Sales Forecasting With Snowflake Cortex ML Functions

1. FORECAST: SNOWFLAKE.ML.FORECAST function enables businesses to forecast the metrics based on historical performance. You can use these functions to forecast future demand, Pipeline gen, sales, and revenue over a period.
2. ANOMALY_DETECTION: SNOWFLAKE.ML.ANOMALY_DETECTION function helps flag outliers based on both unsupervised and supervised learning models. These functions can be used to identify the spikes in your key performance indicators and track the abnormal trends. 
3.  TOP_INSIGHTS: SNOWFLAKE.ML.TOP_INSIGHTS function enables the analysts to root cause the significant contributors to a particular metric of interest. This can help you track the drivers like demand channels driving your sales, and agents dragging your customer satisfaction down.

In this article, I will focus on exploring the FORECAST function to implement the time series forecast model to estimate the sales for a superstore based on the historical sales.

Data Setup and Exploration

For the purpose of this article, we will use the historical Superstore Sales data along with the holiday calendar. The following code block can be used to create both the tables being used in this article and visualize the historical sales data.

CREATE OR REPLACE TABLE superstore.superstore_ml_functions.superstore_sales(
 	Order_Date DATE,
	Segment VARCHAR(16777216),
	Region VARCHAR(16777216),
 Category VARCHAR(16777216),
 Sub_Category VARCHAR(16777216),
	Sales NUMBER(17,0)
);

CREATE OR REPLACE TABLE superstore.superstore_ml_functions.us_calender(
 	Date DATE,
	HOLIDAY VARCHAR(16777216)
);

select * from superstore.superstore_ml_functions.superstore_sales where category = 'Technology';

Having explored the historical sales, I would train the forecast model based on the last 12 months of sales. The following code can be used to create the training data table.

CREATE OR REPLACE TABLE superstore_sales_last_year AS (
 SELECT
 to_timestamp_ntz(Order_Date) AS timestamp,
 Segment,
 Category,
 Sub_Category,
 Sales
 FROM
 superstore_sales
 WHERE
 Order_Date > (SELECT max(Order_Date) - interval '1 year' FROM superstore_sales)
 GROUP BY
 all
);

Train the Forecast Model

SNOWFLAKE.ML.FORECAST SQL function can be used to train the forecast model based on the historical data, in this section we will create a view to be used as a training dataset for technology sales and train the model.

CREATE OR REPLACE VIEW technology_sales AS (
 SELECT
 timestamp,
 sum(Sales) as Sales
 FROM
 superstore_sales_last_year
 WHERE
 category = 'Technology'
 group by timestamp
);

CREATE OR REPLACE SNOWFLAKE.ML.FORECAST technology_forecast (
 INPUT_DATA => SYSTEM$REFERENCE('VIEW', 'technology_sales'),
 TIMESTAMP_COLNAME => 'TIMESTAMP',
 TARGET_COLNAME => 'SALES'
);

SHOW SNOWFLAKE.ML.FORECAST;

Creating and Visualizing the Forecasts 

Having trained the forecast model, let’s use the following code block to create predictions for the next 90 days. 

CALL technology_forecast!FORECAST(FORECASTING_PERIODS => 90);

-- Run immediately after the above call to store results!
CREATE OR REPLACE TABLE technology_predictions AS (
 SELECT
 *
 FROM
 TABLE(RESULT_SCAN(-1))
);

SELECT
 timestamp,
 sales,
 NULL AS forecast
FROM
 technology_sales
WHERE
 timestamp > '2023-01-01'
UNION
SELECT
 TS AS timestamp,
 NULL AS sales,
 forecast
FROM
 technology_predictions
ORDER BY
 timestamp asc;

The trend line in YELLOW in the above chart visualizes the predictions for the same in the next 90 days.

Conclusion

In the end, in this article, we have explored the SNOWFLAKE.ML.FORECAST function to build an LLM forecast model for a superstore sales prediction, visualized the historical data, created necessary training datasets, build the forecast model, and visualized the estimations. As a next step, I would recommend continued exploration of the Snowflake Cortex framework to build multiple forecast models based on dimensions, anomaly detection, and top insights based on in-house large language models.