February 2019 was one of the hottest and driest on UK record, and the impact on businesses has been amazing. According to retail giant John Lewis, they saw a 13% increase in sales of swimwear, sunglasses and shorts. In addition, grocery store Sainsbury’s found there was a significant increase in the sales of rose wine.
Does the weather impact the buying behaviours of customers?
1. Cold weather seems to freeze sales
When it gets really cold, people tend to stay indoors which can really make a difference in footfall in retail locations, lowering sales in brick and mortar shops. This was seen in 2018, when the Beast from the East caused consumer anxiety, hindering sales on the high street.
Cold weather isn’t the only problem. When it is raining, shoppers are less likely to travel to the high street, putting a dampener on retail sales. This is especially true if there is a rainy June or July as consumers are less inclined to invest in new summer wardrobes, instead preferring to stick with their winter and spring clothes which they can carry through to the next winter.
2. Hot weather improves sales
When it comes to increasing sales, there is nothing better than a hot period. February is a classic example of warm weather positively impacting consumer spending. Another example was during the 2018 World Cup when the weather was hot and consumers spent a lot of money on products to enjoy the outdoors, including barbecues and paddling pools.
There is a psychological aspect to this. Warm weather tends to improve consumer moods, and when people are happier, they tend to be more open to spending money.
3. Warnings can provoke panic buying
The other impact that the weather can have on consumer spending behaviour is when it relates to panic buying. When people are told in advance that there is going to be bad weather or very good weather, they tend to bulk buy items they need in order to prevent them from missing out. This can include items such as clothing, furniture and food.
When news is unexpected, however, panic buying can result in some shops running out of stock, though often only temporarily. And when products run out, panic buying is often accentuated. This is very much what used to happen with toy sales at Christmas, with must-have toys often being snapped up weeks before the festive period. Nowadays, retailers have become better at ensuring a steady supply of items.
Does weather impact product demand?
It all depends on what your product is.
Some products are completely unaffected by the weather. Take the example of toothbrushes. People need them every day, no matter what the weather is doing outside. Demand for essential items like this is not impacted by weather at all.
Demand for other products is heavily influenced by the weather. If we experience a particularly wet month, sales of umbrellas, raincoats and wellington boots will undoubtedly shoot up. Holiday companies might even experience an uptick in sales if the weather is so bad that it makes people want better weather abroad.
How can you use seasonal trends to forecast performance?
Again, the degree to which your business will be impacted by seasonal trends will depend upon the products/services you offer.
If your product is toys, wrapping paper or alcohol, you can say with certainty that the Christmas period will boost sales. Year after year, you can factor this into your performance forecasts.
For less obvious trends, you can look back to historical sales data to identify seasonal trends. If you find any patterns, you can then build these into your performance forecasts for the periods to come.
Being alert to these trends, retail executive leaders can determine and take advantage of seasonal changes in the weather to forecast their performance more accurately. To find out more, or to enquire about our retail executive search services, speak to us at Anthony Gregg today.