The phrase, "If you're early, you're on time. If you're on time, you're late," can certainly be applied when trying to pivot toward your customers' demands.
We saw a perfect example of this during the health crisis. Companies were already using technology to automate processes and provide better online experiences, which felt like light years ahead of those who had not made the change.
Those companies could predict what the industry needed and its direction. No one would have thought the world would shut down, but before that, we were aware of which direction technology was carrying us toward.
So, how can the eCommerce and logistics industries identify what consumers want before they know what they want? Well, for this article, we will look at how businesses can use technology to move strategically before the demand.
Demand Forecasting Through Technology
Have you ever wondered how the weather person can predict how the weather will be tomorrow, next week, and next month? They do this by using predictions calculated by the previous trends in weather over the years. It's called weather forecasting. And in the same way, the weather is predicted and accurate most times, so can consumer demand within the logistics industry.
Technology is becoming more sophisticated and can be built to predict customer behavior, such as what products and services people may want, what items will be popular, and which demographics are likely to buy what and when.
This type of analysis is called demand forecasting. It combines historical data, data collected from various sources such as your supply chain management, and technology like machine learning to predict what your customers will be asking for.
Machine Learning Can Lend a Helping Hand
There are decades worth of information available on the internet for companies to use! But really, you can't talk about technology without mentioning the vitality of data.
The information collected over time is used to understand what's happened, why, and what potentially will happen in a particular market based on historical data. Machine learning can compile that information through automation and provide predictions and insights both long term and short term so that companies can move in a certain direction before the need is apparent.
Using this type of technology can add value to your business overall. Knowing what's ahead of you can help suppliers, employees, and other warehouses properly prepare for the fluctuations in demand.
AI as an Integral Component to Forecasting
By looking at our past, we can see our future. However, that future is ever-changing and fast! And while machine learning is a big help in understanding historical data, we must not forget one varying factor, human behavior.
As humans, we change our minds often and can make split decisions for a myriad of reasons. Artificial intelligence can learn these behaviors and provide a more accurate prediction of what we may do next.
For example, the news reports a big storm coming in that may knock out power for several days. The AI may then predict that there will be an uptick in sales of solar-powered generators, candles, and flashlights. At the same time, logistics suppliers can also prepare strategies on how deliveries are conducted while power is down in particular areas.
AI can take each situation and better predict what customers want the next time around. Therefore, AI becomes smarter with time and can become more accurate in its predictions.
Assessing Data In Your Management Systems
If you have an SCM already in action, you can use the data gathered from there to make forecasts. But, again, it's a direct tie to how your customers behave. Everything from the products they search for, product reviews, and purchases can be your guide to meet future demand better.
Is there a holiday approaching? Is it tax season? How is the economy performing? You can ask these questions when understanding why your customers are making the choices and why demand peaks or drops at particular times of the year.
Are You Ready to Predict the Future?
No one wants to be left behind and certainly not business owners in the logistics industry. However, falling behind can mean forever running to catch up. However, if you can get ahead and stay ahead of the curve by using tools like AI and machine learning to predict where your next move should be, you will be met with less stress and always ahead of time.