The impact of COVID 19 on our industry will be far-reaching and measured for years to come. What will business look like when we return, how will customers respond, and what level of staffing will you require to serve your customers? While there are lots of uncertainties at the moment, here at Fourth, we are focused on how to best support your reopening efforts and providing direction on how to forecast for success going forward.
Impact on the Fourth Forecasting Algorithm
Using Fourth’s forecasting solution? Fourth’s forecasting engine relies on historical sales data to predict future outcomes. As such, the recent and extensive closures will impact the effectiveness of the forecast algorithm as it will not have recent sales data to draw on. Manager experience will play a crucial role in building accurate sales forecasts in the short term. As sales begin to resume, managers should apply their local observations to regular weekly re-forecasting. Since the shape of the day will be mostly unaffected, adjusting the daily values to appropriate levels should yield acceptable accuracy.
The algorithm seeks to strike a balance between recent and last year’s sales to create an accurate forecast. During the initial reopening period, recent sales (which includes data from the closure period) will have a higher weighting than last year’s sales. Over time, and with the input of manager-adjusted recent sales data, the algorithm will automatically determine the optimum weighting between previous year’s sales and recent sales applying greater weight to the period that best reflects current sales.
Please note that new locations with limited historical data and a closure period of eight weeks will not see a forecast until at least one week of sales are recorded.
Testing for Accuracy Going Forward
Throughout the remainder of 2020, Fourth will test different methods of documenting notable days to find the best approach for ensuring accuracy in 2021. We will benchmark the results and automatically implement the version with the highest level of accuracy based on historical data. We will continue to communicate our findings and share best practices so that you can get back to the reliable forecast you have come to expect from Fourth.
5 Ways the Employee Scheduling Software Can Aid Your Communications and Smooth Out Business Operations
In a fast-paced environment such as retail, managers want daily operations to run as smoothly as possible. However, gaps in the internal communication flow can lead to frustrated employees, poor service, and increased turnover.
Metrics matter. Understanding which ones you need to care about can have a big effect on your bottom line. It’s up to operational leadership to measure them, monitor them, and make them not only the focus of their annual initiatives – but to make those metrics important for restaurant managers too.
Using spreadsheets for hospitality inventory management is inaccurate, inefficient, and unwise. Learn how poor inventory management could be making operators crazy and hurting your business.