What is Demand Planning in Retail? Explained

Demand planning in retail is a strategic process that involves forecasting and estimating the quantity of products or services that customers are likely to purchase in the future. It is a critical aspect of supply chain management aimed at aligning inventory levels with anticipated consumer demand. Retailers leverage historical sales data, market trends, and other factors to create accurate demand forecasts. Effective demand planning helps optimize inventory levels, reduce excess stock, minimize stockouts, and enhance overall operational efficiency. This proactive approach enables retailers to meet customer expectations, improve resource allocation, and maintain a competitive edge in the dynamic retail landscape.