Demand Forecasting and Scalable Revenue Growth with Inventory Planner
Inventory Planner helps merchants streamline inventory procedures by forecasting buyer demand for thousands of products in minutes. To dive deeper on how sophisticated inventory management correlates with recouped revenue, we sat down with Jill Liliedahl, the vice president of revenue at Inventory Planner and an experienced DTC founder herself.
Demand Forecasting and Scalable Revenue Growth with Inventory Planner
Inventory Planner helps merchants streamline inventory procedures by forecasting buyer demand for thousands of products in minutes. Users can track KPIs across 30+ platforms, automate reordering processes, and optimize stock across multiple warehouses.
To dive deeper on how sophisticated inventory management correlates with recouped revenue, we sat down with Jill Liliedahl, the vice president of revenue at Inventory Planner and an experienced DTC founder herself.
When to Bring In the Pros
As Jill describes it, Inventory Planner’s core objective has always been to help merchants avoid lost revenue—filling a gap in the market for a tool that can accurately predict customer demand for upcoming restock cycles.
As a result, the IP team empowers businesses to avoid two sunk-cost scenarios: running out of inventory (and thus potential revenue) and drowning in overstock that clogs up the broader product pipeline.
Inventory Planner is especially helpful for younger startup teams, typically composed of experts in product development, marketing, or other consumer-facing areas, as opposed to team members who work in the “back office” and manage vendors, as Jill describes them.
Thus, by using Inventory Planner’s platform, these growing ventures (annual revenue starting at $1 million) can continue to direct resources to their areas of expertise, allowing Inventory Planner to save them time, confusion, and capital.
According to Jill, early-stage businesses can typically manage a great deal of inventory by winging it in Excel spreadsheets. But after hitting the first million ceiling, brands typically find it’s time to restructure.
They’re ready to introduce new, heavy-duty tools for efficient inventory management, rather than trying to throw more bodies at an ever-growing task.
“Even if you’re not in dire straits with declining revenue, everybody can use this degree of efficiency and insight into managing their ecommerce inventory.”
Right Products, Right Time
- Running out of stock—and thus losing revenue—because they can’t work out the right numbers
- Wasting too much time and effort trying to predict inventory needs
- Sitting on too much stock sitting on warehouse shelves
Before arriving at Inventory Planner, many of these businesses are running on spreadsheets, in an attempt to calculate what stock is on hand and how much will be needed.
But, as a former Inventory Planner user herself, Jill admits that many early, founding teams are also simply employing guesswork when forecasting. Her own barebones inventory system mainly consisted of walking around warehouses to suss out what her team needed to restock.
Flash forward to today where these businesses are working with the IP team and are now running sophisticated formulae and inventory tracking.
As Jill puts it, regardless of annual revenue or maturity, businesses can introduce Inventory Planner to upgrade inventory operations and subsequently maximize revenue, in a way that most founders do not realize is possible beforehand.
“We help establish or level up merchants’ inventory operations, as well as help them become more efficient at the broader process. Many don’t realize how much better off they’ll be for it.”
Inventory Metrics Primer
When asked how brands can easily begin to optimize their inventory management, Jill mentioned two fundamental metrics to track.
In order to best isolate and define problematic trends in your inventory management, the IP team recommends tracking the forecasted lost profit as a KPI, or the projected amount of lost revenue that’ll be incurred if a restock order isn’t placed.
On the other end of the spectrum, as previously mentioned, brands can also identify overstock across warehouses and receive recommendations from the IP team on how best to liquidate, free up inventory, and so on.
Jill says new clients are often taken aback by the degree of stagnant stock, or unrealized cash, they’re sitting on.
Overall, keeping a pulse on forecasted lost profit will allow brands to regularly answer questions — from “How much will we lose without this item?” to “How much money can we redirect if we move this tied up product?” — with precise metrics, as well as jump-start the search for a solution.
And on the other side of the same coin, the IP team advises understanding the replenishment profit on any potential reorders, essentially gauging the ROI on restocking any SKU, which helps businesses understand how funds and tasks should be delegated accordingly.
“If you go all in on improving your inventory maintenance—whether that’s with us or not—you’ll see healthier cash flow and product turnover.”
- What to pledge
- How to improve
- Which tools will set you up for success
I think the most important thing brands can do in 2023 is to better manage their customer data—both ethically and effectively. There’s an opportunity for brands to know their customers better than ever before—a clear benefit for both the customer and the brand. When you manage your data correctly, you’ll create stronger and more personalized ads, creative, site experiences, and so much more.
This is a classic: Let the data guide you. Go where the buyers for your products are and communicate with them on a personal level (i.e. by persona and funnel position) and nurture those relationships (past, present, and future customers). It’s possible—all through data.
We recommend that Shopify brands analyze and update their websites using data-driven decisions. Using analytics tools such as heatmaps and scrollmaps can help brands better understand how customers are interacting with their store.
Store owners tend to make assumptions about the way customers interact with their website. Most never go back and analyze their design choices to find pain points or areas of opportunity. By using heatmaps and scrollmaps, they can see where real customers are clicking and concentrating their attention. Leveraging this data, brands can start to iterate on design and make their online store experience streamlined and intuitive.
Hotjar provides a simple way to implement heatmaps, scrollmaps, and recorded user sessions on your site, helping you acquire incredibly informative user data. Additionally, it gives you the ability to create on-site surveys, which allows you to obtain direct and often critical feedback from users about their experience.
Test various attribution models and analyze the impact on your business. At Fifty Six, we are always here to help our clients identify and optimize their approach—a critical step in any successful marketing strategy.
