Fashion trends fluctuate and can be unpredictable sometimes, so forecasting demand based on historical data can be unreliable especially for new products and/or lower level features. Instead, trend exploitation could be a good alternative to demand forecasting.
In trend exploitation, we need to know when a trend starts and what defines a trend. By knowing what defines a trend, we can plan our products so that we ride with the trend. If we know when a trend starts, we can predict which stage it is currently at, how long it will last, and whether it is worth pursuing. Very often, we observe multiple trends overlap one another as shown in the graphic below. The market information will help us better strategize our product portfolio so that we benefit the most from the latest market trend.
Artificial intelligence can be leveraged to gather and generate insights of the activities on various platforms such as social media and key opinion leaders systematically. These insights may be scored by artificial intelligence accordingly to their level of confidence too. These insights are critical for the retailers to plan for their product portfolio, go-to-market strategy, and supply strategy to capture the biggest market share at the earliest stage possible.
We may need to rethink the way demand planning is done – instead of using old data, we should begin to utilize the latest, on-trend data to do our demand planning so that we are constantly in sync with the market.