By: Allison Zisko
Two companies combine resources to help home furnishings stores manage the impact of bad weather.
NEW YORK—A new partnership between The Grayson Company, a retail advisory firm, and Planalytics, a weather data analytics company, promises to help retailers better weather, well, the weather.
The two companies said their combined resources will help home furnishings stores manage the impact of bad weather—both catastrophic events and the day in, day out vagaries of Mother Nature—in terms of inventory planning, site location, supply chain management and other areas.
Hurricane Dorian, which lumbered its way up the East Coast last week, destroying the Bahamas but leaving the U.S. fairly intact, caused consumer spending to decline $1.5 billion, according to Evan Gold, who oversees partnerships and alliances for Planalytics. It expected sales at apparel stores, outlet centers and restaurants to be down in a range of double digits in the region of the hurricane, while home centers, grocery stores convenience stores, which offer one-stop shopping for need-based items, “will see a lift,” Gold said.
People restore damaged property first, which boosts sales at home improvement centers, and then turn to discretionary items for the home later, if at all. Patio furniture blown away in a storm may or may not be replaced. If it is replaced, it might boost sales at specialty or furniture stores months later.
Once a bad weather event has passed, people tend to forget about it, Gold noted, but companies should plan for a “weather-neutral baseline,” he said. “Weather brings a lot of volatility to your business but if you don’t account for that, you’re baking error into your plan.”
Weather is volatile but rarely repeats itself, he added.
Planalytics, which is more than 20 years old and is headquartered outside Philadelphia, says it can improve forecast accuracy and profitability and, with The Grayson Company, help retailers manage merchandise planning, replenishment and performance analytics, among other things.
“A predictive analysis tool is a fantastic addition to what we bring our clients,” said Steve Goldberg, president of The Grayson Company. Goldberg said that macro planning—knowing when or when not to bring certain products into a store, for example—can have a huge effect on inventory levels and supply chain. This information ultimately drills down to finer details.
“We live in a world of year-over-year comp performance categories where improvements of 50 basis points can be tremendously important,” he said of the home furnishings industry. “Any tools they can employ to improve those margins become critically important. The results move to the bottom line very quickly.”