Photo: Ig0rZh
Should Online Retailers Pray For Rain?
Online sales tend to benefit from rainy and windy conditions, although the impact can be positive or negative depending on the geography, according to a new Adobe study.
Combining Adobe Analytics’ analysis of website transactions with weather data from IBM’s The Weather Company, the study predicts weather will boost U.S. e-commerce sales by $13.5 billion in 2023. The most significant impact comes from rain, $8.7 billion; wind, $4.4 billion; and snow, $250 million.
Each weather event impacts shoppers in different ways:
Rain: The effect of rainfall on e-commerce peaks when consumers experience between 0.8 and one inch of rain. Once rain reaches this level, online spending is boosted by 4.4 percent. The rain payback nearly doubles on weekends and has the most significant seasonal impact in the fall.
Wind: Online sales grow 3.5 percent when the wind hits 15 to 20 miles per hour (mph). E-commerce activity increases only 2.3 percent when the wind whips up in the 20-to-25 mph range. Sales fall 6.7 percent when wind speed tops 25 mph as consumers became distracted.
The effects also greatly depend on whether the area is accustomed to strong winds. For instance, once wind speeds surpass 30 percent, e-commerce sales tumble 90 percent in Atlanta but increase six percent in Chicago.
Snow: Snowfall’s e-commerce impact likewise varies considerably by region. Cities where snowfall is common, such as New York City and Seattle, find a boost with snow’s arrival, but a minor snowfall in cities such as Austin and Charlotte becomes a distracting event that causes e-commerce activity to drop.
A white paper, “5 Myths About The Weather’s Impact On Retail,” from the National Retail Federation (NRF) and Planalytics, found “extreme events, as well as simple day-to-day changes in weather” can drive spikes in website traffic. Planalytics also found that the effect of temperature and precipitation on retail sales differs significantly by region.
Evan Gold, EVP of global partnerships and alliances, Planalytics, told NRF in a recent blog entry, “It’s different not only for every product, but it’s different by time period and location.”
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Weather disruptions will boost US ecommerce by $13.5 billion in 2023 – Adobe
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5 Myths About the Weather & Its Impact on Retail –National Retail Federation/Planalytics
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How weather affects shopping and retail – National Retail Federation
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It’s the Weather: Quantifying the Impact of Weather on Retail Sales –Springer Nature Switzerland
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The Impact of Weather on Retail Sector in the UK –WeatherAds
Discussion Questions
DISCUSSION QUESTIONS: Does it make sense that bad weather, notably rain, boosts online sales? What are your thoughts on retail’s overall capability to gauge and capitalize on local weather conditions in a timely manner?
Poll
Loading …BrainTrust
Dion Kenney
COO, Mondofora
John Lietsch
Chief Operating Officer, Bloo Kanoo
This is interesting but not all that surprising. Bad weather makes some people more reluctant to leave their homes and to drive to places like malls, so it likely tips the balance slightly in favor of online shopping over going to physical stores. And it makes perfect sense for the impact to be greater when the weather is exceptional for a given area as people may not be prepared or used to such conditions and so are more likely to react to them.
That’s an excellent correlation analysis. Retailers may not be able to do anything about the weather, but this is helpful for “normalizing” otherwise trackable performance results — by correcting any other tested variables for weather-related effects.
Of course online retailers can benefit from bad weather, especially if the item is needed immediately. The customer may shop a website just to have something to do during a rainstorm. So I am sure there can be a boost. But online retailers hopefully will not sit and wait for the rain. Remember, competitive success in retail comes from smart tactics and actions, not watching the weather outside.
It makes sense that anything that impedes in-store sales, like weather or a virus, would result in an expected increase in online sales. It also makes sense that it’s not a generalized rule as evidenced by the purported effects of wind in Chicago versus Atlanta. Retailers have become proficient at preparing for predictable, cyclical increases in demand but weather and viruses are far less predictable and in the case of weather, it has a much shorter event runway. I don’t think retailers have the efficiency in demand analytics or in their supply chains to properly and effectively prepare for local weather conditions.
Retailers have used the weather as a footnote for rationalizing performance variances for a long time. But weather is a footnote, not a strategic or tactical play. It’s frustrating when it hurts and a relief when it helps. Weather is a huge factor when planning and managing seasonal flow and conversion, especially when considering the different needs of Boston versus Miami over the course of the year. But that’s a level playing field between physical and online retail.
The stats stated in the article make perfect sense. I think there’s some very basic psychology here. If cave people had next-day delivery, they would have been clicking frantically before a big storm. In the summertime, when it’s sunny and the weather is beautiful, shoppers want to go outside and enjoy it. But when the weather is more rainy or snowy or even windy, shoppers stay inside. Then they tend to gravitate towards shopping online, mostly out of boredom when there is nothing else to do. Retailers need to find a way to use the local weather conditions to predict inventory in a timely manner, to avoid running out of trending products. Retailers don’t have a crystal ball, but the savvy ones will take full advantage of weather data.
