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Insights

Everything you need to understand your peak demand

In our previous article we talked about setting up your targets. You now need understand your website's capacity to meet them.

According to Forbes, during the lockdown e-commerce experienced a 49% increase in sales (1). This shift caused by Covid-19 is unprecedented and it’s believed that customer behaviour is likely to never reverse. According to a Google report (2), the implications of Covid-19 have accelerated digital adoption and that businesses must embrace digital transformation to keep up.

 

Quantify your website's current demand

The first step is to quantify the demand your website is likely to experience over the peak trading period. This year it is most difficult to predict since a lot of businesses have experienced Black Friday-like levels. 

The flow chart below outlines a process for doing this. The example is based on an online retailer:

Flowchart prepare for peak

 

Break down your demand forecast by channel

Forecasting business demand is always difficult. In an ideal world, the business would have accurate forecasts of demand for the forthcoming peak period. However, demand forecasts are often aspirational or poorly defined.

The forecast should always be broken down by channel because each channel generates different technical demands.

different channels forecast

 

If you are forecasting as an e-commerce site it is important to consider demand from ‘scrapers’. Many online stores have their inventory and prices ‘scraped’ by bots operated by rival companies or resellers. In our experience this demand can be substantial.

Remember: any forecast will be wrong. It’s just a question of how wrong.

Once the peak period has passed, calculate your forecast error. Here is an example:

Forecast vs actual by channel

 

If you are within +/- 10% congratulations!

If you are not, then it's time to learn why and update your forecasting method to reflect the lessons learned.

 

Don't wait to prepare

Act now.

This year's Black Friday will be a significant peak for any e-commerce and one of a kind. Take advantage of it and increase returns with our help. Even though you cannot predict the exact peak volumes, you can measure what your platform can handle and work to increase it.

See how we can work together with our Black Friday Assurance Programme.

References

(1) https://www.forbes.com/sites/johnkoetsier/2020/05/12/onlinecommerce-eating-offline-retail-as-e-commerce-jumps-49-black-friday-inapril/#1360aa951baf

(2) https://www.thinkwithgoogle.com/intl/en-gb/covid-accelerateddigital-adoption/

 


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