can aim the customers at some specific moments so that they review your products and services.

Quick Tip: Below are some of the best moments when you can address your audiences to review your offerings! After they order or reorder your product After they tag you on their social mediaWhen they spend more than five minutes on your website/app

2. Engage with your customer base

Engagement is the key to fuel your e-commerce business. If you want your customers to become your brand advocates then you must strategize an action plan to engage with them. Engagement marketing is the right term that you must strive to achieve. Understand the needs of your users and interact with them accordingly. 

“ You can enhance a relationship with your user by posting resourceful and meaningful content.”  

3. Respond promptly to all the reviews and suggestions

Examine your product reviews carefully and don’t forget to address each and every comment. Thank your customers for writing a review with a soft tone. For a negative review, you can simply apologize to your customers with an explanatory reason. It makes them feel heard and they can reckon upon trusting you again.

Quick tip: If you’re having a hard time maintaining the hygiene of your brandstore then you can swear by our e-commerce solutions. ANS Commerce strives to enhance customer relationships on various marketplaces such as Flipkart, Myntra, Amazon, etc. Book a free demo session NOW!

4. Start with a customer loyalty program

To improve your online reputation, you can vouch for customer loyalty programs. You can encourage your customers by giving them coins or credit points that’ll benefit them on their next purchase. 

Quick tip: With more than 50+ third-party integrations, Kartify – our tech brandstore is pre-integrated with various loyalty programs. Get your hands on it and explore what’s best for your customers. 

“Additionally, you can also start with a lucky draw, where they can get a chance to win a certain amount of prize.”

5. Launch your product review pop-up with an interactive and open-ended question

Don’t just ask your customer to review your products and services with a straight-forward statement rather start in a conversational manner. Ask them first if they like your products/services. If they say yes, ask what they like the most, if they say no, apologize and drop another question for a reason for their dislike. In the end, drop a pop-up with “reviews us”. This way you can both get the feedback and the product review. 

How to do it?

If you want to have a good brand reputation but don’t know how to begin, here’s a reason why you need to request a free demo RIGHT NOW! From maintaining your account at various marketplaces to managing your brandstore, ANS Commerce is your one-stop solution.

We are a full-stack e-commerce enabler and aiming to improve your customer relations across all the channels. Our services ensure customer delight and drive your brand’s visibility by answering your customer’s queries to ensure positive product reviews and ratings. So get your hands on our e-commerce solution now!We understand that getting reviews from customers is not an easy task to achieve, but a lot can change with a few positive comments. So make an action plan and accelerate your business growth TODAY!

Simplifying E-commerce for India – Vibhor Sahare in conversation with Vishal Krishna

Vishal Krishna, a Business Editor at YourStory, held a live session on the 5th of September 2020 with Vibhor Sahare, CEO and Co-founder of ANS Commerce, discussing about brand revolution in India and how ANS Commerce is helping 90+ brands scale up with its full-stack solution offering borrow 500 online.

Titled “Simplifying E-commerce for India”, the event attracted a plethora of speakers, industry experts, emerging startups, and attendees from across the country and abroad. The discussion started with how ANS Commerce is helping brands enter the world of online commerce, whether they are established or DTCs (direct-to-consumer) brands. Vibhor shared some of his insights on the retail e-commerce market of India and online penetration. Identifying e-commerce as not being a core competency of these brands, he explained why a full-stack e-commerce solution is what brands need in order to focus on their core product. You can request for our full-stack demo.

Vishal Krishna follows this up with the concerns and issues faced by the e-commerce industry in today’s world, with respect to choosing the right e-commerce platform, digital marketing, paid ads, promotions, coupons, optimization of product, warehousing, marketplace management etc.

 

 

 

 

 

 

 

 

 

Here’re are some of the key highlights from the session –

How does Kartify help with performance marketing of a brandstore?

The majority (~80%) of traffic on brandstores comes from paid marketing campaigns, which can range from 0.1x to 1.0x of sales. Hence optimizing ROAS (return on ad spends) and maintaining ROAS at scale become critical to brands’ e-commerce viability. For this, brands prefer Kartify’s marketing-first perspective, to improve ROAS and maintain it at scale. Brands often leverage ANS Commerce for both solutions. Brands generally start with performance marketing followed by website management to further boost sales.

Does ANS Commerce have any client preference in terms of sectors or segments?

ANS Commerce is sector agnostic and keen to work with brands in all categories – whether it is retail, beauty, home, fashion, electronics, etc. We work with brands big and small, ranging from Fortune 500 giants to DTCs still completing their company paperwork.

Does ANS Commerce have any plans of going international?

ANS Commerce believes India is a fairly large and growing market for consumer brands, and so is completely focused on Indian market for the next 2-3 years.  However, we have few international clients and lot of inbound interest from SEA, MENA and European markets so we are open to expand globally at the right time.

What is ANS Commerce’s revenue model?

ANS Commerce works on the revenue sharing model. Instead of charging a fixed amount every month for the product or service, they charge a percentage of revenue (sales) in most of the cases. ANS Commerce believes in being a true partner for their clients – aligned with common objective and have confidence in their ability to deliver.

What are the various third-party integrations available in ANS Commerce?

ANS Commerce has its own custom products such as Kartify, LimeReach, Recofy etc. and these come with enhancements to ease out the complexities of e-commerce processes. Additionally, clients can also get the benefit of over 70 (and growing) third party integrations relevant for Indian brands. They span across domains such as logistics (Delhivery, Blue Dart), payments (Razorpay, Paypal) OMS/ omni-channel (Fynd, Unicommerce), loyalty, tech, marketing (Netcore, MailChimp, Freshdesk) etc.

How does ANS Commerce help in overcoming the challenges of warehousing and fulfilment?

Brands want to provide the same ease and speed of delivery for their brandstores as is the norm on marketplaces across India. ANS Commerce optimizes warehouse operations with the help of latest tools and softwares, which includes Warehouse management systems, Order management system etc. They have also partnered with the logistic companies such as Delhivery, BlueDart and Ecom Express to handle the delivery logistics. This enables brand to offer 2-day delivery with tracking for their brandstore orders and optimization of inventory using common pool for all the marketplaces. We work with 15+ marketplaces to enable brands’ presence across long-tail marketplaces. Request your demo for warehousing solution.

How can ANS Commerce help companies operating on Shopify?

ANS Commerce can help these brands to acquire more customers with their performance marketing expertise and can also help them with warehousing and fulfillment.

The session concluded with an extremely interactive and enthusiastic Q&A session. The entire session can be viewed on our YouTube channel.

About ANS Commerce

ANS Commerce is India’s #1 full-stack enabler helping brands sell online. We offer brandstore tech, performance marketing, marketplace management and e-commerce warehousing & fulfilment.

We want our brand partners to focus on their brand and product and leave ‘all-things-e-commerce’ to us. We are currently working with 90+ established & D2C brands across segments helping them sell on their brandstores alongwith 15+ marketplaces.

We help brands acquire consumers, power brandstore and jumpstart marketplace operations in no time. With us, your brand can offer fast & reliable order fulfilment to your marketplace & brandstore consumers.

Our extensive experience across product, e-commerce, retail, and marketing helps the brand achieve higher sales and stronger brand differentiation. We work with you to identify the right e-commerce model & partners for you.

If you are a brand planning to go online or need any e-commerce assistance, then drop us an email on [email protected]. We are currently offering free marketing audit!

For more information about our offerings, visit our website.