How Climate Change Is Transforming the Way We Shop

By Sarah Kent

Shifting weather patterns are making shopping behaviour harder to predict, adding to inventory management challenges for brands and retailers.

KEY INSIGHTS:

• Weather has always influenced consumer spending, but now manmade climate change is making weather patterns more unpredictable.
• That’s compounding the challenges retailers face when merchandising seasonal products and managing inventory.
• Retailers are looking to more sophisticated data analytics, seasonless products and more flexible supply chains to help navigate the challenge.

The first day of 2023 was a record breaker.

Across Europe, many countries experienced their warmest-ever New Year’s Day, with pictures of Alpine ski slopes denuded of snow making headlines. In the US, a Christmas cold snap gave way to an unseasonably warm start to January in many states.

The unusual temperature swings in key western markets are bad news for purveyors of puffy jackets and cosy winter boots. Warmer-than-normal temperatures and a lack of snow in New York this month are expected to drag down demand for outerwear, hats and gloves by 15 percent compared to an average January, according to Planalytics, a company that measures the impact of weather on consumer behaviour. . . .

Now, the way weather impacts quarterly spending patterns is getting more unusual and unpredictable because of the effects of manmade climate change. In contrast to the unseasonable warmth seen in parts of the US and Europe at the start of the month, countries including Korea, Japan and China in northeast Asia are in the grips of a deadly and disruptive cold snap.

Though scientists have not yet analysed the specific ways in which the climate crisis may have influenced this month’s unusual temperatures, extreme weather events last year — from Europe’s deadly heat waves to flooding in Pakistan — have been directly linked to global heating.

With every fraction of a degree of warming, weather extremes are expected to become more regular and intense, scientists have warned. Last year was the fifth-warmest since records began, according to the EU’s Copernicus Climate Change Service. This year could be even hotter.

To be sure, this impacts all parts of the industry, from raw material production to shopping habits. But in consumer markets, unusual weather patterns are playing havoc with brands’ and retailers’ ability to predict what people will buy and when, playing into hot-button. . . .

“No other external variable shifts store-level sales trends as immediately, frequently and meaningfully,” said David Frieberg, Planalytics’ marketing vice president.

Managing the Weather

Though many brands may not yet think about it this way, climate change is increasingly an inventory management challenge. And it’s compounding a broader market shift away from fashion’s traditional seasonal business model, fuelled by modern shopping habits that tend towards more instant “buy now, wear now” gratification and a more globalised customer base that is harder to fit within the neat box of the traditional fashion calendar. . . .

Brands are also turning to data-analytics services, designed to help improve inventory planning and match the products on shelves and pushed through digital ads to the kind of weather consumers are experiencing in real-time.

Planalytics estimates it can help retailers increase revenue by up to two percent by using data to make smarter choices about what to make, when to stock and where. Targeting ad campaigns based on “weather context” can boost the return on advertising spend by up to four times, according to the data analytics company.

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