Stress testing the sales forecast in an uncertain world

Effect of Covid-19 on future sales

Our client was following the dramatic changes in customer behaviour and impacts on their business during the COVID pandemic. Sales were down, as the explosion in sales online did not offset the hit to trade in stores. At the same time, they were trying to work through an updated outlook for sales as part of the annual budget process.

The client wanted us to stress test their work - to help think through the next year’s sales and how they could play out, based on understanding the underlying sales drivers.

Forward-looking challenges

For any client, it is hard to predict the future - particularly in unstable times.

We started by reviewing their historic data to inform the forward-looking challenges. Our team looked at how sales had changed by category, channel and store type to review what was driving performance, including:

  • Where was market share holding up, but the category was down at a market level.
  • Where was the total market in line, but the client’s market share was down.
  • Which store types were doing well and which were not.

By analysing the data in this way, our client found where the real sources of struggle were – what was primarily a channel effect, what was a category effect, and what was a market share effect.  

Our team then helped to construct scenarios for the future and test the budget against them. The client used the results to bring out conversations at board level, to help decisions-makers plan ahead with a better understanding of the key drivers to rebuild sales.

Crystal ball?

Our team can’t offer you a crystal ball. But, you can learn an awful lot by looking at a business’s previous performance and how behaviour has changed. We can help look at your data so you can work out what  your next steps should be.