3 Myths about the Weather and Its Impact on Sales

 

Myth 2: Weather doesn’t matter! It all evens out in the end.

“Sometimes the weather hurts me, sometimes the weather helps me.” This is true, but it does not mean the positive and negative impacts simply even out over the course of a selling season, fiscal quarter, or even the year. The timing, location, strength, and duration of favorable or unfavorable weather impacts make a big difference.

Consider the following examples:

  • PROFITABILITY: A negative 25% weather-driven demand impact on winter coats in November is not offset by a 25% weather-based demand boost in January. There is a lot more profit in a November sale compared to the end of the season when the merchandise is marked down heavily for clearance.
  • LOST SALES: When a winter storm keeps people at home there are some sales that are never made up. Yes, the weekly grocery run will be made up a day or two later; but if someone doesn’t stop for a cup of coffee on the way to work because a snowstorm keeps them at home, they don’t buy two coffees the next morning to “make up for it”.

  • TIMING: Warmer-than-normal temperatures in the early spring can be great for DIY retailers as consumers head to stores for live plants and other lawn and garden items. However, if these retailers have a less favorable start to the season, improved weather in May or June will not have the same effect. For many consumers, the optimal “window of time” has passed for certain outdoor projects (or apparel or other seasonal merchandise). DIY projects will be downsized or skipped altogether as the calendar shifts attention to other priorities or activities (e.g. graduations, weddings, beach weekends, etc.).

So, unlike Newton’s third law of motion, you cannot really expect “an opposite and equal reaction” when it comes to weather and its business ramifications. Weather analytics can provide both pre-season and in-season visibility into consumer demand changes and the resulting shifts in opportunities and risks across a business and across time.

Click here to read Myth #3

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