What is Demand Intelligence?
In today's fast-paced business environment, having a clear understanding of market demand is crucial to staying ahead of the competition. Demand intelligence provides businesses with just that — the ability to anticipate and respond to shifts in demand with precision.
By leveraging machine learning and predictive analytics, PredictHQ’s AI-powered platform empowers businesses to optimize their operations and gain a competitive edge. From streamlining supply chain management to personalizing marketing campaigns, the benefits of demand intelligence are far-reaching.
Below, we explore what demand intelligence is, how it works, and the benefits it provides businesses of all sizes. We will also discuss some of the most common use cases for demand intelligence and how you can use it to improve your business.
What is demand intelligence?
Demand intelligence is used by businesses to make better decisions about the future by being incorporated into demand forecasts to ensure they are as accurate as possible. Demand forecasting is the foundation for successful business. It’s the difference between yield and waste. Between growth and struggling. It’s make or break. It’s also really hard.
Demand forecasters today have better tools than ever to help them know how fluctuations in demand will impact their business and how to deal with these changes. What’s been missing from demand forecasting is the ability to know the why behind each anomaly. Knowing the why is crucial. Without it, teams can’t proactively predict demand spikes or reliably make the best decisions. They have to guess what caused a sudden demand increase and hope to be better prepared for it next time. But even the best guessing often leads to errors, and you can’t guess your way to a successful global business.
Demand intelligence unlocks that why. It’s breakthrough context that reveals why your demand fluctuates – so you can take control. Specifically, demand intelligence predicts how local events will impact consumer demand patterns. Demand intelligence transforms uncertainty into actionable insights, to optimize pricing, inventory levels, marketing campaigns, and more.
Demand intelligence means being able to see what’s coming – so you’re always prepared
Events influence over $1.1 trillion in consumer spending annually. However, tracking these events and understanding their impact on demand patterns has been a daunting task for businesses. This is where demand intelligence shines, capturing and analyzing 19 categories of events—from concerts and conferences to holidays and severe weather.
The dynamic nature of these events poses significant challenges. Businesses often struggle to predict and prepare for the events that directly impact their bottom line, especially when multiple events converge. This lack of visibility can lead to missed revenue opportunities, supply chain disruptions, operational inefficiencies, and dissatisfied customers.
Demand intelligence overcomes these challenges with machine learning and predictive analytics. Machine learning (ML) algorithms sift through vast quantities of data to uncover patterns and relationships, while predictive analytics then leverages these patterns to generate future demand forecasts.
This can be done at various levels of granularity, specific to one or hundreds of business locations. Businesses use these insights to see into the future to scale up their demand forecasting, dynamic pricing, supply chain management, inventory levels, workforce planning, and marketing campaigns with reliable precision.
How demand intelligence works
Demand intelligence leverages a sophisticated data processing pipeline, transforming raw event data into precise, reliable, and actionable insights. This comprehensive process ensures businesses can make informed decisions based on high-quality data. Here’s a closer look at the steps involved:
Data Quality
1. Aggregate: Event data is sourced from hundreds of public and proprietary sources, ensuring a wide array of events and a rich dataset for analysis.
2. Standardize: Raw data is converted into a standard format, ensuring consistency across the dataset, which is crucial for seamless integration into various models and systems.
3. Deduplication: Duplicate events are identified and combined into a single, reliable event, eliminating distortions in data that negatively impact forecasting accuracy.
4. Filter: Machine learning algorithms filter out spam, add-ons, and irrelevant data, ensuring that only high-quality, impactful events are included. Approximately 30% of raw event data is filtered out as spam.
Data Enrichment
5. Geocode: Each event is accurately located using latitude, longitude, and timezone tags. This precise geocoding is essential for understanding the local impact of events.
6. Enrich: Additional contextual data, including information from hundreds of proprietary sources, is added to provide deeper insights into each event. This enrichment includes details such as venue, performer details, predicted attendance, predicted event spend, and more.
7. Event Time: Start and end times for events are confirmed or accurately predicted. Knowing the exact timing of events helps businesses prepare for demand fluctuations.