If I’ve said it once, I’ve said it a million times–Customer Lifetime Value. And even more importantly, Future Lifetime Value (FLTV). With the ever-growing importance of first-party data, it is crucial that brands take a good look at their CRM and FLTV metrics.
OrderlyEmails is our go-to tool for transactional emails. It helps us level up our brands’ email aesthetics with customizable, quick-to-implement Shopify templates.
Lately, I’ve been really interested in Smile.io’s loyalty platform. Their UX is fantastic for teams with low bandwidth!
Stop allocating budgets to low-hanging fruit that doesn’t move the needle on conversion. Think about what’s really going to improve your CX and the return of undertaking different initiatives—not just on what’s top on your list of bugbears on the site!
One of the best ways to understand your customer behavior is by using HotJar. Their heat-mapping and screen recording tools shine a light on where customers are navigating to and from on your site, where they're rage clicking and experiencing frustration, and where conversion is dropping off within real life customer journeys and flows!
Understanding your customers’ pain points via data and analytics , will allow you to work with your CRO/CX Agency to solve customer frustrations and improve conversion.
Rewind backs up all product, customer, and order data for Shopify sites—essential since Shopify itself doesn’t provide this solution. It's saved so many of our clients time and money from administrative accidents.
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33% of customer service inquiries are pre-sale questions. What does this mean? If you’re not investing in customer service, you’re missing out on revenue-generating opportunities.
The benefits of elevating your customer experience:
- 10% to 25% increase in AOV for customers who engage with live chat pre-purchase
- 21x higher conversion rate for customers who reach out via Live Chat or SMS compared to other site visitors
- 87% of customers who have a great customer experience will make another purchase
- 72% of customers share positive experiences with 6 or more individuals
Gorgias is our favorite Helpdesk platform. They can reduce costs by 35%, primarily by decreasing the average ticket handle time. Their machine learning algorithms are trained on millions of ecommerce-related interactions across Gorgias’ customer base and provide accurate, automated replies for the most common ecommerce inquiries. This helps our agents resolve tickets faster, which provides the customer a seamless experience.
Trust your agency! Agencies do the same things across multiple brands and niches, so we see the trends and have the practice and experience!
Don't be afraid of data and insights. If customers aren't clicking on your emails, try a new CTA. If your ads are driving good metrics at a small spend, start scaling. If your customers are complaining about a product, look into QA! If the data tells you something isn't working, let it go and try something else!
I'm supposed to say Tydo, right? 😉
Double down on differentiation. There will be a lot of headwinds this year and standing out from the crowd will set you apart.
A picture is worth 1,000 words. A video? Probably millions. In ecommerce that value translates into engagement, acquisition, and retention—everything you need to impact your bottom line.
At soona, we've seen the we've seen the impact of creative and the continuous split testing of it yield results. Our resolution is to challenge ourselves and double down on innovation and creative optionality so that each brand we work with can distinguish themselves in a crowded sea of D2C ecomm. We'd love to see our brands share this resolution and keep pushing the creative limits.
Klaviyo. We're using it to power our email and newsletter at soona too!
Optimize your returns strategy! This can lead to valuable customer insights, enhanced user experiences, and increased revenue and customer loyalty.
Brands need to dive deeper into understanding their customers to set themselves up for success. Conduct research to gain insights into customer needs, preferences, and behaviors. By doing so, you can develop targeted strategies that will enhance customer experience and boost overall retention.
Right now I would say Gorgias. Having a good customer service tool is crucial to building strong customer relationships.
Start paying heavy attention to data, specifically around retention. We see a lot of effort put towards acquisition with the assumption that once someone buys, they are your customer forever. Instead, get to know your customer, understand their needs, and analyze their behaviors once they are on-site and judge their sentiment after they have visited. Work with a retention focused and data-driven agency to implement tools that contribute to repeat business and customer delight. It will pay dividends.
When surveyed, about 80% of ecommerce merchants think that they are delivering a great experience to their customers. However, when the same customers are surveyed, only 8% of those customers think that they are getting a great experience from the merchant. Now, more than ever, retaining loyal customers is an essential part of any online business and you should spend time with your customers to judge their experience with your website and products and offer improvements based on that feedback.
Tydo's report cards are an essential tool, along with Klaviyo for email and SMS, Recharge for subscriptions and memberships, Okendo for reviews and surveys, Rebuy for AI driven collections and upsells, Loop for self service returns... each tool is great on their own, but their strength as the ultimate tool comes from when they are used together!
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Report Cards is a customized glimpse into your business, delivered to your inbox for free.
Report Cards consolidates all your key metrics across platforms for an at-a-glance pulse of your business.
Discover metrics for every team member so they can stay updated with the right data on a daily, weekly and monthly basis.
It's free because we believe everyone should have access to the basics.
Portfolio is a hub for analytics across multiple Shopify stores. The perfect tool for agencies.
See an aggregate view of all your data for all your stores in one place.
Make real time assessments on marketing initiatives across every storefront you manage.
Analyze the performance of one store versus another in seconds.
More about the project
Here at Tydo, we try to highlight DTC founders who run their business in various ways. And, that's because there's no "right" way to run a DTC brand.
This project illustrates exactly that. Whether it's how a founder supports their team or how they talk about mental health in the workplace, every founder has a different approach. How do they discover these different approaches? One way: reading. Discover the greatest books that have changed the way 15+ founders think about or operate their business.
You can also listen to these book picks on Spotify or Anchor.fm.