Estimate Demand and Order Quantity for a New Product Launch
There is a new product being launched by my vendor. How do I estimate how much to order for the first few months till I get sufficient guest history?
Business Problem
A new product line is being launched by the vendor, and the business needs to decide the initial order quantity. Since there is no sales history for this product, over-ordering can lead to excess inventory and wastage, while under-ordering could cause stockouts and missed revenue opportunities. The goal is to use Zenoti’s data and operational insights to estimate initial demand based on historical trends, related product sales, and service usage patterns.
Business Conditions
The business uses Zenoti Inventory Management.
All existing retail and backbar products are categorized correctly in Zenoti.
The salon/spa tracks service-product associations (for color, facials, etc.).
Vendor lead times and minimum order quantities are known.
Staff are trained in using Zenoti Inventory and Purchase Order modules.
Zenoti Solutions
Enhance your Master/Admin Management
Classify the New Product Properly:
Create the product in Zenoti under the correct category (e.g., Hair Care → Serums).
Tag it as New Launch to enable easier tracking and reporting later.
Link Products to Services (if applicable):
If the product is used in a service (e.g., hair color, treatment cream), associate it with that service in Zenoti.
This will help estimate usage per service frequency.
Determine Comparable Products:
Identify similar SKUs from the same or related category (e.g., similar size/color/treatment type).
Use their historical sales and consumption data as benchmarks.
Check if this new product being introduced will cannibalize an existing product. Adjust the order quantity of the existing product, if required.
Get Discovered and Capture Attention (Marketing)
Pre-launch Campaigns to Gauge Interest:
Run a “Coming Soon” campaign for loyal guests via Email/SMS.
Offer pre-booking or product reservation to measure potential demand.
Example:
“Be the first to try our new [Product Name]! Limited stock available — reserve yours now.”
In-salon Teasers:
Promote the product on mirrors, reception counters, and CMA banners to capture early interest.
Employee Trials:
Allow a small internal batch for staff usage. Track staff enthusiasm and feedback — this is a strong indicator of guest acceptance.
Ask the stylists to list out their regular guests who might be interested in this new product.
Making your Booking Easy and Effective
Service Association Tracking:
For service-linked products (e.g., color, treatment add-ons), use Zenoti to record product consumption per service.
Example: If “Keratin Serum X” is used for every “Smoothening Service,” check historical smoothening frequency.
Product Upsell at POS:
Create a prompt in POS for stylists to recommend the new product after a related service.
Track conversion rate over the first few weeks — this data will refine your reorder forecast.
Improve Online Presence
Webstore/CMA Listing:
Add a dedicated “New Launch” section with high-quality images and clear product benefits.
Encourage online pre-orders:
“Limited launch stock — order yours now!”
Push Notifications:
CMA Message Example:
“New arrival! Get your hands on the latest [Product Name] before it sells out.”
Social Media Buzz:
Share educational content: product benefits, ingredient highlights, and stylist testimonials.
Employee Management
Stylist and Therapist Education:
Train staff on the new product — usage, benefits, and ideal guest profile.
Enable confident recommendations at POS and service consultations.
Employee Incentive Programs:
Reward staff for first-month product upsells to drive trial and generate early data.
Example: “Sell 5 units of [Product Name] and earn a ₹500 bonus.”
Retain, Reward, and Manage Guests
Sampling Program:
Offer product samples to top-tier loyalty members. Vendors may have sample trial packets of smaller size.
Track conversion rate from sample to purchase to predict wider acceptance.
Feedback Collection:
After purchase, trigger automated feedback requests in Zenoti to assess guest satisfaction.
Cross-sell with Services:
For example, bundle new hair serum with “Post-Color Care Packages.”
Use Zenoti’s service bundle setup for these combinations.
Track, Measure, and Scale with Reports and Dashboards
Step 1: Estimate Initial Demand Using Comparable Data
Use the Product Sales Report to find average monthly sales for similar products (e.g., same brand or category).
Formula:
(Average Monthly Units Sold for Similar Product) × (Estimated Adoption Rate)
For new product adoption, assume an Adoption Rate: For example
20–30% adoption in month 1
40–50% adoption in month 2–3
Step 2: Adjust for Service Usage (if applicable)
Use the Service Consumption Report to see how often related services are performed monthly.
Estimate per-service product consumption (e.g., 50ml per service × 100 services = 5L/month).
Step 3: Finalize Initial Order
Combine estimates from both product sales and service usage to determine safe starting inventory.
In case there is a similar existing product, estimate the sales due to guests upgrading from the existing product
Add 10–15% buffer stock for launch excitement or marketing campaigns.
Step 4: Monitor and Refine
Review these Zenoti Reports weekly during the first 8 weeks:
Product Sales Report – track daily and cumulative sales. Calculate Rate of Sale per week and see the trend
Inventory Consumption Report – for service usage volume.
Product Order Report – track reorders and avoid overstocking.
Campaign Effectiveness Report – if linked to promotions.
Contingency Plan (If things don’t go as expected)
If sales are slow:
Run staff demo days or bundle the product with popular services.
Offer introductory discounts or loyalty redemption options.
If stockouts occur:
Use Zenoti’s Low Stock Alerts to trigger auto-purchase requests earlier.
Prioritize reorders of top-moving SKUs.
If guest interest is low:
Collect feedback via stylists or surveys to identify hesitation (price, awareness, usage).
Mitigation Plan (If things go wrong)
If overstocked, create “Gift with Purchase” bundles or use products for in-salon treatments to reduce excess.
If feedback indicates product mismatch, request vendor exchange or convert retail units for internal service usage.
Conduct a post-launch review in Zenoti after 60 days to recalibrate reordering patterns.
Continue adjusting reorder points using real usage data as the guest history builds.