Need to Weatherize Your Apparel Business?
Sourcing Journal
By: Janice Kirkel
The weather has always been a big factor at retail, playing either villain or hero as stores looked to move sundresses and snowsuits within full-price sales windows. But in today’s buy now, wear now market, changes in temperature can have an even bigger impact than before. Just ask retailers in Europe, who struggled this fall as the mercury continued to rise.
Citing “an extraordinarily warm September” and the decision to not go the discounting route to move goods, Zara parent Inditex fell short of sales estimates for the third quarter.
Asos too blamed “unseasonably warm weather” over the past three months for taking a bite out of margins and helping to drag its average selling price down by 6 percent.
Joining the chorus, British label Superdry listed weather among the leading issues zapping profits in the first half of fiscal year 2019.
“The challenges already being addressed by Superdry in terms of product mix and ranging were highlighted in the first half, with the unseasonably warm weather and a weakening, discount-driven consumer economy suppressing demand for the cold-weather clothing that has traditionally underpinned Superdry’s offer to consumers,” the company said in its earnings release.
Stateside, companies like PVH and Macy’s benefited from cool temps this October, which gave a boost to coats and other cold-weather goods.
“We feel very comfortable in our cold-weather business. We did have good increases of that in the third quarter. We expect to have the same increases in the fourth quarter,” Macy’s chairman and CEO Jeff Gennette said.
In short, the weather is unpredictable and climate change, especially when seen through the magnifying glass of Facebook, Instagram and all the rest, has made it even more so. And retailers are finding that with the help of some technical expertise, they can use the weather to make decisions on production, distribution, marketing and even worker safety.
But the experts say past performance is not an indicator of future results. . . .
. . . For decades, the traditional approach of retailers was either to throw their hands up and let the weather gods have their way, or to base next year’s business decisions on the previous year’s. Retailers that do the latter, said David Frieberg, vice president of marketing at Planalytics, which uses meteorological data to quantify the effects of weather on sales, risk being wrong just about all of the time.
“Weather volatility is not just the extreme events,” he said. “It’s the day-to-day, week-to-week, year-to-year changes. You proceed at your own peril to say, ‘Well, that’s that.’ Eighty-five percent of the time the weather is not the same as the year before.”
For instance, the retailers reveling in cold weather sales this fall had a very different experience last year. October 2017 was the warmest October on record in the Northeast, which accounts for 25 percent of U.S. retail sales. . . .