Who wants to go out in what they perceive as bad weather if they can avoid it? It is logical that if consumers have an alternative that allows them to buy what they need without braving the weather they will do so, especially if the product can be delivered in a timeframe that meets their need. It is also logical that people that frequently experience a type of weather are less Likely to turn to e-commerce.
When I operated a chain of c-stores in New England I quickly learned that the threat of snow was good for business but that having it snow was not.
Apparently online retailers are now from the same family of brick and mortar farmers … Farmers!
Too sunny. Too cold. Too rainy. Too dry.
Seems there’s always a reason we can/can’t sell something that is out of our control.
Makes sense, although I do recall monday merchandise meetings where poor sales results were blamed on the weather no matter what the weather was. It was sunny out, and people were enjoying the weather, and not going to stores, or it was raining so no one was shopping. There’s a statistic (and an excuse) to fit every scenario imaginable.
This scenario also came to mind for me as I read the article. I always wanted an analytical approach to quantify the extent to which sales could be attributed to fluctuations in weather. The data exists. On many weekends, we’d even have good weather in one geography and bad weather in another to create a sort of holdout group and measure weather-related lift. Has anyone done this? When IBM bought both The Weather Company and Coremetrics, I thought we could expect an offering like this. Then I joined IBM and was distracted by other “urgent” projects and never got this concept off the ground. Still seems like a worthwhile product.
I have always heard this, and to an extent it makes sense , however, I think there is an added element this time around- less discretionary spending. For example, if you look at the financials of HSN/QVC, they are not good and they are making changes to offset the losses.
I’d like to see an added segmentation to this analysis, i.e., online purchasing from phones vs computers/iPads. The discussion focuses on being indoors, but if you’re using your phone it doesn’t really matter, does it? Regardless of the conclusions, retailers can leverage weather conditions with promotions if they are quick about it.
I would like to see the data on the impact of atmospheric rain in CA and AZ. There is so much flooding that people cannot get to stores and deliveries can not be made. I don’t think catastrophic rain has the same result as normal amounts of rain.
Sure it does. Not many people like to drive around and shop in challenging weather conditions so shifting to online makes sense.
Regarding retailers ability to capitalize, I would give that a 4 out of 10, primarily because of the short window to react — watching your weather app is one thing, watching it AND stocking up on something (umbrellas, chicken soup, whatever) to capitalize on it is another matter entirely.
I could have phoned this study in from the couch. When weather is bad of course its easier to shop online or order food for delivery than it is to deal with rain or snow.
Pray for rain? Prayer and hope are not good business strategies. That said, there will always be bad weather. We just can’t predict when! (If the weather experts on the news can’t accurately predict the weather, how can we?!) So, retail should be ready. It will snow in Maine, so certain retailers might want to stock the appropriate items… shovels, salt, etc. In New Orleans, they should be ready to sell umbrellas. (That’s every day! They don’t have to hope for rain, it just happens.)
I’m not sure if this an example of my First Rule of Randomness — a positive correlation can be asserted over any two facts no matter how unrelated they are — or a “DUH” insight. The truth is probably somewhere in-between. Yes, bad weather (a fairly subjective metric if you ask me) will keep some people from venturing out to shop, especially for discretionary items. Run out of diapers on a day it’s raining, odds are you are going to brave the storm. Looking for a new sweater on the same day, odds are you will browse oneline. My though on this topic is, if all that’s keeping you solvent is bad weather, you have much bigger problems, so a weather based strategy doesn’t seem all that helpful.
I’m not sure there’s a lot there, here. Seems like most weather types have both positive and negative impacts. So no, I don’t t think online retailers need to pray for rain.
This makes complete sense. We seem to quickly forget that TV viewership always related to thermal unit use.
I also love the tremendous irony that the real world continues to override the hopes and dreams of an all virtual existence. Nothing is more fundamentally human than being driven inside by rain.
“Cities where snowfall is common, such as New York City and Seattle“(emphasis added) Seattle?? Sorry, but I find it hard to take seriously a study which makes a borderline ridiculous statement such as this.
Anyway, whatever the truth is, I don’t see how any of this really affects online retailers in such a way that they can “capitalize” on it. What would they do: maybe “type in your Beaufort Scale reading for a discount”??
Living in different parts of the US, I know first hand that people that live in inclement climates are used to getting out in all types of weather. Now that I’m living in Southern California, we have rain in the forecast and everyone stays home. I think this is more of a regional opportunity to offer clever sales at times when people are more likely to be shopping online.
This makes sense in that dramatic weather changes in any pocket of country will goose sales, in store or online.
Here’s where AI and platforms can play a role in helping grocers of all size (not just chain stores who can afford hiring a “corporate weather sales coordinator”) prepare for merch displays, product runs, seasonality. It shouldn’t have to be an expensive outlay for grocers take advantage of the 7-8 times a year when weather shifts impact customers and the supply chain.