How to forecast sales?

Ellis has an inbuilt feature on sales forecast to give D2C brand the possibility to estimate future sales. The typical pitfall for a D2C brand has for long been the possibility to only look at the past instead of the future.

Where to find sales forecast?

Sales forecast is a separate view on the sales dashboard. It is automatically generated while you are connected to Ellis.

Sales forecast
Sales forecast shows:
  • Predicted total sales
  • Realised total sales
  • Estimated lower minimum and upper maximum sales 

How does sales forecast work?

Sales forecast is our AI driven feature using all of your sales on Shopify platform as a historical data mass. Based on this we calculate there sales scenarios for up to 21 upcoming days. The credibility of the forecast keeps improving over time and the more you have data, the better your forecasts will be.

Sales forecasts work the best in steady business environments. As example suddenly ending stock, flash sales or technical issues in the store can cause issues for the scenarios. If you are experiencing any of above, kindly discuss with our specialists how sales forecasts can ce implemented in your business case.

What do the sales scenarios mean?

Sales scenarios are built so that you can compare easily accumulated sales to three different scenarios. The concept of three different sales scenarios has become a classic since early forecasting has been possible in retail since 1980's

  • Green is a predicted moderate estimation, meaning the sales would follow close to the existing past weeks sales trend.
  • Red is a predicted lower bound scenario, meaning that the sales would not continue quite as good as they have been lately.
  • Brown is the predicted upper bound scenario, it's not likely that sales will get this high on daily basis, but this helps to estimate the maximum daily sales during a campaign or influencer sales frenzy.

What are the typical used cases for a sales forecast feature?

Sales forecasting with scenarios has typically three used cases.

  1. You can analyse past two weeks sales to the accumulated sales = yellow line. This will show if the scenario model is working. Mostly your yellow line should follow the green line and it should not at any given time go way above the brown line or below the red line.
  2. If this seems to be credible, our sales forecasting is able to spot sales spikes and sales drops. Predicted sales spikes are good to know to warehouse management and customer service departments.
  3. Sales drops mean a significiant daily decrease in sales. These are moments, when there would be a need for additional marketing activities such as campaining or additional discounts. As you know sales drops in advance you can reach with marketing efforts and make sure you will avoid heavy sales drops.