9-MINUTE READ · By Misty Faucheux
For anyone who has to maintain inventory, you know the seriousness of keeping it accurate. During high times, you don’t want to run out. The inverse of that, however, is that during your slower times, extra inventory could be weighing down on your profits. This is why it’s of the utmost importance to ensure that you always have the right amount of inventory throughout the year.
Historical data is perhaps the best way to make sure that you always have the exact amount of products that you need. Since its release, Google Data Studio has been a great tool for visually reviewing your data, and it’s perfect for this task.
Leveraging Data Studio for Forecasting
The first item on your to-do list if you plan on using Data Studio for forecasting is to verify that Ecommerce reporting is set up. This report provides you with everything from historical sales data, click throughs, cart abandonment, product information, SKU and more.
Next, you must make sure that AdWords and any other sales platform that you’re using is connected to Data Studio. Supermetrics Data Studio Community Connectors allow you to add data sources from third-party sites, including Adobe Analytics, AdRoll and Google Analytics– to name a few. While some of these may require fees to use, the benefits that you’ll get from getting aggregate data will be worth the investment.
You can now aggregate data into a single report by the product SKU number. You can filter data by using the Filter options located in the bottom right of the Data tab.
Navigate to the Data pane, and select “Add New Filter”. You can add between one to five SKUs to the filter, which can you review in the report. But, if you’re blending different data channels, it might make sense to create a report for each product. Some products may do better at different times of year, but you might not be able to tell that if you pull all the data into a single report.
For What Should You Be Looking?
Now, that you have your report set up, and it’s collecting data, you might want to know for what you should be looking. The first place to start is to create a report that reviews the entire year and compare it to the previous year’s data. In this view, you can see sales highs and lows throughout every quarter or season.
Keep your eyes peeled for patterns. Are there certain times of year where sales peaked? For example, many retailers will see sales skyrocket from November through right after the end of the year when people are shopping gifts. But, are there other times of the year that are also as busy?
Also, make note of when sales are at their lowest. During this time period, you should look at clicks and impressions as well. Perhaps, during these months, your customers are doing more research than sales.
If these patterns play out over several years, then you have a trend, which you can use to increase or decrease on-site inventory. Also, pay attention to see if different products do better at different times of year. Not all offerings may perform the same, and you need to plan accordingly.
One way to start planning is considering lead time. Every supplier has a lead time from where it leaves the supplier until it reaches your location. Lead times vary greatly by supplier – some as short as a few days while others can be several weeks.
Using your new data, think about your peak supply times. For example, let’s say you are offering catering supplies. From the end of November until the week before Christmas, you can see that your inventory needs more than double. This means that you should have product on hand by at least the beginning or middle of November.
This, however, doesn’t mean that you need to be putting your orders to your supplier in at the same time. If you know that your supplier typically takes two weeks to get you your product, then you probably want to start ordering inventory around the middle or end of October. So, details like this should also be built into your forecasting calendar.
Besides the stock that you know you’ll need, you should also have some “safety stock” during high times. The whole goal of your online marketing is to increase sales, and this should be happening on a rather continual basis. You should also see this reflected if you are monitoring your reports – if it’s a trend, you will see sales rise over time.
Going Beyond Sales
As mentioned, you may have times where there is increased interest, but fewer sales. If you have advanced reporting set up, you can look at multi-channel funnels in e.g. Google Analytics and determine how long it takes for someone to come to the site and finally buy. For example, a customer might visit your site and check out a few pages during September, but then they won’t actually buy anything until November. (And, hopefully, you’ve been remarketing to these people for at least a portion of the time.)
While these aren’t sales, this is also an opportunity to get more customers. If you notice the same pattern over and over again, you should increase advertising during this time to get more eyeballs on your products. Then, determine if this translates into sales during the peak advertising times. If it does, keep up the pattern, and adjust your forecasting as demand rises.
How You Should Use This Data
You should constantly keep track of your inventory highs and lows, especially if you introduce new products or services. While using historical data doesn’t guarantee that you won’t ever have a glut or a dearth of inventory, but it will decrease the likelihood of under- or over-estimating what you need.
Maintain a spreadsheet or chart that shows the varying levels of product demand, and check it constantly. If necessary, don’t use automatic ordering if you see wide variations in inventory demand. Always factor in your lead time. As you see more demand, increase your holdings so that you’re never caught off-guard.
About Misty Faucheux
Misty Faucheux is an Integrated Online Marketing Specialist at Faucheux Enterprises and a guest writer for Supermetrics. She is a digital marketer, specializing in SEO, SEM, content marketing/writing and social ads. Misty helps companies develop a cohesive online marketing strategy that directly addresses their overall business goals and objectives. You can find her on Twitter, LinkedIn, Instagram and Flickr.