This setting computes a seasonal forecast at the Category level*, then distributes forecasted sales to the Variants.
When an item has 12+ months of sales history, the same time period in prior years is used to determine each variant's % contribution to the total unit sales of the category.
For items with less than 12 months of sales history, the last 2 months of sales are used to determine each variant's % contribution to the total unit sales of the category. Non-replenishable and non-tracked products are excluded from this distribution.
For example, if Variant A contributed 5% of the sales units to Category Z during the period, then Variant A will receive 5% of the category's forecasted sales in upcoming months.
When should you use top-down forecasting?
- When you have enough sales data in categories (more than 12 months), the top-down forecasting can automatically account for spikes in sales.
- It also works for products without long sales history. Top-down forecasting uses the product category pattern to help predict future sales.
Account-wide top-down forecasting
To enable top-down forecasting, go to Account > Settings
> Forecasting and Top-Down as your forecasting method.