Most businesses are aware of the impact that weather can have on sales.
A heavy rainstorm or blizzard can prevent customers from getting out to shop, for example. But a windy, chilly or dull day seems to make people feel less like buying, while a bright, sunny day tends to bring out the shoppers – and opens their wallets.
Tracking and ultimately predicting the effect of weather could allow businesses to maximize sales, as well as ship inventory and schedule staff hours accordingly.
Now an online tool developed and offered for free by Weather Underground will help even small businesses chart these phenomena, applying meteorological data for specific time periods to their sales figures and other factors.
“You can put weather data into your spreadsheets,” says John Celenza, the lead developer for Weather Underground, which is based in San Francisco. “Now you have an information advantage.”
Weather Underground started in 1995 as the first online weather service. Using meteorological data collected worldwide, both recent and historical, the new tool is part of a suite of business services it is offering in areas such as marketing and advertising.
The sales tracker can calculate the correlation between sales figures and weather, ranging from the temperature and precipitation to the wind speed, humidity and dew point. Users input their location and a date range - for example, for the past year. These are plotted into a spreadsheet, which they can download. Then they add their revenues or other figures in-house and look for patterns that can be attributed to the weather.
“There’s tremendous potential for this kind of gadget,” says Dilip Soman, a professor of marketing and strategy in the Rotman School of Management at the University of Toronto. Such tools can level the playing field for smaller businesses to research weather effects, he says.
A complex cause-and-effect relationship links weather and shopping, he says. But by and large weather affects mood, making people more positive, trusting and outgoing, behaviours that translate well in the marketplace.
“People in a better mood tend to spend more, and they tend to spend in more categories, and they tend to spend more time spending more,” Dr. Soman says. “People are looking for a reason to go shopping at any given point in time.”
Sunlight can make a big difference.
People who were exposed to artificial sunlight, as opposed to a regular electric lamp, were willing to pay significantly more for a range of products from orange juice to gym memberships and airline tickets, according to a study by a team of researchers at the University of Alberta and University of Winnipeg in 2010. The study found that weather can “affect consumers’ internal states, which then influence their spending decisions.”
“Sunlight has a significant positive effect on willingness to pay,” the study said, adding that temperature, humidity and snowfall can also affect retail sales.
Mr. Celenza says Weather Underground’s tracker tool has been used to help a charcoal company determine the optimum grilling weather, and thus charcoal demand, in a number of locations. It has also showed a car battery retailer the correlation between sales and extremely cold and hot temperatures, when batteries are likely to give out.
Mr. Celenza is hoping businesses use the tool to crunch the numbers on their overall sales as well as smaller segments of their product lines. “They might find some surprises.”
In the future he expects the tool will go beyond testing hypotheses to generating predictive models, based on forecasts, and evaluating factors such as energy costs, “whatever might be affected by weather.”
Weather Underground already promotes the use of weather intelligence in advertising, encouraging advertisers to vary the content of and tailor their messages based on the weather where they are being viewed. “You’re totally more susceptible to the ad if it’s got the right context,” Mr. Celenza says.
Negative moods caused by weather can make consumers respond better to negative messaging, Dr. Soman says. On a dark, gloomy day, for example, a dental floss company might tell people to floss or they might get gingivitis, rather than telling them that flossing will give them a brighter smile. This translates into other areas such as the stock market, he notes, where investors are more prone to hang onto losing stock, or be “inaction prone,” when the weather is poor.
People are influenced by the weather in principle, which is why it’s currently the most demanded data service on smartphones, Mr. Celenza adds. “It affects you every day.”