Demand Forecasting for Valentine’s Day

Seeing all the hearts, red colour and Valentine’s Day sale ads in the papers got me and my marketing mind thinking. One of the first thoughts that struck me was that Archies was the pioneer in India in popularizing the concept of Valentine’s Day. All others took the bait and followed suit a few years later and today everyone has jumped onto the bandwagon as it is a commercial opportunity that cannot be missed. So be it a florist or jeweler or a retail chain or a pub/lounge, everyone is out there to make a kill and rightly so….after all if you don’t take that opportunity, someone else would.

While for most others, there is not too much of a need to change their merchandise mix too much other than packaging the entire concept in a different way, but when it comes to the pioneer itself – Archies, the game changes a bit.

For Archies, planning for this activity would be a mammoth task, starting months in advance, deciding on what all gift items to procure, in what quantities and from which vendor/country.

This is where the big challenge comes in – Demand Forecasting. This is also the core idea behind my blog as I got intrigued by just thinking about it.

I mean how does one forecast for such an event?

One cannot apply a simple formula like other companies, where you assume a certain growth percentage. It does not work like that in such a scenario. Following questions are hovering in my mind:

• How does one know how many people would be in a relationship next year and how many would not? How many people who are in a relationship this year may not be in one by next year and may not be celebrating?
• How does one know how many people would have found that special someone, with whom they would want to celebrate Valentine’s Day?
• What is the number of married people who would want to celebrate this one day of love?
• Even if people are in a relationship/or have got into one, how do we know whether they would be keen to celebrate this concept or idea or not?
• How does one figure out that what is the amount that those people who are celebrating this day would be willing to spend?
• What is the number of gifts/cards that they would pick up?
• How many soft toys with love messages should be ordered? Similarly how many love or Valentine cards should be ordered?
• How do you further plan this for each of the store for each of the city? How do you know which city or which area will have more people flocking to that Archies store to pick up something for their Valentine?

The counter response to some of the questions that I have raised above could be that, the same is true for any other category or occasion. To some extent, that is right, but in most cases, the merchandise can be used even later or after the occasion is over, but unfortunately that does not work mostly in such a case.

I don’t have answers to the questions raised above, so if some of you know it, please do let me know and I would be glad to figure this out. And if you guys are also intrigued and are looking for answers to these, then maybe this is an interesting material for a case study to decipher how Demand Forecasting is done for Valentine’s Day.