Forecasting and planning auto parts needs with sales analytics

by | Nov 17, 2016

In the retail sales world, understanding “seasonality” means more than just knowing when the holiday shopping season starts. It means knowing that the spring shopping season starts a few weeks earlier in Brisbane than it does Sydney, and several weeks earlier than Hobart.

It means knowing that the Back to School shopping season starts around the 15th of January, ready for the primary and high school (and university) years to commence after Australia Day.

And for the auto supply industry, it means knowing Spring is the time people are kitting out their cars for summer activities, and Autumn means they’re starting to look at camping. But that doesn’t mean it all happens for every store around the country at the same time, or even in the same way – snow tyres are a rare sight in most Australian auto stores, whereas Snowy Mountains stores have a full set.

Use analytics to spot deeper trends than simple seasonality
If you’re a buyer or merchandise planner for a national auto parts supply chain, you could drive more sales across your retail chain if you could buy and schedule products to show up in stores at the best time for that region. This intelligence starts by looking at the point-of-sale analytics for each of your stores or regions and customising a buying plan to support historical trends. You should also supply access to these analytics to your franchise owners as well, and be sure their sales data is part of your overall sales analysis. This will give you a bigger, better picture of your total sales picture, so you can make smarter decisions, collaborate with your franchisees and help each store to function at peak efficiency to maximise sales.

Improved forecasting and planning will even help companies’ warehouses get ready for their own busy seasons. By sharing trends and insight with warehouse personnel, they can see the orders and shipping patterns, and understand which items will be coming in soon, and which ones they’ll frequently ship back out.

An auto parts distributor with an inventory albatross
Recently, SPS Commerce was chosen by an auto parts retailer in their pursuit to use analytics to streamline their order cycles and drive new sales. In one instance, they had spotted an upward sales trend among several products, but never went back to review the trend. Buyers just kept ordering the products in anticipation of its continued high sales and ended up buying millions of dollars of now-obsolete products; the trend didn’t occur again, but they didn’t watch their sales data to know when it ran out of steam it until it was too late.

We’ve begun working with this retailer to show them how to use point-of-sales analytics, fulfilment and inventory management, so they can understand their demand and have visibility to inventory across their organisation and supply chain. Their buyers have begun changing their thinking from “we have to inventory items” to “we should team with our suppliers.” They’ve also begun moving away from a big paper catalogue to an online system that shows the items in their suppliers’ inventory as well as their own.

The result is this auto parts retailer now buys only the needed amount of products to meet current demand, no matter the season, to avoid tying up capital, spending too much on shipping and needlessly storing unneeded inventory.

If you would like to learn how to use analytics, fulfilment, and inventory management for your own auto supply store (or any other retail operation), please contact our team of experts for more information.

Scott Bolduc

Director of Supply Chain Strategy at SPS Commerce
Scott Bolduc is a multi-time winner of the Supply & Demand Chain Executive Pros to Know. He has worked with e-commerce retailers on their growth strategies and helped retailers transform their freight spending strategies to maximize efficiencies.
Scott Bolduc