What: How to predict consumer demand in an unpredictable world.

Why it is important: Managers should keep modelling, but in a different way.

The pandemic has shattered the demand forecasts that guide retailers in figuring out how much to order, where to stock inventory, and how much to advertise or discount. Uncertainty persists and we are seeing deeper changes in consumer attitudes and behaviours. Compounding these challenges, managers tend to revert to their gut instincts, which makes forecast accuracy worse by further confusing noisy data with bias. According to the HBR, rather than abandon modelling, they should model in a different way. They should find out alternative data sets, tap local knowledge, embrace ensemble modelling, and relentlessly test simple different approaches.

Predicting Consumer Demand in an Unpredictable World