5 Tips on How to Prepare for a Decreased Demand
Regardless of whether you run a brick-and-mortar store or sell your services, you’re probably well aware of the fact that consumer spending patterns fluctuate over the course of the year. Historically the biggest spending season falls between November 1st and December 31st—think of Thanksgiving, Black Friday, Christmas and New Year’s Eve all stacked right next to each other. The period right after the holidays then sees decreased demand, as wallets recover from the spending spree.
Another peak arises in the spring, stretching from Valentine's Day through Presidents Day and Easter. Of course, there are plenty of other factors that can cause decreased demand periods for non-seasonal products, such as economic shifts and weather.
Despite demand fluctuations happening every year, many businesses still struggle to make accurate predictions for these peaks and valleys. But just because business is slower, it doesn’t mean you should kick back and wait for an upturn. How can you turn periods of decreased demand into a strategic marketing opportunity for your company?
1. Improve Demand Forecasting
Consumer trends and behaviors have changed significantly in the past few years. As more people studied and worked from home, commuted less and turned to in-home entertainment instead of going out, the types of goods they required changed. The pandemic also resulted in a new level of brand switching. Research from McKinsey found that 30-40% of consumers tried new brands during the Covid-19 pandemic. Almost half of these incidences were a result of their regular, preferred product choice’s unavailability; however, 12% of these consumers say that they will continue to purchase the new product post-pandemic.
This in turn has made it important for businesses to adopt new demand forecasting practices as poor demand forecasting can cost a company both money and reputation. When consumers cannot find what they want, they will go somewhere else.
Recognizing trends around a few high-profit items may not be hard. But tracking granular demand trend data and forecasting for hundreds or thousands of items is near impossible to do manually. Thankfully, we now have a range of advanced forecasting tools to save the day, making it easy to capture and translate trend insights regardless of inventory size or complexity.
A smart forecasting tool uses past and current market data to determine product demand patterns. Certain products’ popularity follow seasonal holiday swings, while others stay steady throughout the year. While you might be able to pull a few months’ data manually, only a system that can track deeper, years-long analytics and trends can predict seasonal demand swings precisely.
2. Identify Seasonal Demand Periods
Forecasting for seasonal fluctuation ensures that stocks remain at necessary levels to meet demand at all times. Considering the complexity of global networks today, though, traditional methods are less useful than they once might have been. When your supplies and your market both span the globe, it’s hard to predict exactly what will be available when and where.
Effectively forecasting stock means identifying seasonal effects year on year and analyzing repeated patterns across your entire network. But you need to widen the data collection beyond just that. Businesses should also consider the reason for variance, the onset of increasing demands and the size of demand peaks. Tracking previous forecast errors may also shed light on previous years' misjudgments and help you adjust stock safety levels more strategically.
3. Implement Better Inventory Management
Inventory control is critical for business success. Obviously, properly identifying and stocking products that are in demand allows businesses to increase their revenue. But stock shortages have wider repercussions as well. For example, repair technicians and parts replacement companies across a variety of industries need the right parts and tools to ensure smooth running operations—they rely on stocked manufacturers. Online vendors also fall prey to the inventory question. If, say, a t-shirt printing eCommerce store orders their shirts from a manufacturer, the printing shop’s shipping times could languish in delay if there’s a hiccup in supply.
Considering how important inventory management is down the whole chain, it’s crucial that you set in place proper management flows. Folding all of your supply chain and order-to-sales management processes into a single system provides a holistic view of inventory movement and simplifies tracking. An automated inventory management system can help reduce error and increase efficiency, while also freeing up staff for more productive work.
4. Revamp Your Sales and Marketing Plans
Sales and marketing plans aren’t one and done. They need constant refining in order to stay current. Adjust your sales and marketing plans in relation to increased or decreased demand in order to avoid loss and stale stock. Sales and engagement analytics can assist in tracking these historical and predictive trends—giving you the knowledge with which to confidently re-strategize as needed.
This data should inform all of your marketing strategies, including catalog organization, layout, promotions and social campaigns. This data can also provide key demographic data that can inform a shift or possible market expansion. For example, perhaps your problem isn’t a seasonal dip at all; it may just be a misalignment of customers. Or perhaps there is another customer base you can tap into for different reasons during your traditional slow season. Pooling all this data into a single, easy-to-access resource allows your team to build a comprehensive strategy that makes the most of every customer interaction.
5. Cross-Train Your Staff
Many businesses counter seasonal changes by outsourcing staff. While on its face this may seem like an easy way to cut costs, outsourcing can quickly turn into a continuous, time-consuming and tedious training cycle.
Instead of constantly investing resources in staff and then cutting them loose, consider cross-training the team you do have. When your team members can confidently serve in multiple roles, anyone can jump in if someone gets sick or leaves, or if demand rises in certain areas. Employees become greater assets while gaining knowledge that benefits their careers and broadens their horizons. Meanwhile, the company can rest easy knowing they have an extraordinarily capable team ready to go.
Ensure Your Sales Team Is Always Ready
Fluctuations of increased and decreased demand are inevitable. Leveraging these swings to serve as new opportunities, however, requires strategic solutions and forethought. Implementing analytic data in your marketing strategy can help.
Ingage offers a versatile solution to modernize sales processes, enhance cross-training, collect and analyze data and integrate interactive presentations to optimize engagement and sales. The wide suite of tools can help your team build comprehensive solutions to minimize the effects of decreased demand, target new audiences and launch new campaigns.
Integrating innovative tools like Ingage into your business can set your business apart from the competition. Ingage can synchronize your workflows, bolster your analytics, and wow your clients with riveting presentations. What are you waiting for? Schedule a free demo to see how Ingage can level up your sales and marketing strategies today.