By BILL RETTEW JR., Daily Local, Chester County, PA
TREDYFFRIN – An international company based in Berwyn advises businesses to stock up on snow shovels, order more ice cream or bring in extra workers for a shift, all based on weather forecasts.
Among others, Planalytics Inc. works with Dunkin’ Donuts, Ace Hardware and Johnson and Johnson to determine the impact of weather on their ventures.
The company might suggest when an apparel chain should put out its spring clothing, or, when the mercury is set to rise, how a fast-food restaurant might best determine when to discontinue selling soup.
While Planalytics meteorologists predict weather, President Scott Bernhardt said, the growing company with an office in London is “not trying to out-finesse” the National Weather Service.
“We do the economics of weather,” Bernhardt said. “It’s important for companies to understand the effect of weather on their customers.”
The company that has operated since 1996 employs computer statisticians and programmers, meteorologists, a marketing and sales department, a support staff and human resources personnel.
Company workers are an “extremely talented group with a fun, entrepreneurial spirit,” according to six-year employee and director of marketing Joseph DeRugeriis.
“As someone who communicates with prospective clients on a daily basis, there is always a great interest in what we do,” DeRugeriis said. “I’m grateful to work with such a unique company like Planalytics.”
When the snow falls, Planalytics advises fast-food chain Subway that customers might be hesitant to get out of their cars and walk inside, while knowing that Subway has few drive-through lanes.
Simple advice for when a hardware store should stock and then place shovels, rock salt and windshield washer fluid at the counter, in a bid to attract impulse buys, can add to the bottom line.
Every market is different. Bernhardt said his company has analyzed more than 10 trillion counter transactions – individual ZIP code by ZIP code – to better understand the effects of weather.
For example, prospective customers are less likely to “cocoon” at home in Buffalo during a three-inch snowfall than they are in Chester County. And 50 degree temps might mean throwing on a coat for Westtown residents, while in Southern California the chilly weather could keep customers away.
How does weather effect Black Friday shoppers?
“A nice day in Philadelphia is very different from a nice day in Phoenix,” Bernhardt said. “At the end of November it is a different definition of nice here, where we’re more tolerant of the cold.”
And when shoppers stay home, online sales might pick up. For online marketers, that means more staffers might be needed – unless large areas lose power.
Planalytics also works with farming-related businesses such as feed and fertilizer companies while indirectly supporting farmers. Bernhardt said forecasting longer than two weeks out is impossible and laughed at the possibility of predicting weather for a wedding two months in advance.
PECO and PGW are both Planalytics clients. While Planalytics does not make predictions for the commodities markets, suggestions concerning when a power company should hedge and purchase natural gas can cut the costs when the prices from distributors skyrocket due to weather.
Planalytics also advises when not to buy. A hardware store might be offered rock salt at $10 a bag from a distributor when Old Man Winter blows hardest, but most customers will pass on buying it.
“We take the risk away from our customers,” Bernhardt said. “They can buy ahead sensibly.”