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Shippy's avatar

Does weather affect business and trading?

Asked by Shippy (9857 points ) August 6th, 2012

Do shops do badly on rainy and cold days? (Excluding umbrella sales of course!)
How about services, would you be less likely to go to a day spa on a dreary day? Would you cancel the movies?

How about days of the week? Are Fridays a good day to book appointments for the following week? Or are Mondays better?

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9 Answers

Pied_Pfeffer's avatar

For the travel industry, rain is rarely an issue, but severe weather conditions that prevent people from traveling is a living nightmare.

When I’m in England, where it rains there more often than not, there isn’t much choice. You either learn to live with it and go out in the rain (we don’t own a car), or stay inside for days at a time. Even if we leave home when it’s not raining, there is always a good chance that it will come down in buckets at some point before getting home. Everyone just learns to dress for it. And no, it doesn’t seem to hurt any of the businesses.

As for the last question, I’m not sure how days of the week for booking appointments relates to weather. Could you clarify what you mean by that one?

marinelife's avatar

Yes, weather affects business. Not just in the ways that you mentioned, all of which are true, but shipping of goods is affected, grwoing food is affected, etc.

JLeslie's avatar

Depends on the market. In South Florida cold days in the winter are a boom for sales. Some days our Boca Raton Bloomingdale’s sold more sweaters than the New York Store. Rain usually is a slow day for retail in general across the US. Bad storms on the horizon slow clothing type sales but increases sales for hardware stores and grocery stores and gas stations for that matter. During the actual storm stores have very little business or are closed if it is deemed unsafe for employees.

geeky_mama's avatar

Absolutely there are weather-related trends in retail. But, weather is just one data point that retailers take into their calculations.

Most major retailers actually have forecasting software (as in demand-forecast, not a weather forecast per se) that takes multiple factors such as year-on-year sales history, trends and other data points—including weather—to determine how much stock on hand they’ll need per each store location.

The classic example that is the case in point for algorithms behind this sort of demand forecasting software is this scenario:

Say you’re a big-box or grocery retailer and trying to determine how much bottled water to keep on the store shelves. Let’s say you’re basing your merchandise orders based on sales from last year at this time.
Well, if you only order what you sold last year, how do you know if you’ve missed selling more? Or, what if last year you sold more than you will this year because of a major weather event? For example: if you’re basing your orders only on sales history and you see a giant spike in water sales last Aug 20, 2011 (in advance of Hurricane Irene making landfall on the eastern seaboard of the US) you might over purchase water in August 2012.

What you need instead is a weather/NOAA feed with predictions for the upcoming Hurricane season, a smoothing of the sales from last year excluding the hurricane and yet representing what you could have sold if you had unconstrained inventory in the event that there is another predicted Hurricane this August.

In addition to demand forecasting there are trends (and as @JLeslie points out it depends very much on the type of retailer & the location/market segment in the US) across the entire economy – and lots of articles and science (and even companies focused on serving retailers!) on this topic.

A few more things I know retailers look at:

- Grocery retailers pay attention to dates when Food Stamps/electronic benefit transfer (EBT) card are reloaded each month. As you can imagine, higher traffic days in the grocery are connected to when people have newly added funds available. This date (or dates) varies State by State – -so think about how complex it is to be a retailer in multiple states! For example, in MN it might be on the 30th of the month, but in ME each month food stamp benefits are deposited onto an between the 10th and 14th and your deposit date depends on the recipient’s birth date.

- Many states pass temporary “Tax Vacation” sales dates. A common time of year for this is Back to School and this year 17 States have jumped on the bandwagon. (Article here)
So, retailers have to prepare MONTHS in advance for this an make sure they’ll have sufficient inventory on-hand for greater sales volumes of certain items during those dates.

- Holidays. Not just “Black Friday” or Christmas..but Fourth of July and Memorial Day, too. Retailers know you’re looking to buy a new TV before the Super Bowl in early January (and they also know who is likely to try and return it right after, too!)—they keep all kinds of metrics on what we buy and when.

Shippy's avatar

@geeky_mama GA! I was wondering today, as currently I have added massage to my list of jobs I do at home, and the phone was dead. It was rainy and miserable and cold. So perhaps nobody felt like getting “nekkid” in this weather!! (Clarify partially naked!!).

JLeslie's avatar

Oh, since Black Friday was mentioned…a bad storm on a key shopping day like Black Friday, or during the last week before Christmas, is a nightmare for retailers. A very large percentage of business for retailers who have gift type products is done during the last 6 weeks of the year. If they miss the business on those days, they miss making their sales plans for the year. This is true with all big store events. A big snow storm on Presidents Day weekend, or tornado warnings during a local store event, can be a very big problem if the store is going up against the event from last year. Each event has a sales goal, like each day of business, the month, the quarter, the year.

geeky_mama's avatar

@Shippy – at least for me massage is not impacted by the weather at all.

I tend to seek out massage when I’m fresh off being folded into/out of an airplane seat. I’m also likely to treat myself to a massage when I’m staying at a hotel for work and am extra stressed or feeling a bit unwell and think a good massage might help. So, if you can put out adverts with hotels and/or train stations or airports that might help boost your new customer traffic…

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Shippy's avatar

@geeky_mama Great idea thank you.

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