Tag Archives: weather analysis

Previewing the 2016 Holiday Shopping Season

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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

 

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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.

 

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Weather Boosts October Sales

Planalytics’ weather-driven demand analytics are pointing to positive October comp sales performances for several seasonally-impacted retail segments.

Sector imacts

Overall, October is going to be cooler than last year. These cool temperatures are already driving favorability for seasonal product categories. As you can see by the map below, Oct 2-7the first week started much cooler than last year, benefiting retailers selling fall apparel and other seasonal goods. Although temperatures have moderated in recent days, if we take a look at the next two weeks illustrated by the maps below, colder temperatures compared to last year will prevail to end the month. The regions in blue are in line for the most significant lift in consumer demand for Fall/Winter apparel and accessories, hot foods and beverages, and other seasonal categories. Given how October started, and how it’s projected to end, the colder temperatures will benefit retailers as predicted earlier this month.

october temperature vs last year

 

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How Severe Weather – Whether It Hits or Not – Affects Sales

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There’s no question that extreme weather can affect a business’s bottom line. We are nearing the end of the Atlantic Hurricane Season, and, so far, we have had a very quiet season. This isn’t always the norm though. Although the past few hurricane seasons have been relatively mild, 2011 and 2012 were very active, producing two very destructive hurricanes – Irene and Sandy.

2011 was also marked by an East Coast anomaly on the days leading up Halloween when a nor’easter hit, dropping as much as 32 inches of snow to fall in some places. Obviously, Halloween stores that year in the affected areas suffered substantial losses in sales.

The weather can have a dramatic effect on sales during the autumn and winter months, depending on where your business is located. If it’s a warmer season with few storms, your sales will be far different than if you were a retailer in Boston last year during the record snowfalls or NJ in 2012 during Hurricane Sandy.

Severe weather can certainly impact sales, but does the storm even need to hit for it to change customer behavior and affect foot traffic? We will discuss how even the mere threat of a storm can drasticallly affect your sales, and what happens in the consumer’s brain when a looming extreme weather event is announced.

Why Severe Weather Doesn’t Even Need to Occur for It to Affect Sales

Late January last year, New York City was bunkered down preparing for the blizzard of the century. Mayor Bill de Blasio gave a news conference the day before the storm was scheduled to reach NYC and pled with New Yorkers to stay indoors. He even suggested that if residents did go outside, there was the possibility that they could die in a winter storm-related accident.

As a result, New Yorkers complied with the Mayor’s wishes. Schools were closed, stores shut down for the day, and many people stayed home from work. The only problem was that the storm mostly missed New York City with many areas seeing only a few inches – much less than the two feet that was expected. Many meteorologists actually apologized for the disruption they caused for individuals and businesses.

The moral of the story is that an extreme weather event doesn’t actually need to occur to affect businesses and consumers. Although the history books will show that the storm wasn’t that bad in regard to snowfall or property damage, it did have the effect of a major storm on sales as many stores closed and people stayed home before the first snowflake even hit.

How the Threat of Severe Weather Affects Consumer Behavior

The “Bread and Milk” YouTube video by comedian Vic Dibitetto illustrates the psyche of some consumers when there’s a hint of extreme weather in the news. Just go to your local grocery store the day before a storm, and you’ll see long lines of people with carts packed with groceries they didn’t even know that they needed.

In a Time Magazine article on consumer behavior during storms, consumer psychologist, Kit Yarrow, discussed how people often revert to primal survival instincts when they see crowds of people taking everything off the shelves. It is partly a mob mentality that causes individuals to panic and respond to their emotions and crowds rather than think about what is actually going on.

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What Can Businesses Do to Predict How Severe Weather Will Affect their Sales?

While you may not be able to predict when a extreme weather might occur, you can predict how your customers will react to it. As we outlined above, looking at weather statistics isn’t enough. That storm that didn’t hit New York City last year still had a major impact on sales. Grocery stores and hardware stores most likely had increased sales of winter-related goods and perishables. Some stores closed because of the imminent storm.

Businesses looking to enhance their understanding of how extreme weather affects their sales can find analytics from the weatherization experts at Planalytics. They analyze historical sales and weather data to provide you with weather intelligence you can use in a business context to amend your demand planning to account for extreme weather – whether or not it actually occurs. Contact us today to learn more.

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