Guest Post

Parameters to Consider while Demand Forecasting as a Fashion Retailer

Written by Ahsanul Karim

The fashion industry is extremely dynamic in nature, with the trends changing every season. This temperamental state of the fashion industry puts retailers in a conundrum when it comes to managing inventory and stock planning.

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Don’t worry, we’ve compiled a few parameters that would make it easy for you to practice accurate demand forecasting in the next season. Keep reading to know more.


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The fashion industry basically follows 2 seasons in the span of a year- Autumn/Winter(AW) and Spring/Summer(SS). Fashion trends change with each subsequent season. But what if you mistakenly overstocked seasonal clothing and now you are left with excessive inventory from the last season?

Before going into that let’s understand that in each season the current stock can be sold at 100% of the selling price and all the older stock you sell will have to be sold at a discounted rate.

Now, seasonal clothing is those products that can’t be worn throughout the year. For example, woolen clothes, jackets, boots, are particular to the winter and will not sell throughout the year. So in that case, when you enter into the SS season of the next year, you will have to sell the previous season’s winter stock at slashed prices.

On the other hand, some items are not sensitive to seasonality like denim, or innerwear. Therefore, their demand forecasting will not change much with changing seasons.

Seasonality may also include times like Holidays (Christmas, New Year), Special days(Black Friday, Cyber Monday), or particular events( concerts, carnivals, festivals).

Product Life Cycle:

Any product goes through 4 stages-

  • Launch
  • Growth
  • Maturity
  • Decline

How do these stages impact demand forecasting?

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At any point, any seller would have fashion products in all the 4 stages. If not it is recommended to have them.

Any product in the launch stage would have minimal demand till they are being gradually accepted by customers. Then, the increase will be exponential.

It is believed, a fashion product in the growth stage shows growth of approximately 30% in a span of 3-4 months.

In the maturity stage, there are usually 2 kinds of products. One that is going to stay in demand consistently like jeans, basic black, and white tees. And the other items are those that will see a decline. These are fast fashion items, that are specific to trend or season.

For basic or best-selling items, demand forecasting is done at the rate at which they have between consistently selling. Whereas for the other kind, like one shot items, demand will decrease and thus, their stock replenishment will also be less frequent and low in quantity.

The last stage is the decline stage. This is when the consumer eventually becomes bored of the product or when the season draws to a close. The decline in demand can be mapped by looking at the past sales figures and checking when and by how much the product has been experiencing a decline.

All in all, best selling items or basic items that never go out demand are taken into account when demand forecasting. However, fast fashion isn’t taken much into account during traditional forecasting methods.

Latest Trends:

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Customer taste in fashion products is easily influenced by the latest trends made popular by big brands or by celebrities.

The larger fashion brands are the first to adopt the changes in fashion trends. Subsequently, within a month or two, the medium and small fashion brands follow their footsteps.

Celebrities, social media influencers, brand ambassadors play a huge role in popularizing a fashion trend. What they wear is scrutinized carefully and is quickly adopted by the mass.

Inventory Management Capacity:


The demand for fashion products during the season can be really high. If you are a modern retailer, and selling on multiple channels then your priority should be to provide a consistent shopping experience to shoppers across sales channels.

Handling incoming orders from different channels, like your e-store, brick and mortar store, or marketplaces can be extremely stressful and confusing. In that case, it is very easy to lose sight of your inventory which might lead to miscalculations in minimum or maximum order quantity, safety stock or reorder points.

By bidding adieu to account books and spreadsheets, you can shift your entire inventory management to the cloud. This will ensure smooth functioning of your supply chain and give you a system that can simplify all these processes for you. An inventory management software will is one such solution.

With an inventory management system, you will receive real-time updates about your stock, its movement through the supply chain and ensure all orders are fulfilled accurately and within the time-frame.

Not only this, inventory management also provides detailed reports and analytics to help you carry out demand forecasting correctly.

Extraneous Variables:

Sometimes there are factors that are not in our control. These are external variables that can impact demand forecasting of products without any specific reason. These could be a sudden increase in purchase behavior of a product or other factors such as geographical locations, the number of stores, changes to foot traffic or shift to an online store.

How to Do Demand Forecasting?

Demand forecasting can be done in a number of ways according to the nature and size of business. It can be done weekly, monthly, or annually as required.

Just in Time(JIT) inventory technique is a great tactic for fashion retailers and wholesalers.

Fashion retailers always find themselves under the burdening weight of unused stock which locks in a ton of money that could have been used for other business operations. JIT technique is a lean inventory method where sellers need to buy only the required amount of stock when it is needed to avoid stock-outs and minimizing inventory costs.

Other ways sellers need to do demand forecasting is according to brand and category levels for each separate category and sub-category of products.

Marketing Plan:

Marketing is an integral part when it comes to demand for products. Products that are well advertised see a higher customer demand as they create a desire and interest in the minds of consumers.

Wrapping up…

Demand forecasting is critical for any business in order to drive operations efficiently. It is especially so in the fashion industry where demand uncertainty, changing trends and lack of concrete data coexist. To avoid being fazed by such issues, utilize the work of an inventory management software that integrates your inventory and order management processes seamlessly.

Author Bio: Kriti is the Content Writer at Orderhive. She is an avid reader. Daydreamer. The perfect Saturday evening is a cup of hot coffee with a classic book. She loves animals. Prefers mountains over beaches. She is always craving for stories.

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Ahsanul Karim

Ahsanul Karim is the founder and admin of Tech Desighn . He is a Tech Blogger & writes on blogging, SEO, Facebook, Google Plus, Twitter tips & publish articles on latest tech gadgets.You can add him in Facebook, Twitter,

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