8. Predicted Attendance: Unlike simplistic methods that use venue capacity, demand intelligence models accurately predict attendance based on historical data and contextual information. This provides a realistic estimate of how many people will attend each event.
9. Rank: Events are ranked based on their predicted impact using a logarithmic scale from 0 to 100. This ranking helps businesses prioritize which events to focus on.
Prediction
10. Correlate: By correlating historical event data with your business’s demand patterns, we identify which events significantly impact your operations. This allows businesses to understand the causality behind demand spikes.
11. Precision Prediction: Our precision prediction capabilities enable businesses to forecast demand with even greater accuracy. This includes making strategic decisions around staffing, dynamic pricing, and supply chain optimization.
Delivery
12. Customer Integration: Clean, accurate, and intelligent data is delivered directly to you via our API, notifications, control center, or data exporter. This ensures that you have easy access to the insights needed to drive your business forward.
By leveraging this robust data processing pipeline, demand intelligence transforms raw event data into refined, actionable insights. This enables businesses to optimize operations, reduce costs, and increase revenue by making informed decisions based on high-quality, enriched event data. Demand intelligence is not just about predicting the future; it's about empowering businesses to master it, ensuring they are always a step ahead of demand volatility in an ever-evolving marketplace.
6 key advantages of using demand intelligence
Demand intelligence finds applications in every industry, from accommodation, restaurants, transportation, and much more. The ability to predict demand fluctuations and respond proactively is not just a competitive advantage but a necessity in today's market. Below are six examples that demonstrate the versatility and power of demand intelligence:
1. Align inventory levels with incoming demand: By understanding how events will impact demand in advance, businesses can adjust their supply chain and inventory levels accordingly. For example, a large QSR chain with thousands of stores worldwide used demand intelligence to achieve a 2.74% accuracy improvement to their food and beverage sales forecast, which resulted in an estimated $1.5K in annual benefits per store through improved product availability in stores. Learn more about supply chain planning with demand intelligence.
2. Enhance targeting marketing: Demand intelligence can help businesses target their marketing campaigns more effectively by identifying the events that are most likely to generate leads and sales. This allows businesses to spend their marketing budget more wisely and get a higher return on investment. Discover how Maple Tree Marketing leverages demand intelligence to elevate strategic marketing insights.
3. Optimize dynamic pricing: Provide more accurate pricing recommendations in response to changes in demand along with context to pricing changes. One national parking company is using demand intelligence to expand event data coverage eight fold, increase parking conversion and increase serviceable market, driving about $2.8-5.6M in total annual benefits. Find out how ParkMobile uses demand intelligence to boost parking reservations.
4. Right-size staffing levels: Businesses use demand intelligence to optimize their labor schedules by accurately predicting the times when demand is highest and lowest, which can improve customer service and reduce costs. By successfully incorporating demand intelligence, a leading US pizza chain improved their daily sales forecast accuracy by 3-10%, allowing them to optimize store labor scheduling and save millions of dollars. Learn more about optimizing staffing with demand intelligence.
5. Enable AI models with contextual real-world data: AI models don’t operate in a vacuum. With a deeper understanding of the world around them, your AI models can power more informed decisions. Companies across industries are using this data to unlock higher levels of model accuracy and revenue. Discover how to use demand intelligence to empower your AI models with real-world context.
6. Improve customer service: The accommodation industry uses demand intelligence to offer promotions and packages tied to local events that are of interest to their guests, such as including discounted tickets to certain events if guests book a certain number of night stays, or room discounts for additional night stays after event ends if it coincides with an expected low occupancy days. Learn more about how hotel operators leverage demand intelligence.
Harness the power of demand intelligence to stay agile in a dynamic marketplace
Demand intelligence is transforming the way businesses approach demand forecasting and operational planning. By leveraging sophisticated data analytics and predictive modeling, companies can take the guesswork out of understanding the factors driving demand fluctuations. This tool not only optimizes forecasting and operations but also empowers businesses to capitalize on opportunities they might have previously missed.
With the ability to align inventory, enhance marketing strategies, optimize pricing, and improve customer service, demand intelligence provides a comprehensive solution to the challenges of modern business. Embrace demand intelligence to stay ahead of the curve and ensure your business thrives in an ever-changing market.
