As the COVID-19 pandemic continues to take its course around the world, navigating the ups and downs of consumer demand for goods and services can be a difficult task for any organisation. For some sectors of the economy the taps shut-off almost overnight (e.g. international travel/hospitality) for others there have been newly found shoots have emerged (e.g. home entertainment devices and subscriptions) and for other sectors demand could be described as ‘sporadic’, ‘peaky’ or ‘trickle’ based on consumer behaviour, sector specific issues or jurisdiction regulations related to the pandemic.
Businesses are grappling with what their demand profile will look like in the medium-long term in a way they haven’t had to in the last decade, with all asking the question – how might we best navigate the inertia of our current outlook and best plan for the road ahead?
For many organisations, the COVID-19 health crisis has been an event that has disrupted business planning and production cycles, driving a re-evaluation of demand planning functions. Demand functions typically rely on comparable data sets to drive forecasting and subsequent planning, however the peaks and troughs in demand triggered by this external event could not be predicted through existing processes. With businesses experiencing a step-change in demand rather than incremental, traditional forecasting functions begin to shift toward scenarios to facilitate better planning.
A framework for navigating inertia: Demand Types
As businesses are experiencing a spike or collapse in their demand, they are also evaluating whether this change will be sustained or temporary. Observing these movements, organisations can approach demand in four major categories depending if its demand loss or gain and if it’s permanent or temporary.
When thinking about the types of demand and observing how it can impact your organisation, there are several questions that can be explored to better understand your business and its proposition to consumers.
Demand orientation: Questions to explore