Accurate sales forecasting is key to achieving your business goals and planning for short-term inventory needs. Setting unrealistic sales targets can be demoralizing, while setting achievable targets can be a team-building moment.
In this guide, we’ll explore how By the Numbers uses machine learning to forecast sales on Shopify and how you can track and use this data to benefit your business.
We use a machine learning process to forecast time series data based on an additive model that takes into account non-linear trends, yearly, weekly, and daily seasonality, and holiday effects.
This means that sales can be accurately predicted even if they have strong seasonal variations, with just a few seasons of historical data.
The model is robust to missing data, shifts in trends, and typically handles outliers well.
On the Insights page, the forecasted amount is displayed in the top left for the current period:
This value represents the total sales forecast for the period, including both realized and unrealized sales. The solid blue line represents realized sales for the period, while the dotted blue line shows the forecasted sales remaining in the period.
The best way to use sales forecasting is through the Goals feature. Here, you can set a metric to track over a certain period, such as monthly sales. For more information on how to set up and track your goals, see our Goals documentation.