Retailers should expect a stronger holiday shopping season this year. Last month, the National Retail Federation (NRF) estimated holiday retail sales would rise 3.6% in November and December. The NRF highlighted stronger consumer confidence and the expectation that the weather will be cooler to drive sales of traditional seasonal goods.
This is certainly music to the ears of retailers who were burned by last year’s unseasonably warm weather. The warm holiday shopping season left cold weather goods and products like scarves and boots, on the shelves, forcing retailers to heavily discount those items. Many retailers who didn’t deweatherize their demand planning experienced the heaviest losses.
How Weather-Driven Demand Measures Weather’s Impacts the Holiday Shopping Season
The NRF’s estimate that holiday retail sales will improve this year from last is aligned with Planalytics’ winter weather outlook. Retailers can expect more favorable comps versus last year in the East and other parts of the country as the temperatures trend back towards normal. This will create positive weather-driven demand for many cold weather categories, including jackets, winter hats, snow boots, and more.
The weather is one of the largest external variables impacting a consumer focused business. Last year, the unseasonably warm winter caused consumers to throw on their shorts and make other purchases throughout the holiday shopping season. This year, we see a different scenario where the weather will positively influence cold weather products sales in many areas of the country.
Why Deweatherization Is Important
If retailers were to plan based off of last year’s sales data alone, it would result in a skewed plan for the upcoming season. This is because the weather only repeats itself fifteen to twenty percent of the time. Eighty percent of the time, a retailer’s demand planning would be considerably off if it used last year’s numbers alone.
Weather analytics is the best way to neutralize the effects of the weather by market, by region, and by time.
Although weather trends so far in the fall have been relatively warm, things will change as we head into the holiday shopping season. Retailers can expect colder weather to drive sales for seasonal products. Contact us today to learn more about deweatherization and how Planalytics can help you mitigate the effects of the weather on sales.