The Weather as a Business Tool

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You don't have to be Al Roker to understand how climate can affect a long-range sales and marketing plan. Dog-sled wax sells in Anchorage but not Honolulu. More convertibles are sold in Malibu than in Chicago. And snow tires do well in Detroit but not Miami. Seasonal calendar considerations are no less obvious. Put your Christmas merchandise in the windows before Thanksgiving, and your summer items on the racks before Easter.

Marketing with the weather in mind is another story, however. Whereas climate is a predictable, man-made set of statistical averages for a given geographic location-the southern states have long, hot summers and the northern states have harsh, cold winters-weather is a highly variable phenomenon. There may not be many annual snowfalls in south Georgia, for example, but they do happen now and then. And ask any Vermont ski resort about 75-degree days. In January? Hey, it happens. Knowing far enough ahead of time when such insults to industry might occur can translate into a marketing advantage, if you know what to do with the information.

Consider the customer. Research shows that while diligent marketers may plan promotions according to normal climate patterns or tried-and-true calendar events, consumers tend to focus on the weather outside right now (aided and abetted, of course, by front-page headlines in the local newspapers and weather-happy meteorologists on the six o'clock news). It's the sight of snow falling and sticking to the ground that sends panicky Atlantans to stock up on staples like milk, bread, toilet paper and batteries. New Yorkers know that there will be several weeks every summer when the thermostat will hover above 90 degrees, but it's the actual heat wave that motivates them to go out and buy air conditioners and fans. Obviously, knowing in advance about such weather events would help marketers and retailers prepare for the thundering hordes.

Even subtle shifts in temperature and precipitation can influence consumer needs, so using last year's weather to predict this year's market response is likely to prove ineffective, especially since statistics show that last year's weather repeats itself only 30 percent of the time, at best. For a retailer, this can translate into shelves that are overstocked or out of stock.

Remember those hot New Yorkers? Like most consumers, they are less likely to buy an air conditioner simply because it's July, or even if Al Roker says flat out that next week will be hot. No, they rush to the store two or three days into the heat wave. This may indicate a general distrust of weather forecasts, but there are other consumer spending patterns at work here. With less free time, Americans have changed from "just-in-case" to "just-in-time" shoppers. Rapidly developing technology plays a part in this, too: Why buy today when you're not sure you'll need it? And anyway, next year's model might be better or less expensive.

IT'S ALL IN THEIR HEADS The traditional climate-planning approach to marketing has other limitations in that it tends to draw a direct line between temperature and weather-related products, while not allowing for different regional perceptions of what good or bad weather is. In fact, how consumers perceive hot, cold, wet or dry is far more revealing than temperature charts and precipitation tables.

Research that correlates weather with retail sales transactions shows that a woman in Las Vegas may not purchase shorts until average weekly temperatures there reach 64 degrees. But a woman in Seattle, being more accustomed to cold climes, may consider 54 degrees warm enough to break out the Bermudas. Likewise, weather that's 60 degrees in St. Petersburg will drive up sales of thermal underwear, while folks in Peoria are still in their T-shirts when the mercury hits 60.

Not surprisingly, then, research also indicates that 72 percent of seasonal sales spikes follow the ups and downs of the thermometer. So even if you know that 20 percent of annual sales for ladies' shorts occur around two holidays, Mother's Day and Independence Day, you're missing an opportunity to fine-tune your merchandising strategy if you're fixated on the calendar. If you're a retailer, you may typically mark down summer sportswear around the Fourth of July, but if you know that the Mother's Day period will be rainy or that the Fourth will be especially hot, you may want to reconsider that markdown.

The way people feel about the weather can be as revealing as mood swings when it comes to anticipating their penchants for purchasing. Warm, sunny days brighten almost everyone's mood. For example, people will start wearing their summer clothes at the first sign of spring and they don't put the shorts and tank tops away until fall's chill has firmly set in. But consumers rarely check their calendars before putting away the summer gear and taking out the fall and winter wardrobe. Suddenly, it just feels like it's time to do so.

Identifying when that shifting mind-set takes place can be quite a challenge. One apparel chain decided to consider a long-range weather analysis rather than the calendar when planning its spring promotion for family activewear and wound up delaying the campaign. The strategy paid off: Unseasonably cold temperatures in May delayed the spring/summer seasonal weather break to the first week in June-much later than usual. By keying to the weather rather than the calendar, the company saved what surely would have been wasted promotional dollars.

Weather events create conditions that affect consumer behavior in other ways as well. Obviously, umbrellas sell faster on a rainy day. But that rain also makes grass grow, flowers bloom and weeds sprout. And that ups the demand for lawn and garden products. Meanwhile, swimming pools will cloud over, pests will invade homes and gardens, and so on, all adding to a sudden burst of product demand. When it snows, sidewalks and driveways have to be shoveled, windshields have to be de-iced, and sales of hot chocolate and chili skyrocket. All because of the weather-not the climate, not the season, not the weather forecast, but the actual appearance of rain, snow or sleet.

