What is top-down forecasting?

Top Down This setting computes a seasonal forecast at the Category level*, then distributes forecasted sales to the Variants. The last 2 months of sales are used to determine each variant's % contribution to the total unit sales of the category. For example, if Variant A contributed 5% of the sales units to Category Z during the last 2 months, then Variant A will receive 5% of the category's forecasted sales in upcoming months. *Note: if a category has less than 12 months of history, forecasts are first computed at the store-wide level then distributed to the Variants. Top Down Seasonal 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, we default to the top down, non-seasonal method. For example, if Variant A contributed 5% of the sales units to Category Z last December, then Variant A will receive 5% of the category's forecasted sales for next December. 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.

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