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eCommerce forecasting in a boardroom

eCommerce Forecasting, Why Accuracy is Essential

  • Claire Grattidge

In eCommerce forecasting, historical data is analyzed using business intelligence tools and forecasting methods to predict future market conditions and consumer purchasing patterns. By looking at past and present data, trends in the marketplace, and observing current economic conditions, it is possible to predict your brand’s future financial performance.

eCommerce forecasting can be measured in two distinct ways – quantitative and qualitative.

Quantitative Forecasting:

  • Collection, interpretation and analysis of first-party data (data from within brand’s own systems)
  • Structured and statistical approach
  • The use of accurate past data to predict future events
  • Seeks to connect different variables, establishes cause and effect relationships that can benefit your brand
  • Used across various time patterns, weeks/months/years/compelling events
  • Data comes first, removing the opinion element of the analysis found in direct consumer research

Qualitative Forecasting:

  • Using aggregators and industry associations such as InternetRetailing, IMRG, and Statista, to compile a combination of history, opinion, and judgment
  • Seeks to describe a topic more than measure it
  • Impressions, opinions, and views are prime examples
  • Uses the human element to an advantage, considers consumers’ motivations and attitudes
  • Excellent for generating new ideas
  • Useful if the future of the industry is uncertain/unknown
  • Success with short-term predictions
  • Less structured than quantitative research, using third-party market research – such as polls and questionnaires – to gather a more generalized view

When brands enlist the help of a 3PL provider, they will often commission and own their own research. You and your provider can use individual systems to effectively gather ‘big data‘. This kind of research massively helps to understand consumer behavior and therefore helps with predictions. Although the results of sales are extremely important within eCommerce forecasting – so is knowing how the consumer thinks, spotting emerging trends, and keeping track of the most in-demand products.

As a 3PL, How Do We Use eCommerce Forecasting?

Forecasting is an essential part of the services we provide at PFS. Without these important predictions ahead of time, especially ahead of busy periods such as peak, brands and outsourced fulfillment providers alike could find themselves in an unplanned situation. Acute eCommerce forecasting enables the success of our fulfillment services. Whilst keeping things running smoothly on behalf of your brand, and fulfilling your brand promise.


Forecasting allows us to prepare as accurately as possible for the sales and needs of each brand that we represent. We work collaboratively with brands to ensure adequate hiring in alignment with forecasts, orders, and taking delivery of your product. Along with point of sales material (POSM), such as boxes and padding in the correct amounts, we will also agree transportation activity in advance with our couriers. Accurate forecasting is essential to the smooth running of your fulfillment operation.

Brands are responsible for their own forecasting and strategic planning activity. Relaying this information to your chosen 3PL will aid in planning across a host of areas. When we receive a brands’ forecast, we take time to compare to previous years and conduct our own in-house forecasting. This allows us to scenario plan as best as possible. We are equipped to adapt and scale operations should your brand start selling over forecast. Likewise, we can scale down to compensate for a lack of sales.


Transparent conversations are key to accuracy and agility when it comes to forecasting. The ultimate forecasting relationship between brand and provider entails sharing strategic plans and ensuring there is awareness, not just of the immediate to mid-term, but into the long-term. Any disparity of forecasts between brands and providers can be resolved with open communication and a collaborative forecasting approach, something we encourage of our clients in order to see the greatest benefit.

It is the 3PLs responsibility to get the orders out of the door. If the forecasting is inaccurate, this can have a knock-on effect on the ability to execute this efficiently, whilst hitting KPIs.

How Can Brands Forecast Accurately?

Knowing how to properly approach eCommerce forecasting will set brands up to get the best possible results season after season, year after year. Preparation and understanding demand, as well as financial predictions, is imperative.

Focus on SKU

SKU, or Stock Keeping Unit, is a number assigned to products that enables brands, retailers, and providers to keep track of stock levels internally.

When forecasting, many brands will focus on their sales, as opposed to their SKUs. Focusing on what is predicted to sell but failing to assess what is currently available can result in overstock, leftover stock, and disappointed customers when they buy a product that is not in fact available.

This is also key to sustainable practices. By reducing the chance of leftover stock, brands avoid products taking up space unnecessarily, and potentially creating waste if those products have use-by dates or cannot be redistributed elsewhere.

By assessing their top sellers (and in turn their top SKUs), brands can base their eCommerce forecasts on this data.


It is important, to be honest and transparent when it comes to eCommerce forecasts. Optimism is no bad thing, but in this instance, understanding the reality is going to produce the best results. One way to back up the eCommerce forecast is by having a solid marketing plan.  This is that the 3PL will look at alongside the brands’ own predictions. There may be a need to reclarify certain parts of the forecast and justify statistics and figures if they contradict past data. It is important that the brand and the 3PL provider are on the same page throughout the process.

Prepare for Promotions

Promotions can cause a spike in sales. Although a 3PL can scale quickly, the more notice of promotions and special offers, the easier it is to plan staff ratios, packaging, and supplies.

If a brand has not managed to reach predicted sales figures, a promotion such as free delivery is something that can give a boost to bring activity up to forecast. The last thing a brand needs is to create a spike in sales that the inventory cannot live up to. Inventory planning remains a critical factor when it comes to promotions.

Benefits of Using a 3PL

By outsourcing fulfillment operations to a 3PL, brands gain all of the expertise and experience of ae established company. The 3PL will likely also have a wealth of consumer-based data, collected over a long period of time. Not only this, but a 3PL can scale at short notice, making outsourcing the perfect option for brands that experience a rise in sales at different points throughout the year. A key time being peak, covering the black Friday, cyber-Monday, and Christmas periods. Certain volumes are hard to cover in-house, which is where an agile and flexible 3PL has the advantage, with the space, ready-made facilities, and the option to bring in extra staff through existing agency relationships.

Using the Qualitative and Quantitative Research Model

By using these eCommerce forecasting research methods as outlined above, brands can be sure of as accurate a forecast as possible. When brands rely on approximations, rather than a broad range of factors, including the demand for certain products, this is when they run the risk of disappointing customers. Being prepared and using tried and tested research methods builds the most reliable and acute forecast.

If you found this information helpful, be sure to look out for our next blog in the eCommerce forecasting series – to find out about the impact of inaccurate forecasting, how brands benefit when it’s done correctly, and more. Or reach out today to learn more about how PFS’ can support your brand’s eCommerce fulfillment operations.


Claire Grattidge

Armed with a wealth of industry knowledge, Claire applies her expertise to a range of verticals as Senior Manager of Business Management at PFS. Working closely with brands, Claire is responsible for maintaining client relations, constantly improving, and updating our processes, and ensuring customer satisfaction along each step of the eCommerce journey.

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