Cold Weather is Good for Retail—But Only if Stores Plan Appropriately

(Excerpt):

“The weather typically doesn’t repeat itself year after year so the impact might repeat roughly about 15 percent of the time,” said David Frieberg, vice president of marketing at Planalytics, a business weather intelligence firm.

Rather than trying to compare last year’s apples with this year’s oranges, Planalytics takes a much bigger picture approach to figuring out what the true impact of weather might be going forward.

“We take many years of a retailer’s sales histories on a week by week, market by market and category by category basis, match that with our weather data to uncover the correlations and relationships between when weather does this, they sell this much more or this much less. Then we’re able to quantify things on a go forward basis,” Frieberg said. “We can tell them how they should plan for the first week of next January and what that means in terms of units.”

Armed with this information, retailers remove the biases their personal experiences inject into their planning process.

“By removing the historical impacts of weather, retailers will build more accurate financial plans and demand forecasts,” Planalytics said via a report it produced with the National Retail Federation. “Removing weather’s volatility from historical sales creates a weather-neutral baseline.”

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