Why are Store-Specific Forecasts so Important?

Generating forecasts by store using sales data collected by store is the only way to accurately determine sales patterns that reflect the unique sales environment that each store represents. While it is possible to aggregate sales data from groups of stores for forecast generation, this approach tends to adopt general sales trends across the stores thereby losing valuable insights that can be gleaned by analyzing store-specific data.

Many systems tend to aggregate data from groups of stores and then use it to generate a single forecast for the group. Sales volumes are then summed and averages computed resulting in skewed forecasts as a result of normalization.

The same holds true when aggregating item by item sales into overall department sales and then producing a single forecast for the department or the category. Unique aspects related to a single item's performance are then lost.