What are the most common mistakes in forecasting seasonal product sales?

2 Ignoring seasonality and cyclicity

Seasonality and cyclicity refer to the predictable variations in demand and supply that occur over time, such as monthly, quarterly, or yearly cycles. For example, demand for swimwear may peak in summer, while demand for coats may peak in winter. Ignoring these factors can lead to inaccurate forecasts and inventory issues. To avoid this mistake, you need to identify and analyze the seasonal and cyclical patterns of your products, and use appropriate methods and models to account for them in your forecasts. You also need to consider the effects of external events, such as holidays, festivals, or promotions, that may influence seasonality and cyclicity.

3 Using a single method or model

There is no one-size-fits-all method or model for forecasting seasonal product sales. Different products, markets, and situations may require different approaches and techniques. Using a single method or model can limit your perspective and accuracy, and make you vulnerable to errors and biases. To avoid this mistake, you need to explore and compare different methods and models, such as qualitative, quantitative, or hybrid methods, and simple, complex, or advanced models. You also need to evaluate and validate your forecasts using various criteria and metrics, such as accuracy, reliability, and simplicity.

4 Overlooking product life cycle and assortment

Product life cycle and assortment refer to the stages and categories of your products, and how they affect their demand and supply. For example, new products may have higher demand and lower supply than mature products, while core products may have more stable demand and supply than fashion products. Overlooking these factors can lead to unrealistic or inconsistent forecasts and inventory problems. To avoid this mistake, you need to understand and segment your products based on their life cycle and assortment, and use different strategies and tactics for each segment. You also need to consider the interactions and correlations between your products, such as complementarity, substitutability, or cannibalization.

5 Neglecting risk and uncertainty

Risk and uncertainty refer to the possibility and impact of unexpected events or outcomes that may affect your forecasts and inventory. For example, a supplier shortage, a quality issue, or a customer complaint can disrupt your plans and operations. Neglecting these factors can lead to overconfidence or underpreparedness, and result in losses or missed opportunities. To avoid this mistake, you need to identify and assess the potential risks and uncertainties that may affect your forecasts and inventory, and use appropriate tools and techniques to measure and manage them. You also need to create contingency plans and scenarios, and test and update them regularly.