For retail and many other industries, demand forecasting has been an important and frequently utilized solution due to its ability to capture and combine historical trends with key factors to estimate future demand. However, while forecasts are usually accurate when driven at a macro level, accuracy falls off rapidly as one drills down into specific segments.

Unfortunately, more actionable forecasts usually occur at a micro level. The ability to drill down to a more granular level and explain the nuanced demand in individual markets is key for district and store managers to understand where their business is succeeding and failing. Essentially, granular demand forecasts have the potential to be the most impactful, but are often the most challenging to model and are ripe for techniques like Machine Learning to solve.

H&R Block saw this as an opportunity to resolve longstanding gaps & gain a deeper understanding of what drives their business when it approached Neal Analytics with two goals: construct an advanced analytics solution to better forecast the total number of tax returns in the 2018 tax season, and gain a deeper understanding of the contributing factors driving that demand. On the surface, this appears to be a simple demand forecasting problem, but when you consider that H&R Block has the most seasonal demand in the S&P 500, or that traditional customer factors are not realistic predictors, this posed a unique and interesting challenge. Neal Analytics was eager to support where H&R Block had yet to succeed with other consulting firms or using internal teams.

Leveraging industry expertise

Given the limited timeline leading up to the 2018 tax season and the need to develop a sophisticated machine learning solution quickly, Neal Analytics targeted specific forecasting and business goals to quickly build an enterprise grade solution for critical milestones, leading to use in the 2018 tax season. By using Neal Analytics’ forecasting tools and leveraging H&R Block’s industry expertise, Neal Analytics provided H&R Block with accurate forecasts earlier in the tax season, as well as an in depth look at the key drivers of their complex business, thus enabling tactical adjustments to maximize performance in each company district.

Predicting an evolving market

The tax preparation industry is an established, yet due to culture shifts and technology innovation, constantly evolving ecosystem in which H&R Block has been a major player for over 60 years. With the growth of online preparation software, as well as continued competition from traditional competitors, H&R Block tasked Neal Analytics to provide them with key insights to increase annual return counts and market share.