In The News

  

Through the retail lens: Weather’s impact

National Retail Federation

By: Sandy Smith, NRF Contributor


Planalytics’ Evan Gold on hurricanes, mild winters and what’s in store over the next decade

Evan Gold, executive vice president of global partnerships and alliances for business weather intelligence firm Planalytics, pays more attention to the seasons than most. He focuses on information technology, merchandising, revenue management, store operations and logistics.

Gold has more than 20 years’ experience in retail and wholesale, working at Macy’s and LakeWest Group before joining Planalytics in 2005. He spoke with NRF about the ways weather impacts retail and the supply chain.

Big picture: What are some key ways weather has impacted retailers in 2020?
In a typical year, the weather has a significant impact on retail. Of course, 2020 has been anything but typical. But this year, the impact of weather has actually increased, because the weather is one of, if not the, largest external drivers of need for seasonal categories. That’s what we’re shopping to.

The first full month of quarantine, we had the coldest April since 2013. We weren’t out there buying spring products. We were wanting to take care of our lawn and garden and Mother Nature said, “Not yet.” We didn’t buy a lot of those spring products until May.

The other thing I would say: A lot of major retailers have openly stated and started campaigning to move the spring and fall selling seasons to align with the climatological seasons. I’ve definitely seen this among the apparel folks, asking, “Why are we putting product out before the customers want to go out and buy it?”

Let’s talk a bit about the hurricane season: What are some unseen impacts it has had on retail?
With the hurricane season running from June through November, we have had 23 storms so far. That makes this the second-most active season, lagging only behind 2005 when we had Katrina. And we still have a couple of months to go.

A lot of people think about the impact the storm has, but from a retail perspective, people buy on the forecast of a storm. If customers are in the projected path of the storm, they will buy products to prepare, protect their property, regardless of the path the storm ultimately takes.

The savviest retailers are constantly, year-round, tuning their supply chains so they can proactively manage inventory around hurricanes or other events. They’re investing in technology, people and processes to make a more agile supply chain.

We’re not going shopping for a lot of things these days. But if I’m in the path of a storm and risking myself going out to protect my property, and worried about COVID-19, you’d better be sure that the product is on the shelf. Otherwise, they’ll go to another retailer.

Winter is rapidly approaching. What concerns you about its impact on retail for the upcoming holiday season?
We’re still living with the disruptions of COVID-19, and the shopping patterns are not what they were last year. When retail opened up, we saw consumers were willing to stand outside and do their shopping. As the weather turns colder, I’m not sure how much consumers are going to be willing to stand outside.

The holidays are going to come, and consumers will shop, but this goes back to how imperative it is that retailers have the right products on the shelves when the customer ventures out. Even though the percentage of retail done online is going up, the majority of spending continues to take place in the physical environment.

Have a plan in place to minimize disruptions around weather, such as buy online, pick up in store, reducing wait times, offering shopping assistance, setting appointment-based shopping — anything you can do to make it easier for shoppers. The weather is going to impact that trip. It’s also going to influence what they buy.

The National Weather Service seems to indicate a mostly warmer winter. In what ways can that benefit retail — and in what ways can it hurt?
You can get frigidly cold temperatures in February. Ask any retailer: They want it frigid in December. Last December, we had the fifth-warmest December in 125 years. It may still be warmer than normal, but it should be colder than last year.

It depends on when and where the warmth is. With that background in mind, in general on a very macro level, warmer weather in December can help store traffic. They may be more likely to shop if it feels warmer to them. When it’s warm in December, people may spend more on outdoor lighting and lawn ornaments because it’s more pleasant to put them out. If it’s warm, it’s a negative for all the seasonal apparel.

While we’ve talked a lot about the current weather conditions, what major shifts could impact retail over the next decade?
You have to first understand your exposure or risk to climate. Ask any retailer, “How much of your business is exposed to weather?” It will be different based on sector. Restaurants are different than home centers than apparel.

Analytics can help to not only better understand the size of the opportunity, but better serve the customer. We have more data now than we’ve ever had, so use analytics — whether it is weather or any type of analytics — to better serve the customer when, where and how they’re shopping.

The third thing goes back to that idea of closely aligning the shopping season with the climatological season. It’s a shift that we’re going to move forward.

The last thing I would say is the increased use of social with the improved supply chain. The customer has more access to information at their fingertips and the ability to shop whenever they want. As the weather becomes more volatile, the shopper is shopping based on need. If you layer in weather and can have an idea of what they’re going to buy, or do more prescriptive analytics, and be able to market and advertise into that, they’re more likely to buy from your brand.

Read the original article here.

share this article