Want to Increase Sales? Don’t “Brush” the Weather Aside
By Doug Kimball
“Where’s the snow brush for my car?” No doubt this is a common question in the winter, and one that’s likely been asked of several spouses recently. With the arctic snap upon much of the United States, it seems that many have been caught unprepared, or perhaps just didn’t believe the forecast. As someone who actually enjoys the snow and cold weather, I know I was skeptical of the projected -15 temps and significant chance of snow that I saw on my smartphone’s weather app. I realized I needed an extra snow brush, and since the one I carefully placed in my organized garage was hard to find, I headed off to a major retailer. I also decided to stock up on bread and milk, just in case.
The auto supplies area had a shelf with eight snow brush boxes, the most I’d ever seen out. Sadly, they were all empty – and this was only day two of our snow fall! Given my interest in supply chain, I found the store manager and politely asked about the shortage. His response, nearly to the word, was “Yeah, we were caught off guard for sure. That’s all we have on hand and won’t have any more for a few days.” I asked if they had ordered more than usual given the weather, and he commented, “Basically, we just ordered the same amount as we have the last couple years.” Given that we’ve had very mild winters for the last four years, fundamentally his answer made sense. I thanked him, went home empty-handed and shared my snow brush.
Weather can have a tremendous impact on the supply chain. While sometimes snow and ice, hurricanes, and heat waves can become major weather events that impact supply chain processes, even more common are the everyday impacts of minor weather fluctuations that can challenge logistics providers, manufacturers, retailers – essentially, all points of the supply chain. A cold snap in Florida, for instance, could cause the citrus industry to modify their shipping commitments, retailers to change their pricing, and juice manufacturers to adjust their production plans. Sunscreen manufacturers would benefit from knowing where it’s going to be warmer earlier in the season in order to plan for more effective distribution. Retailers in vacation areas who are informed of unusually rainy weather in advance could plan for additional front-of-store displays of umbrellas and rainwear. Even small changes in temperature can drive sales increases ranging from clothing, ice cream, allergy medicines, bug spray and lawn care materials. The types and examples are as variable as the weather patterns, and as volatile as consumer demand.
Obviously, weather will happen, and it will have an effect on shopping, whether in-store or online. Demand variability is a challenge across the supply chain, and weather is just one of many influences on demand. Social media, news, events and weather (often referred to as SNEW) are increasingly impacting the desired balance between demand and supply. But what if we could smooth out some of those ups and downs through more effective analytics? What if instead of ordering the same quantities as last year based on traditional demand forecasting, companies relied on weather analytics that provide insights to make more effective and accurate decisions? One of JDA Software’s partners, Planalytics, enables this and much more by empowering retailers to see weather by location, allowing them to anticipate changes and respond to the potential weather impact. Their strength in gathering and analyzing trillions of data points and delivering category level insights, coupled with JDA’s powerful demand management capabilities, open up tremendous value opportunities across the supply chain. These advancements benefit more than just retail, as suppliers gain value too by being able to look at weather analytics and know which of their retail partners might be impacted, and consequently, need more or less product.
Of course, I’ve only covered at a high level the capabilities that are enabled by our partnership with Planalytics and available to JDA clients. There is significant value available to be captured by most effectively understanding and reacting to weather impacts on your supply chain. If you’re attending the National Retail Federation’s (NRF) 107th annual Retail’s BIG Show and would like to learn more, stop by booth #2817 to hear the joint presentation by Evan Gold, EVP Global Services, Planalytics and Puneet Saxena, GVP Product Strategy, JDA.