Tag Archives: business forecasting tools

Why 90° Doesn’t Mean It’s Hot Outside for all Consumers

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Every consumer experiences weather conditions differently. A “hot” day for someone in Buffalo, NY doesn’t affect a resident of Atlanta, GA the same way.. There aremany variables in play that affect perception of the weather, such as location, time of year, and recent weather experiences. This is important for retailers to understand because weather volatility can affect how we shop and what we shop for. Therefore, businesses that understand how the weather shapes consumer behavior and the benefits of weatherization will be best suited to handle weather’s effect on the consumer.

 

The holiday season is in full swing, which means winter is just around the corner. Although much of the country has been experiencing warmer temperatures this November, cold snaps this time of year can have a dramatic effect on consumer behavior. One very “cold” (temperature is all relative) day in November can drive consumers to make those cold weather purchases such as apparel and hot beverages.

 

To that same end, the same temperature a consumer experiences in November has a very different affect in early March. That same weathercould drive consumers to start thinking about making warm weather purchases as they have undergone a whole season with colder temperatures. The two examples highlight just a few of the many factors that go into weather perception.  The time of year, your location, and previous weather experiences have an impact on how you feel. 60 degrees in New York City in June would feel a lot differently than 60 degrees in San Antonio. Weather  is relative depending on the variables.

 

Using Weatherization Tools to Better Predict Consumer Response to Weather Volatility

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Retailers that want to understand how variances in weather can affect customer behavior must invest in business intelligence tools that focus on weather analytics. Looking at weather data does not provide the answers to how weather is impacting your business.

 

Weather analytics from Planalytics can help organizations enhance strategies to effectively leverage the opportunities and mitigate risk associate with weather volatility.  While perception of the weather may be relative, preparation should not be.

 

Weather volatility, like all other external variables impacting a business, should be managed. Investing in a sophisticated solution like predictive analytics software can allow organizations to improve their merchandising, marketing, labor, logistics, finance, facilities management, and other business areas to support customer demand. Weather analytics removes weather volatility from sales history to create a deweatherization baseline to more effectively align plans.

 

Given the complicated nature of weather perception, retailers that can best utilize weather analytics to adjust internal processes to maximize profit. Learn more about weather analytics today by visiting www.planalytics.com.

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How the Mere Threat of a Hurricane Can Disrupt (and Benefit) Businesses

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When there is a threat of a hurricane, most people affected will take it very seriously. A hurricane can produce very unwelcome consequences – from damaged homes due to the high winds to flooding and power loss. Fears of these results can create a panic just by the mere mention of a hurricane. Therefore, even if a hurricane does not directly hit a region, it can have major consequences that can affect businesses of all kinds.

Take, for example, some of the headlines we saw in the media for Hurricane Patricia. “Biggest Potential Storm Ever” and “Dangerous Hurricane Patricia” were two phrases that stood out. The best, though, was from Doyle Rice of USA Today: “Patricia’s 200-mph winds will turn planes, vehicles into airborne missiles.” Understandably, residents, travelers, and business owners decided to heed on the side of caution and travel as far inland as possible. The potential consequences of a natural warzone were enough to get them to leave even if it caused some disruption in their lives. Luckily, there wasn’t a panic as meticulous planning and past experience enabled those affected to respond quickly and efficiently.

 

Hurricanes and Hysteria

 

In a blog post for PsychCentral, psychiatrist, John M. Grohol, outlined some fears that could lead to a panic. First and foremost, there is the fear of the unknown. The trajectory of a hurricane can change very quickly, which can create anxiety among those who may be wondering whether or not the storm will make landfall and how hard it will hit. In the case of Patricia, Mexico was for the most part spared. The storm regressed into a tropical depression and landed in a mountainous area of Mexico where the typography was able to sustain it. Still, anyone within the scope of Patricia’s projected path was affected in one way or another.

