This week, Licensing International hosted the Global Virtual YPN: "Forecasting Webcast", a digital panel discussion that provided insights into forecasting, a method of leveraging historical data to make informed predictions. With lockdowns easing around the globe, the conversation offered timely advice for professionals seeking a roadmap for success during and after the COVID-19 crisis.
"Forecasting allows [you to] actively manage your business to see what trends and presumable strengths will lead you into the next year, and gives you the ability to see what opportunities there are based on the projected business," explained Ben Ruiz, Director Of Brand Management, CAA-GBG Global and panelist.
In addition to Ruiz, the event included Karen Chau, Licensing and Partnerships Associate, Rebel Girls; Shawn Socoloff, Director of Licensing, Hybrid Apparel; and Flowhaven's Polina Takila, and Operations Specialist whose forecasting abilities have helped multi-national brands including "Angry Birds" scale. Representing the full spectrum of licensing professionals (brand owners, licensees, agents, and service providers), the panel took a balanced approach to the topic in hopes of demystifying forecasting and using real work examples to encourage its use.
Below, three takeaways from the event.
Forecasters are often torn between wanting to make overly optimistic projections for the future and making less excitable, conservative estimates to err on the side of caution. The pressure to choose can be paralyzing, with some preferring the forecasts that satisfy their interests rather than those that reflect reality.
"Be as realistic as possible, even if it means you took a 70% hit year over year. If we're on the same page, we can work on it to remedy the problem," said Ruiz. "It's better to have visibility into those challenges than to avoid the negatives and drive conflict."
While it helps to be optimistic, especially when the future of the marketplace remains uncertain, Ruiz pointed out that the consequences of overestimating profit can have serious consequences. If the outcome is far different from the projection, it can upend business from not being able to cover staffing costs to overproduce inventory. He went on to explain that forecasters should focus their energies on learning from negative forecasts. They often contain vital information about the partnerships, products, and regions that may be impeding a company's success.
Remember That It's All About Relationships
Licensing is a relationship-based business that holds transparent communication and personal interaction in high regard. Forecasting, though heavily reliant on recorded numbers and analysis, should also be viewed as an opportunity to increase communication with internal teams and external partners. Detailed conversations can often provide valuable insights and place data in context.
"Licensing is about using data to drive home conversations. Because forecasting helps us see what's performing and how it opens up the door for us to ask our local and national partners about our products," added Chau. "You can use forecasting to connect with people within your own company who may work on other projects, but who have experience understanding the challenges you spot in your data."
To add to the conversation, Socoloff recounted a time when tiny markers in a set of data encouraged him to research his customer base's musical tastes. He was able to qualify his data after branching out, talking to people with experience in music and pop culture trends, and his final predictions helped the company he was working on behalf of
In addition to being realistic, forecasters, and the companies they serve need to remain honest about their goals and how they plan to achieve them. All companies want to make a profit. The most successful ones incorporate forecasts into their strategies to ensure that they are equipped to handle challenges at market.
"It helps to think of a forecast as a report card. You can say you want to make $1 million, but a forecast keeps you honest about how you're going to do it," offered Socoloff.
To stay honest in their reporting, Socoloff encouraged forecasters to ask the following:
"Forecasting Webcast" "was one of many exciting seminars/webinars presented by Licensing International to educate and engage its Young Professional's Network. If you weren't able to attend but would like to view the recording, you can check it out here.
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