How does the weather affect retail sales?

Does weather affect retail sales

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Whether it’s an ice-cold drink on a warm day, or de-icer spray for your frozen windscreen, we all know that weather can influence our buying behaviour.

But is it possible to accurately predict sales growth depending on temperature? A new joint study by the British Retail Consortium (BRC) and Met Office seeks to uncover the truth.

What the study tells us

Temperature is a useful predictor – but only at certain times of year

As you might expect, both retail sales and average temperatures follow a predictable pattern. Retail sales gradually build towards throughout the year, resulting in a Christmas peak, while temperatures peak in the summer months.

Clearly, this shows that spending doesn’t simply increase in line with temperature. However, temperature variations during specific parts of the year appear to influence retail sales more greatly than others.

For example, the periods between early August to early September (weeks 33-36), early September through to early October (weeks 37-40) and, to a lesser extent, mid-April through to mid-May (weeks 17-20) show a clear relationship.

During these periods, the variation in sales growth that can be explained by temperature changes is as high as 44%.

Strength of relationship varies across non-food categories

During the Summer/Autumn transition, temperature variation appears to have a particularly pronounced effect on growth within Women’s and Men’s Clothing categories, and Women’s, Men’s and Children’s Footwear categories.

Women’s Clothing is also strongly affected by temperature variations during the Spring/Summer transition – a trend that is much less evident in the Men’s Clothing category.

The Furniture and House Textiles categories, meanwhile, show a greater sensitivity to temperature during the summer months, as cooler weather discourages ‘outdoor living’.

Warmer weather can both help AND hinder sales

Whilst higher temperatures at certain times of year can help drive growth in certain areas, it seems only natural that increases will push down sales at other times.

The Women’s Clothing category provides a great example of this. Assuming all other factors are consistent, it appears that a one degree increase in temperature (compared to the previous year) during weeks 33-36 could reduce sales of Women’s Clothing by 2.7 percentage points.

Conversely, a one degree increase in temperature during the weeks 17-20 would lift sales in this category by 1.7 percentage points.

How should retailers react to this study?

While all retailers remain at the mercy of Mother Nature when it comes to weather-related buying behaviour, it does highlight the need to plan ahead.

As the report’s conclusion states “retailers need to be prepared to react”.

In reality this may prove difficult. But by building flexibility into your operations where you can, you will be able to respond to short-term, unexpected changes to protect your margin.

Is your Customer Service solution flexible?

An unexpected fall in sales due to unfavourable weather will certainly be made worse by a contact centre full of under-utilised agents.

Similarly, being unable to respond to a sudden increase in customer demand could result in lost sales, unhappy customers – and a potentially-costly missed opportunity.

Introducing an outsourced element to your Customer Service strategy can give you the flexibility to overcome this. By being able to scale resource quickly to meet demand in this area, you will be able to focus your energy on other parts of your operation and minimise the impact of unexpected weather.

To find out how an outsourced solution could help you reduce your business’ exposure to the elements, please contact our Sales Team.

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