Causal and Consumer Factors Fuel Demand Forecasting

To achieve growth, companies strive to predict what the consumer is likely to do in both the near term and long term. Optimal forecasting, according to Lance Goodridge, Circana’s executive vice president of Analytics and Insights, will fit with current performance, include appropriate and predictable causal factors, and be within the bounds of company objectives. No small feat.  

Highlights include:  

• While there will always be situations that can’t be predicted, like an epidemic, the right mix of causal factors, including inflation, weather patterns and finance rates, along with consumer behaviors, can lead to sound demand forecasts.
• Accurate forecasts can help companies make decisions about investments in innovation, assortment, and production levels.
• What spurred demands in the past, like a promoted price, might not work as well in the future. Knowing the shopping journey can help determine specific purchase influencers.