Accurate demand forecasting is the holy grail of planning for any business — especially for fast-moving eCommerce brands. Despite better tools, more data, and smarter teams, most forecasts still miss the mark.
In fact, the average forecast accuracy error across industries is a staggering 49%.
So, why is forecasting so hard—and what can we do about it?
At Kaleidoscope, we're on a mission to help eCommerce brands and product-based SMEs plan smarter. And after decades in demand planning, we’ve seen what works (and what really doesn’t). This post breaks down the biggest forecasting challenges—and shares seven practical tips to make your process more accurate, collaborative and future-proof.
Why demand forecasting is so challenging
Let’s start by getting clear on why accurate forecasting is so elusive. Even with advanced software, AI or Shopify’s built-in reporting, merchants often need external forecasting tools to layer on smarter planning.
1. The real world is full of unpredictable events
Sales don’t just rise and fall based on your product. They’re influenced by everything from Black Friday promotions to weather changes, TikTok trends, site crashes, and local events.
Some of these are recurring. Many are random. Most are hard to model accurately. And when they hit, your forecast takes the fall.
2. Historical data doesn’t always help
If your market has changed—or your product range, audience, or channels—then year-over-year comparisons won’t give you the full picture.
Many still rely too heavily on year-over-year comparisons (this is commonly offered by operations platforms), when recent trends would give a clearer picture. It simply doesn’t reflect today’s reality.
That’s why the best eCommerce forecasting strategies rely on recent trends and flexible thinking—not just last year’s numbers.
3. Software alone won’t fix it
Even best-in-class forecasting tools can only do so much. AI and machine learning need configuration, context, and a huge quantity of clean data. (Which SMEs don't tend to have readily anyway). And even then, they don’t know what’s in your head or what just happened on Instagram.
Technology helps—but smart people make the difference.
4. Human bias gets in the way
We’re wired to see patterns—even when they’re not real. We assume what just happened will keep happening (recency bias). We expect steady trends even when demand moves in spikes and step changes.
Our brains are brilliant—but not always logical. And that can skew your forecast more than you realize.
5. Forecasts are often judged on outcomes, not insight
Sometimes you made the right decision based on the right forecast—but things just turned out differently. That’s life.
The real goal of demand forecasting isn’t perfection. It’s better decision-making.
7 ways to improve forecast accuracy (without losing sleep)
Here’s the good news: while you’ll never predict the future with 100% certainty, you can improve your forecasting process, reduce errors, and feel more confident in your plans.
Here’s how:
1. Log events as they Happen
If something unusual spikes (or tanks) your sales, record it. Keep a simple diary of “events” so you have context next time you’re forecasting. What happened, when, and why?
This builds a smarter, more contextual base for future decisions—and prevents you from guessing later.
2. Use recent trends, not just year-on-year data
The most common forecasting mistake? Relying too much on last year. Instead, look at the last few weeks or months to understand the current trajectory.
Add upcoming events into your forward view rather than trying to strip past events out of your history.
3. Don’t forecast alone—bring in more context
Sales forecasts get better when more voices are involved. Talk to your team. Use qualitative insights. Mix gut feel with data from marketing, ops, and even customer support.
Better forecasts start with better collaboration.
4. Forecast ranges, not just single numbers
Instead of aiming for one “perfect” figure, forecast a range: best case, worst case, expected case. This helps you see risk and opportunity—and plan for both.
Need to order stock? You’ll make better decisions knowing what could happen, not just what might.
5. Re-forecast frequently (not just quarterly)
Markets move fast. Re-forecast when something major happens—whether it’s a campaign, a surprise event, or a big sales shift.
Doing it more often makes the process lighter, faster, and far more useful. Focus on the near future in more detail, and keep the longer-term view broad.
6. Match forecast detail to business decisions
If you place monthly orders, you probably don’t need a daily sales forecast. Use the right level of granularity based on the decisions your business needs to make.
Zoom in where it matters—zoom out where it doesn’t.
7. Accept that forecasting will always involve uncertainty
Even the best forecasters get it wrong sometimes. That’s not failure—it’s reality.
What matters is the process: are you logging data, building context, reviewing outcomes, and adjusting over time?
If so, your forecasts are doing their job—even if they’re not “perfect.”
What does a good forecasting process look like?
A great forecasting process should:
Involve multiple teams and perspectives
Combine data with real-world context
Be reviewed and updated regularly
Focus on decisions, not just accuracy
Be right-sized in terms of time horizon and detail
At Kaleidoscope, we help businesses do exactly that—by making planning more connected, collaborative, and confidence-building through our software.
TL;DR – forecasting for growth
If you're in eCommerce, retail, or any fast-moving product business, forecasting will always be tough. But it doesn’t have to be guesswork.
Use recent data, build collaborative processes, embrace uncertainty, and refocus on decisions—not just numbers. That’s how modern demand planners create flexibility, agility, and impact.
Want to improve demand forecasting and run your sales and stock through Shopify? Join our free Early Access Program now.
Frequently Asked Questions
What makes demand forecasting so hard? Facing unpredictable demand due to fast-moving trends, promotions, and external factors like social media or influencer activity. Forecasting is challenging because historical data may not reflect these real-time shifts, and many stores outgrow simple reports or spreadsheets.
Does Shopify have demand forecasting tools? Shopify provides basic inventory tracking and sales reporting, but it doesn’t include full demand forecasting tools. Users often integrate external platforms like Kaleidoscope to layer smarter forecasting, scenario planning, and risk analysis on top of their Shopify data.
How can I improve demand forecasting accuracy? To improve demand forecasting, Shopify stores can: Use recent trends, not just year-on-year data Log unusual sales events for context Forecast ranges instead of single numbers Re-forecast regularly based on new data Involve multiple teams for a richer view
What is the best tool for demand forecasting? The best tool depends on your store’s size and complexity. Kaleidoscope is designed for small and medium brands and wholesalers who want to move beyond spreadsheets and plan sales and inventory more confidently.