eCommerce Inventory Forecasting - The Right Approach for 2024

What is eCommerce Inventory Forecasting?

eCommerce inventory forecasting is a strategic process used by online brands to predict the future demand for their products.

By projecting inventory needs for the next five years, companies aim to maintain readiness for both expansion and promotional activities.

So by analysing historical sales data, market trends, and consumer behaviour, businesses can easily estimate the optimal amount of stock to maintain.

This process ensures that they meet customer demand without overstocking, thus minimising holding costs and maximising profitability.

The essence of forecasting lies in its ability to transform raw data into actionable insights, enabling eCommerce businesses to make data-driven decisions about stock levels, product assortments, and purchasing strategies.

eCommerce forecasting is similar to charting a course through the unpredictable seas of market demand.

First of all businesses have to start by gathering and analysing relevant data, including past sales figures, seasonal trends, and market conditions.

‍
Retailers should start collecting and leveraging both quantitative and qualitative data to form a comprehensive view of future demand.

The approach combines statistical methods with market analysis, considering promotions, new product launches, major marketing campaigns such as Black Friday & Cyber Monday and seasonality factors that could impact demand.

We have also covered a mini walkthrough on how you can do an in-depth inventory forecasting for your business in 2024. 

An Excel template for eCommerce forecasting provides a structured framework to organise your data and predictions.

Excel templates mostly include sections for historical sales data, growth projections, and seasonal adjustments. By inputting your data, you can leverage built-in formulas to forecast future demand at various intervals.

In 2024, we believe it's high time for Shopify D2C brands to ditch spreadsheets and go for a cloud-based solution.

At Prediko, we offer a 14-day Free Trial so you can first try out the platform without ditching your spreadsheets or excel. Compare the ease of doing an accurate forecast in a software vs running it daily yourself in an excel.

Here is a short case study on how Sync Protein, a popular 100% plant based nutrition brand, completely did away with their old way of forecasting through manual process and signed up for Prediko to forecast their sales and quantity.

They wanted to avoid the need for constant data reconciliation, and that’s why they ditched Excel and signed up for Prediko.
See how our forecasting helped them avoid frequent out-of-stock and overstock situation👇

eCommerce Forecasting Tools & Software

Recently, a lot of tools and software have just flooded the eCommerce world to help with forecasting. 

We’ll share a couple of amazing tools out there but we wanted to first highlight why Prediko is best suited to solve inventory forecasting problem for brands of all sizes

1. Input sales for your next 6 or 12 months and get your forecasted inventory requirements
2. Buying Table that keeps you on top of your inventory count so you are aware which products are in stock out, which products do you need to reorder and which products are off the plan
3. As a business owner, you get the full picture about how many days of inventory is left.

We understand it takes time, effort and important fit to find the right inventory forecasting tool. That's why we have created this list on the best available inventory forecasting software in the market in 2024

Role of AI in Enhancing eCommerce Forecasting

Artificial Intelligence (AI) has changed the way eCommerce businesses operate. That’s why it was high time an app introduced the right AI model to predict demand and manage inventory.

It is one of the factors behind the start of Prediko’s AI inventory management app.

By using the power of Prediko’s AI, retailers can analyse vast datasets more accurately and identify patterns and trends that human analysts might overlook.

Our algorithm has been trained on 25 million+ SKUs from 15+ industries. That's why we are able to forecast demand at a granular level, considering factors like promotional activities, mega marketing events such as Black Friday / Cyber Monday, seasonal variations, and even social media trends.

A popular UK-based healthy living and self care brand, Healf, saw a “strong correlation between using Prediko and their out of stock percentage going down.

They signed up for Prediko at the start of 2024. Their goal was to keep their inventory ready for the rest of the year. See how other brands have benefited from our AI inventory management shopify app

How is Prediko able to quickly generate a forecast for a Shopify store?

Prediko integrates in just 1-click with Shopify and takes into consideration historic sales data from your Shopify admin. Prediko also integrates with warehouse management solutions, and shipping apps such ShipHero and many more.

Other apps and software that help with inventory forecasting are

• Inventory Planner: Offers demand forecasting and inventory optimization for your sales.
• Cogsy: Focuses on inventory planning and replenishment to ensure you're stocked.
• Fabrikator: Combines inventory management with forecasting to optimise stock levels
• DemandCaster: Provides supply chain planning, including demand forecasting and inventory optimization.

We have covered an entire list of top inventory forecasting tools, apps and software - Some of them are also present on the Shopify App store

Each tool has its unique features and benefits, catering to different business sizes and needs. Evaluate them based on your specific needs and budget.

Here is how you can setup cart limits for your inventory

So how do you start with eCommerce Inventory forecasting

eCommerce inventory forecasting is not just about predicting numbers; it's about creating a roadmap for sustainable growth and efficiency.

As brands and businesses grow, it’s important to align the inventory requirements with market demand, current and future sales numbers and projections.

If you are a D2C brand on Shopify and are looking for the right inventory forecast for your eCommerce business, then just feel free to drop us a message or book a free demo of Prediko.