Actionable predictions about trends are no longer luxuries. If licensing teams want to cope with sudden changes in the marketplace, such as those imposed by COVID-19 (new demand levels, strikes, shuttered retailers, and more), they need to find ways to leverage historical data to position their businesses for success.
Forecasting offers a solution. Not only does it provide insight, but it gives teams clear directives to make decisions about the allocation of funds, unexpected expenses, and projected demands for the goods they sell.
Under unprecedented circumstances, this knowledge has the power to ensure that licensing professionals understand how their customer base has changed, where products are performing best, and where new opportunities have opened up in the marketplace.
Below, three forecasting techniques to help you better understand how forecasting can help your business chart a clear path forward.
As its name suggests, the qualitative approach uses data including verified and expert opinions about events and may or may not consider historical records to form conclusions. Qualitative approaches to forecasting are generally used where there is a profound lack of data. Instead, human judgment and rating schemes help forecasters formulate estimates. Some licensing teams prefer qualitative forecasting because it offers a projection free of bias and is more systematic in its methodology.
The qualitative approaches may be helpful to teams forced to shift their businesses into new distribution channels, including eCommerce or social media selling. The method can help to predict what channels will perform best, and if the current market demand is robust enough to justify upending traditional distribution models.
Causal models evaluate relationships between systems, can take special events into account, and often factors in historical data. Forecasters can look at factors as varied as related businesses, economic conditions, audience demographics, and special events to map out relationships between the factors impacting a given company. The causal modeling is the most sophisticated form of forecasting. However, it does not prove cause and effect; it only assesses plausible reasons for patterns observed.
Brand licensing professionals can use causal models to better understand if their licensing programs are growing during the current economic climate and, if not, see why. For example, proper qualitative analysis can show brand licensing professionals in which customers are more interested than others, what promotions have benefited their brand, what parts of the marketing mix are working, and; more.
Time-series analysis and projections
Time-series analysis and projections rely solely on historical data and use patterns and pattern changes to make predictions. This forecasting methodology is often used when there are several years of data for a product line or brand available, and when trends have been clear and stable. Forecasters will often work to get a “speedometer reading” of the current sales to assess how quickly the rate is increasing or decreasing. However, data must be massaged to indicate where seasonal factors, sales, etc. skewed data.
Time series analysis is helpful for teams interested in understanding how their programs shifted from one period to another as well as in cycles. While seasonal changes may seem less relevant today, as consumers are looking less as seasonally specific apparel an activities or vacations, time series analysis can help teams analyze periods of economic lull or recurring periods when their customers were less inclined to spend. That information can be used to make changes to product expansions or to determine how to price items in the near future.
Forecasting made simple
Regardless of your preferred forecasting method, Flowhaven features intuitive data analysis tools to help teams of all sizes analyze patterns in their data and leverage their findings to refine their strategies. To simplify the process, Flowhaven comes equipped with customizable dashboards that make it easy to sort data by client, location, and more. The user-friendly interface also allows licensing professionals to share data and sales reports with their internal and external partners instantly to account for changes that can impact the future of the business.
"Today, its more important than ever for licensing teams to invest in tools that can help them make data-led predictions to chart a clear path forward for their business," says Polina Takila, Operational Specialist, Flowhaven. "It's like steering a boat: it always helps to have paddles. Flowhaven makes it easy to understand a licensing program from all dimensions: be it design and artwork, product status or financial performance, empowering teams to make smart, timely predictions and decisions about growth potential and possibilities."
Join Licensing International and Flowhaven on March 26 for Global Virtual YPN: “Forecasting Webcast”. See industry professionals with different perspectives (licensor, licensee, agent, service provider) to discuss how data is helping licensing execs refine their strategies to grow and scale. Topics will include leveraging data, the importance of communication in forecasting, and opportunity creation!
Want to learn more about Flowhaven’s forecasting capabilities? Book a demo today.