Can you successfully use web push notifications— your additional sales channel— when sales forecasting for your Shopify store?
Surprisingly, you absolutely can!
By understanding your sales and how your inventory moves, you can use web push notifications to level up your eCommerce store. Do you already use web push notifications and want to maximize its success? Let’s look at how sales forecasting can make your store management even more efficient, save you time and free up money to invest back into your business!
What Is Sales Forecasting?
Simply put, sales forecasting is when you plan your inventory to meet customer demand so that you have the relevant products in stock during the right seasons.
Sales forecasting consider a few key metrics to keep their inventory in check:
- Sales velocity: Sales divided by the number of days a product is in stock
- Seasonality: Know when items sell the best
- Sales trends: Understand if demand is steady or increasing in recent months
Note: Stockouts (out-of-stock days) are excluded from sales forecasting. To forecast demand, we want to know how much of an item was purchased by customers when it was available. We exclude stockouts to accurately isolate past demand. If you don’t exclude stockouts, your future sales would be underestimated.
Why Should I Bother with Sales Forecasting?
Sales forecasting helps calculate replenishment, which is the lifeblood of any eCommerce site. For instance, if you don’t reorder stock in a timely fashion, you could have a stockout. And if you are out of stock, you are missing out on revenue.
Are you overstocked on a particular item? Use sales forecasting to see if you are overstock and if so, by how much. You can clear out that inventory and use the cash generated elsewhere in your business.
Think about the ramifications of running out of stock while running a Pay Per Click (PPC) advertisement. If you have a PPC campaign with a particular product in your Shopify store but it’s going to have a stockout, you can use forecasting to know when you are going to be out of stock. You don’t want to pay to drive traffic to a product that you can’t actually sell people!
How Forecasting Can Work with Push Notifications
If you are using PushOwl, you already know what effects web push notifications have on your Shopify store. Here is how sales forecasting can be a game-changer with your store:
1. Anticipate stockouts
Anticipate products that may run out of stock before your inventory comes in, You can do this by looking at your key metrics: sales velocity, stock on hand, and lead time (how long it takes to get items back in stock). If you anticipate stockouts, use push notifications to shift attention to other products instead of driving customers away. Steer your traffic to relevant parts of your store by promoting new products so you can take advantage of the traffic coming to your site. This can help you to avoid a high bounce rate, and improve your conversion rate.
2. Notify customers when they will be back in stock
Are you going to run out of inventory? What is the lead time, and how long will you be out of stock? You can forecast when items will be back in your warehouse. To avoid losing sales, you can set up ‘Back in Stock Alerts’ and let your customers know right away when their favorite item is back in stock. This will let you steer relevant traffic to your products once it is back in stock.
3. Coordinate promotions
Your marketing department is in sync with your inventory updates and stays informed about products that are in stock and those that are running out. By staying informed about your inventory stock, you can send relevant push campaigns and avoid promoting products that are out of stock.
Your inventory manager must be informed of your lead time so that you can start to order more stock at the appropriate time. For example, by knowing that there are more sales season in August and September, you can start ordering school items to ensure you are well-stocked up for the big sale You also won’t order more backpacks in April if there is a 21-day lead time. This means you’re not tying up too much cash in too much stock ahead of time.
Coordinate across all parts of your company so that you can forecast sales and plan inventory and marketing ahead of time and meet customer demand.
4. Remove Overstock
Just as you don’t want to miss out on lost sales, you also don’t want inventory sitting on your shelves. Poorly performing inventory is the same as letting your capital turn into losses. If you have excess inventory, it is ideal to move inventory out so you can use the cash elsewhere in your business. Think about how you can use strategies like upsell or bundle your overstock items so that it can be cleared out faster. You can set up price drop promotions with web push notifications for this inventory so that you can sell them faster.
Sales forecasting is not an exact science, but by understanding key metrics— sales velocity, seasonality, and sales trends— you can contribute to a well-maintained inventory and a well-strategized marketing plan.
Moreover, by staying informed about your sales forecasts, you can use push notifications to anticipate stockouts, tell your customers when items are back in stock, cross-reference with your promotions, and sell your overstock.
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This post is contributed by Jill Liliedahl of Inventory Planner, an app that helps online stores creating effective inventory plans.