What is retail demand forecasting?

Retail demand forecasting estimates future sales by item, store/cluster, and channel so you can buy, allocate, price, and staff with confidence. Modern approaches blend machine learning with causal signals (promotions, price, seasonality, holidays, weather, local events) and handle edge cases like new items (analogs) and intermittently-selling SKUs. Good systems produce probabilistic forecasts (not just a single number), expose accuracy and bias KPIs, and let planners run scenarios (what-if price drops 10%?). The payoff: fewer stockouts/markdowns, tighter OTB, and faster reaction to demand changes.