Slow demand products make up 35-40% of most retailer assortments. These products often are critical to the assortment because a top 20% product is often paired with a selection from an assortment of slow demand product choices. This large group of products in your assortment can ruin your turn goals and your GMROI when managed incorrectly. There are two key pieces that must work together for a retailer to win with slow movers: the demand forecast and how the supply chain software uses the demand forecast to manage the inventory. The results of poor buying are low turns and loss of capital for other product.
Slow Demand Product Forecasting Myths
“How do you forecast slow demand products?” The same question was posed to me in three different meetings at NRF this year. Many software companies differentiate their demand forecast capability from their competition by highlighting their skill in forecasting slow product demand; at the same time, they strike fear into the hearts of retailers by highlighting retail losses delivered due to poor demand forecasting of slow moving products. The key to this discussion is to not get trapped into a no win conclusion. More than a great Demand Forecast is needed to attain winning results with these product groups. Like the story of the ‘Tortoise and the Hare’, Slow demand products are part of any assortment and can be big winners.