We’re only a little over a week away from Black Friday and the official start of the holiday shopping season. Apparel-focused retailers who were hurt by the incredibly warm temperatures last November and December in many parts of the country are eager to know if this holiday season will prove more favorable.
There are many questions retailers might have:
Will the weather drive shopping traffic?
Where will there be weather-related opportunities?
Will it get cold enough to trigger sales for a specific seasonal item?
These are just some of the questions that we will be looking at now and in the upcoming weeks as we enter the prime weeks of the holiday shopping season. Planalytics combines weather data in business and historic sales data to isolate the weather and determine its impacts on sales based on market, sector, and category.
What a Difference a Year Makes
Thanksgiving Day was the warmest since 2012 and wettest since 2010. The Black Friday weekend was the warmest since 2012 and the wettest since 2000. Last year, temperatures were well above 70 degrees in the East on Christmas Eve. This was a weather trend seen on the East Coast throughout the holiday shopping season.
This year, Black Friday weekend will feature colder temperatures versus last year in the East, which will support seasonal demand. Warmer temperatures are expected in the West. Retailers will have to identify the areas of opportunity.
Below are weather-driven demand insights for several product categories for November vs. last year:
Soup: -15% WDD IN Seattle
Firewood: -18% WDD in Denver
Long Sleeve Shirts: -5% WDD in Los Angeles
Heaters: +14% WDD in New York
Rainwear: +35% WDD in Miami
Boots: +6% WDD in Montreal
In December, many retailers should see favorable comps for seasonal categories as temperatures are expected to be colder than last year. If you remember, December 2015 was the warmest retail December since 1960. Apparel stores should see a positive impact of $275 million while home centers will see a negative impact of $876 million. In regard to various categories, here are Weather-Driven Demand insights for December 2016:
+33% WDD for Snow Removal
+20% WDD for Firewood
+9% WDD for Hats & Gloves
+5% WDD for Automotive Batteries
As you can see, seasonal categories are expected to see stronger sales driven by colder temperatures in the East. However, the weather impact for specific sectors and categories in December will depend on the region and week. It is best to speak with your Planalytics representative about weather-driven demand insights specific to your business.
Overall, sales growth is expected this holiday shopping season as temperatures normalize in much of the country that saw extreme warmth last year. Understanding weather’s impact and how it affects your business is the first step to managing its volatility.