A FEW DEGREES OF SEPARATION The connection between weather and consumer behavior isn't always so obvious, however. While the occasional high-profile weather event (a blizzard, a hurricane or a flood) grabs the media attention, the affect on sales is likely to be brief and localized. While such events are not to be discounted, they are not nearly as significant as the subtle but constant fluctuations in day-to-day, week-to-week, or season-to-season weather. A departure of even a few degrees from normal temperatures can cause a product's demand to sweeten or sour.

Food and beverage items are influenced year-round by such subtleties, and small changes in temperature can nudge consumers toward hot or cold drinks, wine or beer, even soda or iced tea.

Many foods and beverages have such "temperature thresholds"-oatmeal vs. cold cereal, milk vs. hot cocoa, mashed potatoes vs. potato salad, to name a few. A study reported in Frozen Food Age revealed how warm temperatures can significantly drive up consumer demand for specific frozen food items and, in some cases, may be powerful enough to cut out the need for additional promotions altogether. Over a 14-day period, from July 5 to July 18, 1995, according to that study, high temperatures alone drove up demand for some products as much as 86 percent. Consumers just didn't need an advertisement to tell them they were hot and craved cool foods.

Beer sales are also very temperature sensitive. A Japanese brewer found that a one-degree rise in temperature increased beer sales by 8 percent over the average daily consumption during July and August 1985. The findings were reported in the August issue of Mitsubishi's "Tokyo Newsletter" that year.

Of course, edibles aren't the only products influenced by the weather's ups and downs. The "Tokyo Newsletter" also revealed that in 1978, intense summer heat was responsible for the sale of 450,000 more air conditioner units than the 2.7 million anticipated; conversely, in 1982, a summer with cooler than normal temperatures, only 1.9 million units were sold compared to the anticipated 2.4 million. It's a pretty safe bet that sales projections were based on the previous year's weather data.

For mass-market manufacturers and retailers, this information is more than just a gauge of how many units to produce or purchase and where to ship them. It can also tell them when to schedule or, better yet, how to avoid markdowns. One company, for instance, had planned to markdown the price of its fans toward the end of the season, as it normally does, but was advised not to by a weather consultant. The result? The fans, which were still on display at full price when a late-season heat wave arrived, sold out. This same company has since applied, with equal success, a long-range weather strategy to snow blowers, driveway sealers, paint deliveries and lawnmower repair services.

Research further reveals how consumer behavior and perceptions of the weather can vary. The climate in St. Petersburg is like that in Miami, for example. Yet a rainy weekend may send retail sales for many products plummeting in St. Pete, even as they're peaking in South Beach. Why? Because St. Pete's population is predominantly senior citizens, and rainy weather discourages them from venturing outside. The younger population of Miami, on the other hand, might decide to do some shopping if they can't spend the day at the beach.

ENTHUSIASTS VS. CASUAL SHOPPERS Many products enjoy a relatively brief sales window. The season for seeds, plants, insecticides and other garden supplies can be just six weeks long. Knowing how the weather will influence consumers during that narrow window of time can be critical to the bottom line.

Sometimes seasonal sales aren't lost due to "bad" weather but are merely postponed, which means that sales and markdown strategies must be reconsidered, not just torn up. Avid outdoors enthusiasts such as golfers, anglers, gardeners and bicyclists tend to make their preseason purchases regardless of the weather. Even if rain interrupts their schedule, they're still likely to shop for items that match their enthusiasm. (A golf nut is a golf nut, rain or shine.) Mass-market shoppers, on the other hand, are more directly influenced by precipitation. A family looking for vacation gear or new bikes for the kids might not have such an immediate need for the product, and rain could postpone their purchasing plans.

There are some products that are affected by the weather more than you might think. Consider batteries, for example, which are known to fail when the temperature falls below 40 degrees. They also increasingly fail when temperatures top 75. And while cold temperatures obviously affect auto and truck batteries and other automotive components, they'll also affect snowmobiles, snow-removal equipment, and other battery-reliant equipment. In the summer, hot temperatures will affect batteries for Jet Skis, motorcycles, garden tractors, golf carts and other recreational items.

Sometimes, it is important to simply know when seasons will or won't change. Many retail outlets, for example, share shelf space for seasonal products. Charcoal briquettes in the summer might be replaced with fireplace logs in the winter. Summer allergy medications and insect repellents might replace spring cold and flu medications.

More umbrellas are sold on rainy days than on sunny ones. That's common sense, not rocket science. But it is also statistically sound. Part of the art of retail success today is to position merchandise in front of the customer at the right time. A survey included in Kurt Salmon Associates' "1998 Annual Consumer Outlook" revealed that seven out of ten consumers have a clear idea of what they intend to purchase when they enter a store. And 84 percent complain that stores have merchandise displayed before they are ready to buy it, or not there when they want it. The impact on purchasing? Five out of every ten customers will leave the store empty-handed, and only one of those five will return to give that store a second chance.

Improving those odds calls for understanding what motivates the consumer to make, postpone or even cancel a purchase, and a simple little thing like heat or humidity can substantially change that profile. Even though it may be true, as Mark Twain once observed, that everybody talks about the weather but nobody does anything about it, it's the wise sales and marketing department that resolves to prove him wrong.

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