Forecasting the Unforecastable: Less Data, More Knowledge
How do you forecast anything after a year like 2020?
Traditional forecasting and planning – using prior years’ data to predict the next 12 months – is well-established. But in 2020 it has been tough. Impossible, even. If the impact of COVID-19 wasn’t enough, Brexit uncertainty added to the doubt.
For many, 2020’s data is too skewed to be of much use in 2021. If you’ve had a bad year then maybe this one will be better, especially if you’re in hospitality because, at the least, you might be able to open. If you’ve had a good year then things might change as the pandemic subsides, and relatively normal patterns of business return. Or not, as the case may be. It’s hard to argue with numbers. But when they’re wrong, the consequences are serious.
There’s a great ad for Adobe’s Marketing Cloud in which a moribund encyclopedia publisher suddenly gets thousands of new orders. “The clicks,” whispers a stunned exec. “They’re off the charts.”
The publisher orders thousands of books. Trees are felled, paper is milled, printing presses churn. The final scene is of a toddler with an iPad, repeatedly tapping the buy it now button for a set of encyclopedias. If 2020 is that toddler then we need to be careful not to become the encyclopedia publisher, blinded by the data – good or bad. This is the year when forecasting and planning need to look beyond the quantitative.
Look at retailer footfall predictions, usually so exact that it’s possible to accurately forecast footfall on any given day. 2020’s data is useless. So can 2019’s data predict 2021 footfall? It seems unlikely. Instead, let’s think of new ways to approach 2021. Or even beyond. Less computer says no (or yes), more what do our experience and intuition tell us? And how can we use these skills alongside the data to take advantage of the situation?
The answer is less data and more knowledge.
High-street retailers know they need to find new reasons for people to stay loyal to them. Retail is not just about spending money: you can buy stuff anywhere and more easily than going to a shop. Now is the time to use the knowledge of what people want to rethink the homogeneous nature of the high street and the middle-of-the-road offerings from so many retailers.
Instead of dedicated out-of-town sites and zoned streets, mixed use could help bring life back to retail. Use your store’s space to put on events for your customers and make it part of their community. Stop selling and create something new to complement the digital experience, rather than competing with it.
“Never let a good crisis go to waste,” said somebody once, recognizing the opportunities that can come from difficult times. Procter and Gamble knew this. After the Great Depression, while others were reducing marketing and advertising spend, it did the opposite.
It used its Oxydol soap brand to sponsor a new daytime radio drama called Ma Perkins based on the idea that people would like to be entertained whilst doing housework. The link between brand and show was so strong it became known as ‘Oxydol’s Own Ma Perkins’, ran for 26 years, and was the origin of the phrase soap opera.
Such was P&G’s subsequent investment in radio advertising and sponsorship, it’s been said that the company effectively created daytime radio in the US. That was a good idea born out of knowledge, not data. But ideas can be hard to nurture in big companies that rely solely on data because data won’t tell us if something is a good idea.
Companies start with an idea. In 2021, it’s going to be how companies survive and prosper.