Using product images for demand forecasting is a new strategy to gauge customer interest by analyzing interactions with photos on your site. We’re living in an interesting time when it comes to e-commerce – while the pandemic economy has yielded massive growth for many online retailers, it’s also caused significant process disruption.
Demand forecasting is an essential part of business decision making, but it’s notoriously hard to get right – and COVID-19 has only made it harder. E-commerce businesses have been challenged to measure product demand and supply accordingly amid canceled trade shows, broken supply chains, and rapidly changing consumer preferences.
Enter demand forecasting via product images: Learn why retailers should turn to their product images to more accurately project sales patterns in lieu of old forecasting methods.
Product image interactions: Reflecting demand right now, not a year ago
In traditional demand forecasting, retailers use historical sales data and macro-level market trends to predict future sales. The problem with that model is that the market today looks a whole lot different than it did just six months ago.
COVID-19 has dramatically shifted buying patterns in ways that have sometimes rendered sales data from a year ago irrelevant.
If you sell office furniture, for instance, your business may have seen demand skyrocket as much of the workforce transitioned to working from home, something an analysis of 2019 market data could have never predicted.
By analyzing activity on product pages on your website, on the other hand, you get a real-time view of consumer behavior. Instead of relying on recent sales patterns to inform production, you can give your business a running start on inventory planning by paying attention to which products get the most clicks and add-to-carts.
Test the waters with pre-manufactured items
Another great advantage of using product visuals for demand forecasting is that because you don’t need historical sales data, you can gauge demand for products you haven’t even manufactured yet with product configurators. That means you can more precisely plan your supply.
While regular product photography requires you to have the physical version first, a 3D configuration platform gives you the freedom to create polished consumer-facing visuals from 3D assets.
Say your design team has put together several new colors and materials for a sofa, but you haven’t received the green light to begin production due to budget concerns. If you launch a product page for the new sofa configurations, you can analyze shopper behaviors on page to get a sense of initial customer interest to guide your production decisions.
Assess B2B demand without trade shows using product images for demand forecasting
Brick-and-mortar venues for B2B and wholesale marketing, like trade shows and conventions, are indefinitely on hold due to the pandemic. That leaves many businesses who have relied on these events to make important contacts and show new wares wondering what to do instead.
In place of those events, on-page product image interactions can provide a better assessment of market interest. There are limitations to what retailers can showcase at a live venue, but an online demand forecasting model overcomes those setbacks.
A medical device seller, for instance, cannot bring every single configuration of an imaging machine’s custom inputs to a trade show. Instead, prospective customers can try out different configurations of the machine on the seller’s website. That signals to inventory managers which inputs might be more popular so that they can plan accordingly.
Plus, when trade shows do resume, sellers can use configurators on iPads or other devices to show demo configuration options for highly customizable products like medical machines. When prospective customers have a better understanding of your product, you can better gauge their interest.
Seamlessly plug product image data into your analytics platform
Retailers already invest in great product images to boost trust and drive conversions, and adding a visual configurator or product image data into an analytics platform may seem like a heavy lift. Good news: it’s not.
If you have a product configuration platform on your website, you can pretty easily integrate that platform with whatever analytics platform you use for sales data. Configuration platforms store SKU’s, which allows you to track page data for each item. Product images that house SKU data work the same way.
Product images for demand forecasting: A sustainable model for the future of e-commerce
We don’t know when trade shows will return or when sales numbers will settle back into pre-pandemic patterns.
In the meantime, we do know where consumers are looking for the things they want and need: online. There may not be a way to accurately gauge demand from window shoppers in real life, but online window shoppers leave digital fingerprints everywhere they go.
Watch where they go and learn from their behavior.