• Jake

Weather to buy or not – keeping sales sunny side up for retailers


A storming 6-1 World Cup win by England over Panama at the weekend. Glorious weather with back-to-back sunshine forecast right into July. The nation is ebullient while toasting in sunshine. What’s not to like?

And with the good weather, this means it’s not all doom and gloom for some retailers despite all the recent news about sales downturn and store closures. While there are seasonal driven retail sales trends – such as bank holidays and calendar driven sales - the weather also plays a large part in sales, including pricing.

Granted, it won’t affect the subdued underlying growth predictions due to the general state of the economy and relentless march from high-street to online shopping. However, the good weather is a real boost for those weather sensitive sectors such as clothing, gardening, food & petrol (with nice weather bringing the drivers out).

Yet, the British weather is notoriously changeable and unpredictable. Hence our national obsession with it. And fickle beings that we are it can just as easily switch us from being in a great mood to a bad mood. Therefore, it’s no surprise of reports indicating that around 4.5% of overall sales are affected by the weather, a number that could make the difference between profit and loss. A seasonal temperature change of just 1°C higher or lower than the average typically causes a 1% fluctuation in sales. With the UK retail sector estimated to being valued at around £300bn, this translates into a deviation of £3bn.

For example, a predicted Indian summer could convince retailers to introduce their new summer lines earlier such as holiday clothing, BBQ or camping equipment. The flip side of course is the risk factor of the predictions not following through. Therefore, if the summer became a damp squib instead this could force retailers to discount heavily to help shift unsold stock.

Shoppers want products that are appropriate to the seasonal weather. And a shopping environment that is appropriate to the seasonal weather.

For example, while wet weather dampens high street shopping activity, shopping centres can benefit with indoor shopping supported by any number of enriching activities and experiences such as restaurants, bowling, cinemas and events. Extended rainy weather tends to increase in-home eating and hearty foods as people ‘cocoon’ and are reluctant to venture outside. And colder extreme weather also drives more people online to visit their favourite stores rather than physically browsing in person.

So just how can retailers help plan against this uncertainty?

With the UK’s unpredictable weather some forward-thinking retailers such as Bonmarché have gone as far as weatherproofing their collections in adapting their lines to make them more suitable for cooler, wetter summers.

Others with deep pockets, such as Tesco, harness the power of data to correlate and predict sales at the individual product level. They do so by using a system that cross checks an accumulation of 5 years’ worth of data with information about every product in every store, every day of the week. It’s claimed to be so accurate it can indicate the temperature at which sales of burgers will go up.

With another example, Walmart previously used data to establish their top selling item just before a storm is beer.

Suffice to say most companies can’t afford a big data approach. However, their own historic stock inventory can still provide insight when aligned to tools such as the Met office weather analytics and consultancy service to provide indications and implications around weather patterns.

This could result in data driven actionable insights such as:

  • Combining weather data with retail data, analytics and technology to understand weather sensitivities and thresholds;

  • Developing impact models to provide tailored forecasts for the retail industry;

  • Helping retailers and suppliers understand how fluctuations in day-to-day weather and extremes impact their business;

  • Supporting companies to quantify the impact of weather events, and assess the likelihood of their frequency and future potential impact on operations;

  • Helping to put plans in place to minimise the impact or maximise the benefit from weather events.

This data insight can also be helpful as a way of identifying weather conditions pertinent to regional or individual store locations, distribution centres and supply chains. Knowing in advance what types of issues may arise and how they can impact supply as well as sales could help retailers prepare appropriately.

With enough warning retailers could increase upfront orders for favourable weather-related products or develop contingency plans for those less favourable items that risk being left unsold on the shelf.

Retailers can also apply these weather-related insights to their marketing strategy. For example, developing weather responsive emails, weather adaptive web content and dynamic advertising can help retailers drive sales interest and purchase of their weather sensitive products. Embedding weather data into their marketing activities helps weather-proof their omni-channel strategy, drive customer engagement and boost sales.

Measuring the weather against associated shopper behaviour is the first step to managing it. Whilst mountains of data isn’t necessarily a prerequisite, robustness in the analysis is required to give confidence in the results. In turn, this is aligned to timely deployment in terms of stock order management and sales promotion activities. After all, who wants to be left unnecessarily selling umbrellas in the current hot climate when parasols are the requisite item of the day?

#Retail #Shoppers #marketingstrategy #CX #totalexperience

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