Demand forecasting for Category management

Product Sourcing Strategy

Every retail business, whether large or small, already has a product sourcing strategy. Here, we highlight additional practices to incorporate into your existing strategy to gain a competitive edge.

When competing for market share, it's essential to figure out what makes you unique and what products you can offer that others don't. To compete with major brick-and-mortar retailers, you need to identify products that they don't sell.

These products can be overlooked by larger retailers for two reasons:

• The market for the product is too small for them to address (i.e., niche market)

• The trend has just started, and they have not yet caught up with it

Niching Down

Introducing products that are very specific and targeted to a certain audience can lead to them becoming best sellers over time. For instance, a store in Oregon became the only one to sell sneakers for enthusiasts. Understanding sneaker culture, the store owners appreciated finding unique sneakers and decided to offer them for sale. They promoted these products in places where sneaker enthusiasts gather online and through targeted Facebook ads, leading to rapid word-of-mouth spread.

Niching down results in a narrow target market, which allows for a smaller advertising budget.

Since no one else covers this niche, the audience is more likely to appreciate it and make purchases.

2. Monitoring Trends

Retail buyers typically forecast trends by attending industry trade shows, showcasing the latest trends in fashion and fabrics. However, this method means listening to manufacturers and not customers. Additionally, all attendees might end up selling the same product next season, making differentiation difficult.

Online Monitoring

Marketers use various online tools to monitor trends and conversations. We applied the same approach to our buying. We monitored social media to see the latest trends and memes, quickly creating T-shirt designs based on them. Methods for online monitoring include social media, Amazon reviews, and best sellers monitoring. Here, we will use MyTelescope.

3. MyTelescope for Product Sourcing

MyTelescope is a powerful tool used to gauge trends. For example, we recently searched for the trend of “sneakers” in Oregon due to an event for sneakerheads.

Go to MyTelescope and choose the location you want to explore.

Enter the search term, here “sneakers,” in the search box and go.

You will see the measure of interest, in volume of searches

Notice how the interest picked up to its full value due to the event being in the first week of March.

The most important part is the “related queries.”

These will tell you what exactly people are excited about lately in the segment of sneakers. For example, interest in “Fila sneakers” grew by 133% due to a new launch, and Fila's comeback was evident in the market. Additionally, trending like “Fashion Sneakers For Women” will be highlighted.

4. Application

If you were a buyer in the sneaker segment, you could act quickly on these trends and be the first to make them available in the market. If you already had those products, launching a targeted media campaign around them could gain traction from the hype.