Then there is the fear of what happens if the worst does occur. A hurricane that directly hits a region could cause extreme damage, leave the area without power, and cause many to wonder whether or not they have enough food and water. What if Patricia didn’t slow down and landed somewhere where the winds would have produced more damage?  What if it had hit a populous area or an area with utilities and other potential hazards? We saw how Sandy disrupted the lives of those in the Mid-Atlantic and New England. What impact would an even more powerful storm have on a region?

 

How Can Businesses Respond to Extreme Weather?

 

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Because of these fears, consumers are more likely to act on the side of precaution when there is a threat of a major storm like a hurricane. They will likely fill up on gas, purchase the necessary food and water rations, and consider getting disaster recovery products, like generators and duct tape, to ensure that they will be ready if the storm does hit.

Notice that the key word in the previous sentence is “if.” When consumers are asking the question of “if?”, then businesses will be affected whether or not the storm actually does hit. This is why companies of all sizes that have locations where hurricanes can hit must consider investing in Weathernomics tools and services to help them plan for consumer demand during hurricane season.

An investment in Weathernomics allows businesses to see how and why customers make purchases because of the weather. Weather data is not enough because it does not tell the whole story. What if there was an aberration in sales during a week several years before, but the weather data showed that there wasn’t a significant weather event during that time? Weather analytics can provide a deeper picture to see whether or not there was the threat of a storm and how consumer behavior changed because of it.

By using Weathernomics, businesses can better plan before the season and update plans in-season due to changes in weather. Businesses can not only make changes in inventory, but also amend marketing plans, logistics, labor, and other operations planning to stay ready for whatever the season may bring.

In the event of a storm, most people will usually prepare for the worst. The weather can produce an emotion-based response in how people shop and what they shop for. Businesses, however, must have a logical response to the weather. They must provide the products and services their customers need based off whatever the weather forecast is. The best way to understand how their business could be affected by the mere threat of a major storm like a hurricane is by including Weathernomics in their higher order strategic planning.

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Does the Media Perpetuate Weather Hype?

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Although Hurricane Joaquin missed hitting the Atlantic coast, there were reciprocal effects that have had some very expensive and far-reaching consequences.

If you lived anywhere on the Atlantic coast, you probably heard a lot about Joaquin. The media coverage was nonstop, discussing  how the storm was very unpredictable and could take several trajectories. Meteorologists did not want to make an exact call, but warned the public about the variety of possibilities to ensure that everyone was on the same page.

However, like any other program, the local news depends on ratings to earn advertising dollars. Therefore, it is going to feature stories that viewers will tune in to see and be willing to wait to see it. There’s a reason why the local five day forecast is usually revealed at the end of a newscast.

News producers do this because they know that viewers are more likely to watch the entire news segment until they hear the weather for the week or about possible extreme weather scenarios in the region, etc. No matter where you live and what you do, the weather will affect you in some way, so viewers have raised stakes in the forecast. A poor forecast could affect how they get to work, whether or not they need to make arrangements if school is closed, what they need to get at the grocery store, etc. Therefore, if there is the chance of a poor weather event, the public will be more inclined to listen.

On one hand, this is great news for the local media because they get more attention. However, meteorologists and other weather experts must still be accurate with their forecasts. We have discussed in the past about the miscalculation of the 2015 NYC blizzard that never happened and how that affected households and businesses in the area. You don’t need to have an extreme weather event to experience many of its effects if the hype is there. Although creating hype can be beneficial to the media, there can be a public backlash that may negate those benefits.

However, as Dennis Mersereau, a meteorologist who publishes articles frequently for Gawker, points out, the Internet has created an environment where anyone can post misleading information to create their own version of weather hypes to increase their following on social media platforms. The Internet has made this information readily available, which can be good, but it still allows individuals without any expertise or consequences to post information that could lead to the proliferation of panic for a storm that may not even happen. This could affect everyone from a parent who just wants to make sure that their child will be taken care of if school is closed, to the small business owner whose sales are affected by people staying at home.

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With all of this hype generated by traditional and new forms of media, it’s important for households to review all of the information out there to make an educated decision. At the same time, businesses must pay closer attention to business forecasting tools  and consumer demand analytics to make sure they know how their operations could be affected by a storm, whether it actually happens or not.

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