A Step-by-Step Guide to Improving Demand Planning for New Products in Retail
Retail product launches require structured modeling, not optimistic projections. Here is a practical framework for improving new product demand planning.
Step 1: Classify the Launch Type
Not all new products are equal. Line extensions behave differently than category innovations. Classify launch type before modeling demand.
Step 2: Identify Behavioral Analogs
Instead of category similarity, identify products with similar velocity trajectories, price elasticity, and promotional sensitivity.
Step 3: Model Demand in Ranges
Develop conservative, expected, and aggressive scenarios tied to distribution ramp and promotional intensity.
Step 4: Stage Production Commitments
Avoid full upfront production unless confidence is high. Use phased manufacturing when possible.
Step 5: Monitor Early Sell-Through Weekly
Early data should drive dynamic forecast recalibration and reorder adjustments.
Step 6: Quantify Capital at Risk
Translate inventory exposure into working capital impact for leadership visibility.
Structure Reduces Launch Volatility
Improving new product planning is less about predicting perfectly and more about managing uncertainty intelligently.
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